All You Need to Know About Outsourced Accounting Services

Not every business owner has the time and energy to manage every aspect of a business. It’s understandable if you are not able to handle all of the responsibilities of running a business. In such cases, outsourced services have become a more common solution for small businesses. 

This article will introduce you to outsourced accounting services, one of the most popular types of outsourced services, and help you decide whether your business needs to use outsourced accounting services or not. 

What are outsourced accounting services?

Outsourced accounting services are a third party that provides a full accounting department experience for small businesses. 

An outsourced accounting service handles day-to-day transactions, accounts payable, accounts receivable, financial statements, taxes, payroll, financial reports, and many other accounting tasks like a regular accounting department. 

Most outsourced accounting services provide a wide selection of packages; you can decide whether you also need a bookkeeper or an auditor. To remain competitive in the market, outsourced accounting service providers must constantly enhance their abilities and certifications. You can rest assured that your books are handled well by finance professionals. 

However, keep in mind that even if you hire an experienced and qualified accountant, you’ll still need to be involved in authorizing invoices, making payments, evaluating timesheets, etc.

The benefits of outsourced accounting services

Cost-saving

Hiring an outsourced accounting service is often cheaper and more cost-effective than hiring in-house staff to handle the finance function. 

By outsourcing, you can save your money on costs that hiring an employee would generate, such as paid leaves, health insurance, retirement, vacation, bonuses, and sick days. You just pay for what you require. 

Furthermore, accounting and bookkeeping services are charged on an hourly basis. It means that you can increase or decrease the number of hours without interruption.

Time-saving 

As your company expands, you’ll realize yourself focusing more on the business’s core value rather than handling administrative tasks. 

As a result, using outsourced accounting services allows you to concentrate your attention, energy, and resources on developing a business strategy. This will then help you increase the business revenue and enhance the relationship with your customers. 

Reduced hiring processes

The hiring process requires many resources. For example, it takes time to develop a recruitment policy, interview, and expenses for onboarding and training new employees. This process usually costs your business a significant amount of time and money and distracts you from other important tasks. 

Outsourced accounting services can help you eliminate hiring and training costs as the service providers already did it for you. All you need to do is choose the most appropriate package for your business, sign the contract, and pay for the plan. 

Accounting scaling made simple

Outsourced accounting service providers can expand their services dramatically in order to compete with their competitors. 

In particular, if your bookkeeping and accounting activities require more than an accountant to handle, you can easily demand more staff from the service agent. 

Automation technologies

Most outsourced accounting services have adopted accounting automation technologies to save time. It also reduces human errors and helps business owners eliminate hazards. 

Moreover, automation technologies will lower the likelihood of internal fraud. You’ll have multiple pairs of eyes on your transaction processing and reports, which provides increased internal controls. Having a dedicated team with expertise in accounting best practices will be far more likely to spot an anomaly than one person who’s probably overburdened and overloaded with work.

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When should you consider using outsourced account services?

Outsourced accounting services are most effective when:

  • A small company doesn’t need a full-time accountant, but it demands someone with higher accounting knowledge and skills than a regular office staff or secretary.
  • A business that can’t afford to hire a full-time accountant with the necessary skills.
  • Temporary services are required, such as extra assistance with end-of-year reports or when a full-time worker is on maternity leave, sick leave, etc.

The bottom line

Choosing outsourced accounting services is not just about handling your accounting activities. It also helps you drive profits, improve cash flow, and grow your business in the long term. You can always discuss with the service provider to design a package that suits your business needs and budget, brings you the peace of mind, efficiency, and actionable financial intelligence you need to succeed. 

About Shoeboxed

Shoeboxed is a receipt management application that turns your receipts and business documents into a digital format in just one click by taking a picture straight from your smartphone or scanning a pdf. It automatically extracts, categorizes, and human-verifies important data from your receipts so that you can go over and check your records anytime with ease. Shoeboxed ensures you will always have your receipts securely stored and ready for tax purposes.

Access your Shoeboxed account from your web browser or smartphone app. Stay audit-ready with Shoeboxed for FREE now!

