As your business grows, you may find you need a full-time bookkeeper. But before you prepare to hire someone to take on the job, consider outsourcing this business function.
The biggest benefit to outsourcing bookkeeping is that you will have a qualified individual who will likely cost less than a traditional full-time employee. Although you may be paying the outsourced bookkeeper more per hour, typically you'll find that, due to the person's efficiency and experience, they require less time to accomplish the same work.
Outsourcing this business function also eliminates the added costs of benefits, including medical, dental, and a 401(k) plan, which are significant expenses for most employers.
But there is also a downside to outsourcing. Most companies considering this option are small businesses with less than $1 million in revenue. In a business that size, most employees are required to wear several hats at some time or another. The outsourced bookkeeper will not always be there to help chip in answering the phone, running an errand, or dealing with other “all-hands-on-deck” situations.
Another drawback is that an outsourced bookkeeper may not have a good feel of the pulse of the business. Also, not having immediate access to bookkeeping matters can be frustrating for you, and for your staff and vendors.
In addition, an outsourced bookkeeper may be unwilling or unable to grow with your business. This could be because the person is not open to learning new skills or because they have time constraints. Most will have other clients and may not be able to give you more time as your company grows and needs more attention.
If you feel that outsourcing is right for your business, here are a few tips for finding the right person:
- Ask your CPA for a referral. A good bookkeeper is going to be known by local CPAs. CPAs generally do not offer bookkeeping services, and generally will establish relationships with bookkeepers to service their clients.
- If you find a bookkeeper through another avenue, ask your CPA to interview them. It's the rare business owner who knows all a bookkeeper should know and is able to really tell if the candidate is someone competent.
- If you use QuickBooks at your company, look for a certified QuickBooks Pro adviser. These individuals have learned QuickBooks inside and out and are required to pass a fairly rigorous test to become certified.
Once you have found that perfect person, make sure you both have the same expectations. Make a list of what you expect from the bookkeeper and how often. For example:
- Accounts payable should be completed weekly.
- Accounts receivable and collections should also be done each week.
- Payroll should be completed on a bi-weekly basis.
- A reporting of all financials should be provided on a set day each month.
Also, you should discuss how often you will be billed. If you are working with a company that has more than one bookkeeper, make it clear that you would like to work with the same person every month. This will ensure that the person is familiar with your business practices and decrease the likelihood of mistakes.
To protect your company, never allow an outsourced employee to be a check signer. Taking it a step further, any employee who can cut checks should not have signing authority.
A competent outsourced bookkeeper can be a stepping stone, providing good experience and important skills that will help take your company to the next level. Also, many companies have such a positive working relationship with their outsourced bookkeeper that the person eventually becomes a full-time employee.
— Laurie Swicegood is the chief financial officer for the Case Design/Remodeling franchise in Williamsburg, Va., and its sister company, Colonial Classic Painting. She has more than 14 years of accounting and bookkeeping experience.