Running a closely held business is challenging. Typically, owners prioritize core business operations such as managing employees, serving customers, and bringing in new sales over tedious bookkeeping tasks. In addition, the accounting rules can be overwhelming.

However, access to timely, accurate financial data is critical to your business’ success. Could outsourcing bookkeeping tasks to a third-party provider be a smart business decision? Here are five reasons why the answer might be a resounding, “Yes!”

1. Lower Costs & Scalability 

Your organization could hire a full-time bookkeeper, but the expenses of hiring an employee go beyond  salary. You also need to factor in benefits, payroll taxes, office space, and equipment. It’s one more employee for you to manage, and accounting talent may be hard to find these days, especially for smaller organizations. Plus, your access to financial data may be interrupted if your in-house bookkeeper takes sick or vacation time or leaves your organization.

With outsourcing, you pay for only the services you need. Outsourcing firms typically offer scalable packages for these services based on the complexity of your organization at any given time. Outsourcing also involves a team of bookkeeping professionals, so you have continuous access to bookkeeping services without worrying about staff absences or departures.

2. Enhanced Accuracy

Do-it-yourself bookkeeping can be perilous. Mistakes in recording transactions can have serious consequences, including tax assessments, cash flow problems, and loan defaults.

Professional advisors are trained to pay close attention to detail and follow best practices, reducing the risk of errors. Outsourcing firms work with many organizations and are aware of common pitfalls — and how to steer clear of them. They’re also familiar with the latest fraud schemes and can help your organization detect anomalies and implement accounting procedures to reduce fraud risks.

3. Expanded Access To Expertise

The accounting rules and tax regulations continually change. It may be difficult for you or an in-house bookkeeper to stay updated.

With outsourcing, you have experienced professionals who specialize in bookkeeping, accounting, and tax. This helps ensure you comply with the latest rules, accurately report financial results, and reduce taxes. In addition, as you encounter special circumstances, such as a sales tax audit or a merger, you can quickly call on other professionals at the same firm who can help manage the situation.

4. Improved Timeliness

Timely financial data helps you identify problems before they spiral out of control — and opportunities you need to act on before your competitors do. Outsourcing professionals typically use cloud-based platforms and set up automated processes for routine tasks, like invoicing and expense management. This improves efficiency and gives you access to real-time financial data to make better-informed decisions.

5. Reliable Security Protocols

Cyberattacks are a serious threat to any organization. Stolen data can lead to monetary losses, operational downtime, and reputational damage.

Many business owners are understandably cautious about sharing financial data with third parties. Reputable outsourced bookkeeping providers use advanced security measures, encryption, and secure software to protect your financial data and client records from hackers. However, not all providers have the same level of security. So, it’s essential to carefully vet outsourcing firms to help ensure that your organization’s data is adequately protected.

Work Smarter, Not Harder

At any given moment, business owners are being pulled in multiple directions by customers, employees, lenders, investors, and other stakeholders. Outsourcing your bookkeeping helps alleviate some of that stress by making sure your financial records are up-to-date, accurate, and secure. At KPM, we have a team of professionals dedicated to helping our clients with outsourced accounting. Contact us for assistance with your organization’s bookkeeping.