3 Practical Tips to Become a Successful Freelance Accountant

Working as a freelancer is a dream come true for many accountants. You get to choose the hours you work, where you work, who you work with, and how you work. The good news is becoming a freelance accountant has never been easier, thanks to the mass online transformation of modern business. 

If you are interested in becoming a successful freelance accountant, read on to find useful and practical information that will help you achieve your career goals.

What is a freelance accountant? 

Just like a corporate accountant, freelance accountants help manage their clients’ money so that they can allocate resources and run their operations more efficiently. 

Listed below are some common examples of a freelance accountant’s tasks and responsibilities:

  • Record financial transactions on digital ledgers 
  • Prepare invoices and send them to their client’s customers on time 
  • Process and distribute payroll for client’s employees
  • Create financial statements and tax reports 
  • Ensure their client’s financial operations are compliant with the law
  • File tax returns and assist business owners with finding ways  to minimize their tax 
  • Create a budget for a business

See also: 4 End of Year Tax Tips for Freelancers.

3 Practical tips to become a successful freelance accountant 

These 3 tips will help steer your freelance accounting career in the right direction. 

Check them out!

1. Assure your customers that you are qualified 

You should obtain at least one accounting-related qualification before starting your freelance business. Not only does it give you the necessary knowledge to perform your work, but it also serves as proof to your potential clients that you can handle the job. The more accounting qualifications you have, the greater the chance that you’ll snag a client at a competitive rate. Here are three common ways that a freelance accountant can show that they are qualified: 

  • Have a Bachelor’s Degree 

While a bachelor’s degree in the field is preferred, any business or accounting-related degree that involves accounting, auditing, tax courses, or credits is also beneficial.  

  • Get Certified or Licensed 

Although it’s not compulsory, many businesses will only work with freelance accountants who are either certified or licensed (some clients want both!). Some professional certifications that can help you stand out are: Certified Management Accountant (CMA), Certified Internal Auditor (CIA), and Certified Information Systems Auditor (CISA).

  • Acquire Experience

Working experience is a great way to prove that you know what you are doing! On your online profiles, make sure to include in detail any of your accounting work experience such as what your tasks were, which company you worked for, how long you worked there, etc. 

As important as your qualifications are, you should also constantly update your knowledge whenever you can with webinars, networking events, and professional courses.

See also: What Are The Differences Between A Bookkeeper And An Accountant?

2. Invest in equipment, software, and online tools 

Once you’ve decided to go freelance, you have to be prepared to spend a considerable amount of money on a laptop, a stable Internet connection, and accounting software and tools. There are many online accounting software on the market today, and you should choose carefully based on your accounting specialty and budget. You might want to consider some popular accounting software such as Quickbooks, Xero, Freshbooks, and Bench

When working as a freelance accountant, you usually won’t actually work in your client’s office space, so it will likely be up to you to provide the infrastructure needed to store paper files. This can be inconvenient, especially if you have a smaller living space. To solve this problem, use Shoeboxed. Shoeboxed is a software that helps you digitize your documents, especially financial receipts, in a snapshot. They will then be securely stored in the cloud, where you can go back and search for your files anywhere, anytime.    

See also: The Digital Accounting Era: Five Steps For Accountants To Succeed.

Advertising is the way to connect you with potential clients. Start small with the traditional way – word of mouth. Tell your family, friends, and former colleagues about your freelance business and what you have to offer. Next, you can create social media profiles, purchase advertising space or create marketing campaigns that show your skills and services. Advertising can have a massive impact on the growth of your freelance career, especially at the start.

See also: Financial Services Marketing: Definition, Benefits and Best Practices for Small Businesses.

Where can you find freelance accounting jobs? 

Many new freelance accountants get their first jobs through friends, family, or networks from their previous workplaces. But if that option is not for you, don’t worry. There are many freelance job websites that can help you find clients. 

