Like any other contracted business functions, outsourced bookkeeping services have their own intricacies but if navigated properly can give you the best experience in managing your books and taxes.
If you find your accounting team struggling in keeping your books organized and updated in real-time, then it’s high time that you consider outsourced bookkeeping services.
The cost-effectiveness it brings to the table only comes at the forefront. Big names in the industry who have acquired this service can say in hindsight that it became a crucial step in their success today.
Still not convinced? Let’s break down the process into sizable points.
The article covers:
a. What is Outsourced Bookkeeping?
b. How does Outsourced Bookkeeping work?
c. What Services are included in Outsourced Bookkeeping?
d. Signs Your Business Needs Outsourced Bookkeeping
e. Common Misconceptions About Outsourced Bookkeeping
f. Step-by-Step Guide to Choosing the Right Bookkeeping Partner
g. Accountant vs. Bookkeeper: What’s the Difference?
If your in-house team cannot attend to your business’ financial matters, this is where bookkeeping outsourcing comes in. All responsibilities pertaining to your books are taken over by your contracted staff and handle them for the agreed-upon period.
In this partnership, you get full-course accounting services, without having to hire them directly into the company. This means you avoid the associated costs in recruitment and tenure, such as health insurance, benefits, training and working equipment.
Outsourcing this function can free your hands and help you focus on the more important business matters.
Below are some of the ways an outsourced bookkeeping service typically operates:
Like any other service provider, the process begins with a thorough consultation where the provider assesses your current bookkeeping situation, including your industry, company size, services required, existing processes, and software used.
This allows the provider to create a tailored approach that aligns with your organization’s needs.
Once both parties approve the assessment, a dedicated team from the service provider facilitates a kickoff meeting to discuss the next steps, set expectations, and outline the onboarding process.
This step ensures that both sides are aligned on responsibilities, deliverables, and communication protocols.
Next, the outsourcing provider selects professionals with the right expertise to meet your specific bookkeeping requirements.
In our case at D&V Philippines, the standard timeframe for sourcing a qualified candidate is approximately 30 days.
However, for niche roles, the recruitment process may take 45 to 90 days, while highly specialized positions can require up to 120 days to ensure the best fit for your organization.
Once the right candidate is hired and onboarded, the outsourcing engagement officially begins with training and integration into the client's operations.
The goal is to ensure a seamless flow of information and allow the candidate to familiarize themselves with how your processes work. This phase is crucial in maintaining accuracy, compliance, and efficiency in your bookkeeping tasks.
After setup, the outsourced team takes over the day-to-day bookkeeping tasks. This includes recording and handling incoming payments, outgoing money and other banking activities.
These tasks are typically done using cloud-based software, allowing real-time access to your financial data.
Lastly, to ensure the outsourcing partnership works effectively, there must be regular updates and communication.
Thankfully, most service providers offer scheduled calls, emails, and reports to keep you informed about your organization's financial health. This ensures transparency and helps address any concerns promptly.
Now that you have a better understanding of how outsourced bookkeeping works, let’s take a closer look at the specific services typically included.
Below are some of the key bookkeeping tasks that an outsourcing provider can handle for your organization:
Bookkeepers are tasked to record all financial transactions into a ledger or accounting software to keep it organized and up to date for the company.
If you make real-time updates on the entries, you can accurately send invoices to clients and suppliers. The management, then, will be able to see all outgoing and incoming funds and monitor the revenue you make and the expenses you incur.
Keep track of what you owe your vendors and your purchases, as well as what your clients owe you, so you don’t lose out money, you’re due to having.
Handling Payroll Reconciliation
Calculate the wages of your employees and appropriate deductions. This also helps in monitoring their taxes which would come in handy for government reporting purposes.
When you outsource bookkeeping functions, you get access to premium accounting software manage your books and records aside from the experts that handle your account.
Below are a few signs that it might be the right time for your organization to make the shift:
If you catch yourself or your team struggling to keep financial records up-to-date and accurate, then it may be time to consider reaching out to a specialized finance and accounting outsourcing company.
Not only will they help your organization in fixing the inconsistent records, but they will also ensure that your books are always accurate, up-to-date, and compliant with financial regulations.
If your organization doesn’t have a dedicated finance team or if it does but they are not experts in managing financial records, then it may be time to consider outsourcing this function.
A specialized finance and accounting outsourcing company will provide you with access to experienced professionals who can handle all aspects of bookkeeping for your organization.
If your business experiences seasonal spikes that overwhelm your current bookkeeping capacity, outsourcing can provide the temporary boost needed to manage these peak times efficiently.
When you find yourself and your team spend too much time managing your books, then it only shows that it may be time to consider outsourcing this task to a specialized provider.
By doing so, you can free up valuable hours each week that can be spent on more important things like sales or marketing.
Lastly, real-time financial insights are essential for informed decision-making of your organization. However, if your internal team is unable to provide timely reports, an outsourced bookkeeping team can ensure that you always have access to up-to-date financial data.
This is especially valuable for CFOs and other decision-makers who need to act quickly in a competitive market.
Even if your organization shows clear signs that it’s time to outsource bookkeeping, you might still have some reservations. Let’s address some common misconceptions that often hold businesses back.
