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Outsourcing Bookkeeping Guide for Small Business

Are you thinking about outsourcing your finance and bookkeeping functions?

For a growing small business, you probably should get some bookkeeping help if you don’t have bookkeeping knowledge and experience. Outsourcing bookkeeping has the benefit of improving your business performance and growing a better business.
Imagine this: You had a successful product launch. Your cash flow is looking good and it’s exciting to make big investments on your inventory. But are you doing the correct financial forecasting that will make long term profit and sustain your business health?
If you have no idea, that’s okay. You can always outsource help from finance and bookkeeping services. But how do you decide to outsource bookkeeping?

Making the decision to outsource bookkeeping 

When you started your business, you probably didn’t want to sit all day and drown yourself in all the bookkeeping paperwork.
You might think that your small business is too small to need any bookkeeping. Don’t make that mistake. When tax season arrives, you could find your business in deep financial trouble if you’re not ready with your major financial reports.
And there is this important aspect of your business — to understand what your financial statements tell you about your business. If you’re now asking when do you actually outsource bookkeeping services? There is no ‘one answer fits all’. It’s different for every business.
But here are some considerations for you:
  • You don’t understand the basic principles and concepts of bookkeeping and doing everything wrong in your books.
  • You are losing time to focus on profit generating activities.
  • You are bootstrapping your business and you don’t need a full-time financial advisor.
  • You don’t understand your financial report and you need someone to explain to you if you are making real and actual profit.
  • You want some peace of mind that your books are taken care of by qualified professionals to prepare reports for the tax season.


Laura Sparks Quote

Laura Spark

"Most entrepreneurs have great talents but many times they think they can do it all"


Eric Krell, author of the Management Bookkeeping Guideline: Outsourcing Finance and Bookkeeping Functions suggests four strategic steps to making the decision.

1. Identifying Strategic Drivers. Identify why your business needs outsourcing. Understand and record your reasons that will help you complement your overall business strategy.
2. Evaluating All Options. Consider all possible options you have by identifying all benefits and limitations to the services, how outsourcing can improve your business processes and performance, and how much investment you will need to risk.
3. Understanding Capabilities Required. Determine your qualifications for the outsourcing service such as the skills to execute your business processes, technology to be used, and all other expertise you may need to manage and monitor your business bookkeeping and finances. What are the strengths and weaknesses? How to resolve deficiencies, if there are any?
4. Defining the Scope of Outsource Services. It is an essential step to define what processes you need to outsource to finalize your decision and determine which outsourcing service provider you may need to be a partner in your business growth.

FAS - Fontanilla Accounting Solutions

Selecting the qualified professionals

The selection process for a reliable bookkeeping service provider is an important part of your business growth and long-term success. But first, identify what are the tasks that you need to outsource? Your answer to this question will help you determine the qualifications of the service provider you need to outsource.
There are three general categories of tasks that are best outsourced, according to the Director of Growth Management at CBIZ MHM, Gregg Landers.
1. Financial analysis. To perform your financial analysis, you stand on better grounds to outsource a highly skilled CFO who can help you prepare a reliable financial analysis and report. Your CFO can also make sure that your bookkeeper is doing the job correctly. Yes, you may pay more, but you can be assured that with a CFO-level of help coming to your business once or twice a month is a real game changer that can kick your business alive as your part-time CFO drives incredible growth in profit.
2. Recurring tasks. If the task is repetitive, it’s tedious. And if you are growing a business, you cannot get stuck in a routine that does not generate higher profit margins. All your accounts payable task, data entry or shipping inventory are all repetitive tasks and this is something that needs someone with an eye for details and a genuine fascination for organized routines.
3. Specialized skill. Of course, we understand that you wear many hats and you are highly capable of multitasking. But admit it, some skills are just not yours. Unless you studied bookkeeping, it is hard to fully understand bookkeeping principles, standards, and best practices.

Top 7 bookkeeping tasks you should outsource

Transactional processes
Regulatory bookkeeping 
Financial reporting
Tax bookkeeping 
Management bookkeeping 
Budgeting and forecasting
Financial analysis


QuickBooks Training Texas


How to manage the outsourced team

It’s important that you prepare an outline of your expectations including a clear objective that will guide your outsourced service providers right at the beginning. 
Still get ready for the learning curve.
While it’s ideal that your outsourced bookkeeping staff could read your mind. They can’t. You will have to give clear instructions of what you want and what you are expecting. It could take a little time to adjust to your processes and systems and achieving how you’d like things done.
The other important thing to keep in mind is don’t micromanage.
The point of outsourcing functions to service providers such as financial advisors and bookkeepers is for you to free up a chunk of time that will allow you to do the other important work such as tasks that generate profit. Leave the professionals to do what they do best.
"Knowing your business is critical, but keeping yourself indispensable is reckless and un-scalable. Realize that removing yourself from low-level operations is the smartest investment you can make in the long-term success of your business." ~David Walsh
It is understandable that it can be difficult for you to leave some things about your business to others and you are used to getting things done on your own. But at some point, you will have to learn to let some things go and allow your business to grow.