Listed below are the biggest and most well-trusted websites for freelance accounting jobs:

  1. Fiverr: On this platform, freelancers can post and advertise details of their services. Potential customers looking for a freelance accountant will scroll through and choose a suitable one. When you register as a freelance accountant on Fiverr, you can classify your services into basic, standard, and premium packages.
  1. Paro: Paro is more specific to financial services, and accounting is listed among jobs such as bookkeeping, financial analysis and planning services, and even CFO services. According to Paro, only the top 2% of finance freelancers make it through their rigorous vetting process, which includes a skills assessment, interview, test project, and reference check. 
  1. Upwork: Upwork is pretty much the same as Fiverr. Millions of jobs are posted on the site, and there are over 5,000 skills on offer, including accounting. One downside of being on a platform this size is that you have to really stand out against thousands of competitors to get clients.

Final thoughts 

Becoming a freelance accountant is a pretty straightforward process. If you constantly improve your knowledge, acquire modern accounting tools, and put yourself out there online, you will soon be able to build a successful freelance business. 

What’s Shoeboxed? 

Shoeboxed is an application that lets you digitize paper receipts in just a few seconds. It automatically extracts and categorizes important data from your receipts, which then gets approved by a team of data experts. Quick, reliable, and trustworthy, Shoeboxed guarantees to organize your piles of documents in the best way you can imagine! 

Go paperless for FREE with Shoeboxed

10 Reasons Why Bookkeeping Is Important To All Businesses

The main purpose of bookkeeping is to track the financial activities of a business. Alongside the growth of the business, bookkeeping becomes more complex with why the introduction of tax, assets, loans, and investments. Bookkeeping allows businesses to keep an up-to-date record of their revenue and expenses, the amount owed by the business, investors, and customers, and so much more. 

Obvious, detailed, and thorough bookkeeping is crucial for businesses of all sizes. This article will give you a detailed answer to the question “Why is bookkeeping important to all businesses?”

10 reasons why bookkeeping is important to all businesses

1. Optimizes your budget 

Bookkeeping is vital to any business because it makes budgeting so much easier. Bookkeeping helps you organize your income and expenses properly,  and makes it simple to review your financial resources and costs. A clear budget in turn creates a clear financial plan for your business. Then you can plan for future expenses and the anticipated resources needed to cover those expenses. 

See more: 9 Basic Types Of Bookkeeping That Every Bookkeeper Should Know.

2. Simplifies tax planning

Every business has to file their taxes at the end of the tax year. And for many accountants, tax season means scouring their desks to find missing paperwork. If this sounds familiar to you, then you may need to consider setting up a bookkeeping system. With an efficient bookkeeping process, you will have your financial information ready for tax season and your accountants will no longer need to spend hours on the tax filing process. Bookkeeping is important for your personal tax return as well. For business owners, a large part of their income comes from their business. To know their total annual income, they need to know what their business earned first. Having detailed balance sheets over time helps you predict your annual profits more accurately. 

3. Supports decision-making

The best decisions are informed decisions, and to make an informed decision, you need to have access to all available information. Bookkeeping tracks and compiles all of the information needed to support your financial decisions. 

An inaccurate understanding of your financial status and key performance indicators can lead you to make some erroneous decisions that could jeopardize your business. For example, in the short term, if you don’t understand your cash inflows and outflows correctly, you may experience overdrafts, late fees, and difficulty in making your payroll timely. In the long-term, if you don’t know your sales profitability, you may miss many opportunities to invest in the more profitable lines of your business, which leads to lower earnings. The same thing can happen to non-profit organizations. If you don’t know the true cost of your programs, you may make bad decisions on which programs to invest more resources in. Business owners can prevent these types of situations by maintaining accurate books and records. This will simultaneously optimize business operations as well. 

4. Tracks profit and growth

Bookkeeping provides financial information about your company through financial statements. Financial statements, including balance sheets, income statements, and cash flow statements provide information for a set period. For example, you can see if your business is profitable or not from the income statement. Together, all these statements take a snapshot of your business, allowing you to see how well the business has performed. 