Fact: This is one of the most common misconceptions about outsourcing bookkeeping. While it’s true that you’ll have to pay for the services of an outsourced team, they can often be more cost-effective than hiring an in-house bookkeeper.
In addition to the salary and benefits of an in-house employee, you’ll also need to pay for office space, equipment and training. When you consider all these factors together, outsourcing becomes a much more cost-effective option.
Many small and mid-sized businesses assume that outsourcing is only feasible for large corporations with substantial resources.
Fact: Businesses of all sizes can benefit from outsourcing their accounting functions. Regardless of your organization’s scale, outsourcing grants access to skilled professionals who can enhance efficiency in bookkeeping, accounting, and tax-related tasks.
A common concern is that outsourcing may expose sensitive financial details to security threats.
Fact: Trusted outsourcing providers prioritize data protection by implementing stringent security measures. These include advanced encryption methods, restricted data access, and continuous security audits to safeguard client information.
Some organizations believe that working with an overseas accounting provider may lead to misunderstandings due to language and cultural differences.
Fact: Many accounting outsourcing organizations understand the importance of cultural compatibility to ensure seamless partnership.
They hire experts who are not only knowledgeable in finance and accounting but also have strong English language skills and cultural flexibility. This approach facilitates effective communication and diminishes any potential challenges that could arise between businesses and their outsourced teams.
A common misconception is that outsourcing compromises the quality of financial services.
Fact: Outsourcing can actually improve the quality of financial services. When you outsource your accounting functions to a reputable organization, you get access to a team of experts who are highly skilled in their respective fields.
These professionals have years of experience and are trained to provide accurate, timely and reliable financial information.
Now that we’ve covered the common myths, the next step is choosing the right bookkeeping provider. Here’s a simple guide to help you find the best fit for your business:
Before you start looking for an outsourcing partner, identify the specific bookkeeping services your business requires.
Are you looking for basic transaction recording, financial statement preparation, tax compliance, or full-fledged accounting support? Knowing exactly what you need will help you find a provider with the right expertise in your organization.
Once you’ve identified your needs, it’s time to research and shortlist potential providers. Start by asking for recommendations from other professionals in your industry or network. You can also check out online reviews and ratings of different outsourcing services providers.
Doing so will help you get a sense of the quality of service that each provider offers. You can also look at their websites to see if they have any case studies or testimonials from satisfied clients. Once you have a shortlist of potential providers, reach out to them and ask for references.
One of the most important things to consider when outsourcing is checking their technology and security measures. You want to make sure that your data is safe and secure at all times.
This means that you should look for a provider who has implemented robust security measures, such as encryption and firewalls. You should also ask about their business continuity plan (BCP) in case something goes wrong with their servers or network.
You want to make sure that you can communicate with your provider easily and effectively. This means that you should look for a company who has a dedicated account manager or customer service representative who will be available to answer any questions or concerns you have about their services.
You should also consider how compatible their software is with your business needs. If it’s not, then you may need to make some changes before moving forward with them.
While cost shouldn’t be the sole deciding factor, it’s important to find a provider that offers value for money. You should also compare the pricing and service packages of different providers to see which one offers the best value for your business.
This means that you need to look at what they offer in terms of features, functionality and support.
Lastly, before signing an agreement, it’s important to thoroughly review everything included in the contract. Pay close attention to:
By following these steps, you can confidently choose an outsourced bookkeeping partner that aligns well with your organization's needs.
If you're considering hiring financial professionals, you may wonder how a bookkeeper's role differs from an accountant. While both deal with finances, their responsibilities are not the same.
Let’s take a closer look at what sets them apart:
An accountant, who is more often a Certified Public Accountant (CPA), is responsible for interpreting, analyzing and giving recommendations to the management about their financial standing.
On the other hand, a bookkeeper focuses on the day-to-day task such as gathering, recording and managing raw financial data that will be the basis of the accountant’s valuation.
Here’s a quick glance on the roles and responsibilities of an accountant and a bookkeeper:
|
Accountant |
Bookkeeper |
|
Oversees financial data management and updates |
Handles incoming payments, outgoing money and other banking activities |
|
Interprets and analyzes data |
Maintains company’s records |
|
Generates necessary reports mandated by the company, the IRS and other governing bodies |
Enters raw financial data such as receipts, payments and transactions into accounting software |
|
Ensures all business financial reports are aligned with the latest industry standards |
Ensures bookkeeping is aligned with best practices and government compliant |
|
Provides recommendation and foresees possible steps in maintaining company’s good standing |
Assists accountants in preparation of financial reports and audits |
Among the many providers, consider looking for best outsourced accounting services to make sure you turn over your books to a reliable team.
Getting outsourced bookkeeping services gives you the best accounting experience- all ranging from organized books and records up to getting your company ready for business audits.
If you have a strong back-office for bookkeeping, you can confidently attend to growing your business.
Consider D&V Philippines. We offer a premium suite of bookkeeping and accounting outsourcing solutions with excellent approach and management for your organization.
You may talk directly with our expert today and let us lend you a helping hand to your task. You can also read testimonials from our clients and download our guide Outsourcing: How to Make it Work to learn how outsourcing can work for your organization.
This post was first published on 30 October 2020 and edited 16 April 2025. Edited by: Angelica Garcia