10 Outsourced Bookkeeping Fixes Every Small Business Needs

Small business owners are often burdened with various challenges when managing their finances. One of the biggest headaches is bookkeeping as any errors made can lead to inaccurate financial reports, tax penalties, and cash flow issues. However, through outsourced bookkeeping, small businesses can maintain their focus on growing the business while the experts manage their financial records with accuracy and efficiency.

Common Bookkeeping Challenges and How to Overcome Them

Below are some common bookkeeping challenges small business owners face and how outsourced bookkeeping can solve them.

1. Time Management

Challenge: Small business owners have to manage several responsibilities and often neglect bookkeeping, resulting in incomplete or inaccurate records.

Solution: Outsourced bookkeeping allows small business owners to save time by taking over daily financial tasks like data entry, bank reconciliation, and invoicing, allowing business owners to focus on growth.

2. Lack of Expertise

Challenge: Small businesses often misclassify expenses, miss deductions, or make reporting errors due to a lack of specialised financial knowledge.

Solution: Leveraging the services of outsourced bookkeepers gives access to experienced financial experts with expert knowledge in delivering accurate records and compliance with accounting standards.

3. Compliance with Tax Laws

Challenge: Small business owners find it difficult to stay on top of continually changing tax laws and deadlines, increasing the likelihood of incurring penalties.

Solution: Professional bookkeeping services possess expert knowledge of tax laws and continually strive to stay updated on any change in tax regulations, ensuring compliance and timely tax filings.

4. Cash Flow Management

Challenge: Inadequate bookkeeping practices are often the cause of inaccurate cash flow reporting, making it difficult to predict financial shortages and allocate resources effectively.

Solution: Outsourced bookkeeping services employ professionals with a high degree of knowledge in creating precise cash flow reports that enable businesses to manage their finances better and avoid pitfalls.

5. Technology and Software Integration

Challenge: Due to a lack of specialised knowledge, small businesses are often unsure about which accounting software to use or purchase, and how to integrate said software across different systems, leading to errors and inefficiencies.

Solution: Outsourced bookkeepers have access to advanced accounting software, and are proficient in ensuring proper setup and seamless integration, resulting in fewer errors and improved financial management.

6. Cost of Hiring In-House Staff

Challenge: The cost associated with hiring and training in-house bookkeepers is an expensive endeavour and not always feasible for small businesses.

Solution: Outsourcing bookkeeping is a cost-effective option, where businesses only pay for the services they require, bypassing the overhead costs associated with full-time staff.

Also read: How a Bookkeeper or Accountant Can Propel Your Small Business Forward!

7. Financial Reporting

Challenge: For small businesses, leveraging incomplete or inaccurate records for creating essential reports leads to difficulties in accurate decision-making, tax filing, and securing loans.

Solution: Outsourced bookkeeping services are masters at formulating timely, accurate financial reports that facilitate strategic decision-making and tax preparation.

8. Scalability Issues

Challenge: As businesses grow, their financial requirements become even more complicated, and in-house bookkeeping teams might struggle to keep up with the volume of tasks at hand.

Solution: Outsourced bookkeeping services are scalable on demand, ensuring that services and resources offered can be increased or decreased promptly without the business needing to hire additional staff.

9. Manual Errors

Challenge: Tackling bookkeeping processes manually opens the door for errors seeping in, such as inputting the wrong amounts or duplicating transactions.

Solution: Outsourcing partners leverage automation tools that operate on a very low degree of error, ensuring accurate financial data and significantly fewer discrepancies.

10. Data Security Concerns

Challenge: Small businesses typically don’t have the budget to integrate robust cybersecurity measures to protect their financial data, leaving them vulnerable to data breaches and fraud.

Solution: Outsourced bookkeepers invest significantly in cutting-edge security measures designed to protect sensitive financial information, delivering enhanced and improved security in comparison to small businesses.

Conclusion

Outsourced bookkeeping offers small businesses access to seamless solutions to common bookkeeping challenges. They provide cost-effective, secure, and scalable services designed to ensure that businesses stay compliant, maintain accurate financial records, and redirect their focus toward taking their business to new heights.

If you are a small business owner seeking to improve your bookkeeping processes at a fraction of the cost of hiring an in-house team, consider partnering with befree. befree is an outsourced bookkeeping and accounting services provider with two decades of experience in delivering bookkeeping excellence. To know more about our services and how they can enhance your existing workflows, email us at info@befreeltd.com or book a free demo today!