When most people think about starting a new business, one of the first things that come to mind is how they're going to manage their finances. The reality is that many start-ups don't have any experience in this area and will need to find someone who can help them out. In this blog post, we'll discuss why should you outsource your bookkeeping. How much can you expect it to cost? And 3 benefits of outsourcing your bookkeeping needs for start-up founders.
There are probably more valuable things you can be doing in the start-up phase of your business than learning the difference between a debit and a credit. Generally, a founder juggling the responsibility of sales, product, cashflow, human resources, compliance and more – many of these things can drain the enthusiasm they had for their business. By out-sourcing key roles to professionals, you will have more time for growing your business and generating new ideas that can help it grow even further. If you want to scale your business, you will want to draw on the skills and experience of an experienced bookkeeper or accountant who has been on this journey with a business before.
Financial record keeping and reporting are critical in creating a solid foundation for your company’s future success. Your financial reports (and forecasts) will form an integral part of conversations with any shareholders. For many start-ups and early-stage companies, the “accounting and finance department” may initially consist of the founder – with the assistance of a good bookkeeper like iKeep and a tool like Xero. This is a great place to start, but it may not be enough for your growing company. When you’re in the early stages and still working with limited resources, you need all hands-on deck to keep things running smoothly and efficiently. That means focusing more time on building relationships within your community and securing new customers rather than spending hours behind the desk.
The costs a start-up incurs for bookkeeping will depend upon many variables. Company size and lifecycle, number of monthly transactions, number of employees and how payroll is processed, number of expense accounts, credit cards, invoices to send out, bills to pay, number of balances to reconcile, etc. In addition to these basic bookkeeping activities, your costs will be impacted by how your accounting systems, policies, and procedures, and reporting needs are set up and administered. The typical cost of outsourcing your accounting and bookkeeping can range from $400 to $5,000 per month for small businesses.
One of the biggest benefits of outsourcing your bookkeeping needs is that you'll be able to get it done at a lower cost than hiring someone internally. Instead of having to hire someone, who will likely work part-time and require health insurance, training, etc., you can outsource. One of the biggest perks of getting an outsourced bookkeeper to perform bookkeeping tasks is that you don’t need to worry about surprise costs. benefits and the equipment that a regular employee is entitled to. All you must do is hire a virtual bookkeeper.
Free up more of your time for important tasks - One of the allures of owning a business is that you get to choose your schedule. But when it comes time to do bookkeeping, it's easy for this task to take up valuable hours in your day. By outsourcing these tasks, you'll be freeing up more time for other important activities, allowing you to focus on growing your company.
Monitor your KPIs and stay on top of your Cashflow - Whatever your type of business, it’s essential to know your company’s financial standing. You need three major reports to determine this: cash flow statement, income statement, and cash disbursement schedule. With the help of a professional bookkeeper, monitoring your business’s KPIs becomes so much easier. Also, a good bookkeeper will check, update, and follow up on payments. They can also track receipts, note accounts payables and receivables, balance your accounts, and give you an accurate picture of your cash flow.
For many start-ups and early-part companies, the “accounting department” may initially consist of the founder – perhaps with assistance from a good bookkeeper like iKeep and a tool like Xero. A good, outsourced bookkeeper is an excellent choice for start-ups and early-part companies. They can help you keep track of accounts payables and receivables, balance your accounts, and give you a clear picture on cash flow. With the help of a professional bookkeeper monitoring your business’s key performance indicators (KPIs) becomes much easier.
All the best with your next venture!
Level 40, 2 Park Street
Sydney NSW 2000
Level 14, 440 Collins Street
Melbourne VIC 3000
Phone. 1300 990 333