The challenges you must know

There are real challenges in outsourcing your bookkeeping functions, which may include bookkeeping and finance that require specific skill sets. But there are real gains, too.
What’s more important is that you are prepared for the challenges and what better way to prepare than to be armed with knowledge on the risks you are about to take and develop contingency plans before the threat strikes.
  1. Control. You can lose control. That’s imminent. When you pass on your financial data to someone else, you are banking on trust. The trouble with trust investments is that you cannot control it and that can be scary. What you can do is place some protocols and standard operating procedures to signal incoming threats.
  2. Temporary disruption. Your operations may suffer short-term disruption during the task displacement process considering adjustments and orientation process. You should be prepared for that disruption phase and determine better ways to minimize if not completely avoid any level of temporary disruption to your operations.
  3. Proprietary risks. When you decide to outsource your business bookkeeping functions, you are sharing your financial data. There is a risk to confidentiality and intellectual property for which you should prepare. Many small businesses have no ready construct for security measures that will limit the risks.
  4. Over-reliance. Don’t leave everything to your bookkeeping service provider. Knowledge and skills are powerful tools to drive your business success and if you allow these aspects to erode as you leave everything to outsourcing, you will soon find your business sinking the moment that your outsourced bookkeeping service no longer becomes available to you.
There are other challenges that you can quickly defeat with proper preparation such as communications. The foundation of your outsourcing success is built on how well you relate much of what you want to happen in your business so that there is a clear task objective and sets of expectations that the outsourced professionals can see through completion.
The struggle is real in finding a reliable service provider, especially a qualified professional financial advisors you can trust with your business on a tight budget. But, however you want to keep a rein on your expenses, cutting cost on your outsourced financial advisor may not be a good idea.
You know what they say, “you get what you pay for.”
Always pay a little extra for quality and that can go a long way for your business success. But there is always a way to win in this situation. Opt for value and not hours. Get the outcome you need and choose the task-based agreements that offers a fixed cost.

Building a better business

More and more small business owners are realizing the potential for greater success and improved business performance driving sustainable growth with contracting service providers to help in many areas of business processes; but mostly, bookkeeping and finance where they find to be a weak spot that can be strengthened.
By getting help from outsourced professionals to manage your financial operations smoothly without giving you the painful headache, you can focus more on value creation and innovation.

FAS - Fontanilla Accounting Solutions


Quick 8-step action checklist to start outsourcing

Outsourcing is also about developing a partnership. And in any relationship such as business affiliation, it’s always a smart start to kick-off with your goals and objectives in check. Have a clear set of goals and objectives right at the beginning of your partnership.

You may think you need a CPA to help with your bookkeeping. But when you break down the tasks you need to accomplish, you may just be needing a qualified bookkeeper that could save you a good chunk of cash. Or, it could be the other way around; and you’re wasting money on a bookkeeper who cannot deliver the job. Your task list becomes your guide to determine what kind of help you really need and allocate the appropriate budget for the right professional to help you with the task.

When you have accomplished step three above, it gets easier to identify the relevant skill sets you will need from the bookkeeping professional you will outsource. Bookkeeping professionals have their set of strengths and weaknesses and they are not all the same in terms of knowledge, experience and expertise. If you know what you are looking for, you can spot the right fish in the pool.

It’s important that you are cautious in preventing fraud right at the outset. It’s not rocket science to be too careful. You just have to validate the claims that your shortlisted bookkeeping service provider tells you. Your job is to check their references.

Don’t settle for anything less than what your business needs just because the service pays cheap and you are pulling on a tight string to save some cash. Qualified professionals for the job will cost you. The important consideration is what are your gains? It’s an investment yes, and a good one, for a long term goal with calculated profit.

It’s always a challenge to communicate. You do it right and you get your expected results. You do it wrong, you better learn to be more precise. List them down — all of your expectations and don’t miss an item with the assumption that your outsourced service provider holds some kind of telepathic powers to know exactly what you want. The rule of thumb for outsourcing is to never make premature assumptions

Always hit a goal. It doesn’t matter how many hours or how much trouble it takes to get a task done, focus on results and pay for it.

Financial Tools eBook

In this time and age, to remain competitive and keep playing the game, you have to embrace the waves of technological change. There has been a blowout of bookkeeping technology — tools that make your small business processes keep up with the fast paced modern market competition. Don’t miss out on that.

Final thoughts on outsourcing

The bottomline for moving into outsourcing your bookkeeping and bookkeeping functions is trust. If you cannot trust the service provider, you will be on the losing end. FAS removes all that risks for you.
Your business needs a skilled financial advisor and a qualified professional bookkeeper you can trust to help you grow your business. Our stringent recruitment procedure reassures you that you will be working with a highly qualified professional with an bookkeeping background and trained in QuickBooks bookkeeping software. 

Request a quote.

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We help you plan, forecast and analyze your financial data
so you can get on top of your finances today to grow your
small business big tomorrow.

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Address | 810 S. Mason Road, Ste 160, Katy, TX 77450
Office | 832-437-0385
Email | admin@fas-accountingsolutions.com

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