Bookkeeping also helps to track business growth. Over time, you will collect months and years of data. You can use this data to observe trends and better understand your business progress and compare results across periods. By keeping regular financial records, you can map out your business goals more accurately and achieve steady growth. 

5. Manages and improves cash flow

Bookkeeping allows business owners to take control of their business’ finances. It draws a clear picture of how you spend money. As a business owner, you need to ensure that your customers’ invoices are paid on time. You can track when your customers and vendors pay their invoices through the routine records of revenues, expenses, liabilities, and receivables. You can also notice if you are paying your bills on time to avoid penalties. 

So, how does bookkeeping improve your cash flow? Bookkeeping provides information regarding your outstanding invoices, such as customer or vendor names, amounts, issued dates, and due dates. Business owners can use this information to implement better cash flow policies, such as shortening payment deadlines or adjusting the time of payment for vendor invoices. By doing so, you can increase the average amount of cash you have on hand at any given time. 

6. Greater focus on strategy

Disorganized books can weigh heavily on a business owner’s mind. Your bookkeeping should not be keeping you up all night. When your books are completed and in order, you can rest easy knowing that your company’s financial information is review-ready. You will then find your mind at ease and more focused on other elements of the business, such as planning and strategy. 

Tactical and strategic planning are at the core of business operations. As you are always thinking of growing and developing your business, bookkeeping will bring you closer to your short and long-term goals. You can use the information provided by bookkeeping to track the results of your strategy and adjust your goals accordingly. 

7. Maintains organized records

As your company’s financial records are important to a number of stakeholders – investors, lenders, customers, employees, etc, providing the information requested by these parties is vital to your ongoing operation. In this case, being organized is a skill that every business owner should be able to find information at any time. If you cannot provide records to the IRS, your business can face penalties and fees. If you don’t provide records that investors and lenders requested, it could result in the stoppage of cash flow and so on. Being disorganized with your books can compromise or even terminate your relationships with these parties. 

Furthermore, the last-minute stress of finding a crucial piece of paperwork can lead to missed deadlines and other errors. Businesses of any size can’t afford to make mistakes, and regular bookkeeping can help with that. By keeping an eye on your bookkeeping frequently, instead of leaving it to the last second, you will be able to maintain organized records and save a lot of time finding the information you desperately need. 

8. Meets law requirements

The law requires businesses to keep their financial records separate from the owner’s personal expenses. Failing to do this can lead to the termination of your business. 

Accurate financial records are essential to filing your tax return properly, and can also minimize the chance of being audited and/or incurring tax penalties. Businesses with bad bookkeeping practices tend to file late and may lack the proper documentation to support their filings. This can land you in deep trouble with the IRS. If you are audited and cannot support your income and deductions, the result can cost your organization a lot. 

9. Data analysis 

Bookkeeping matters because it helps with business analysis. Bookkeeping is a management tool used to analyze business performance. 

One of the most useful products of bookkeeping is the financial statement. Business owners should generate the financial statement regularly to know which lines of business are working or not working. Financial statements allow business owners to focus on their business’s strengths and improve on its weaknesses. 

Bookkeeping reveals the previous financial performance of your business. In order to make future plans, you need a good understanding of your situation. Bookkeeping will give you a clear picture of what does work and what does not. 

10. Makes it easier to report to investors

Investors and shareholders want to know the financial performance of your business so that they can determine the value of their investment. Let financial statements do the work. The combination of the balance sheet, income statement, and cash flow statement presents the value of the business. 

As stated above, the main product of bookkeeping is financial statements. Bookkeeping provides investors with up-to-date and accessible information. Then, investors will be able to make better, well-informed decisions, which is the ultimate purpose of bookkeeping. Bookkeeping is not only vital for current investors but future investors, too. Potential investors are more likely to invest in your business when you have organized information. Speaking of which, if you were an investor, would you invest in a company that did not have accessible and organized financial records? 

Final thoughts 

So now you have the answer to the question “Why is bookkeeping important?” It saves your money, time, and energy and helps you manage your business’s finances better. You can streamline the process even further by implementing a paperless bookkeeping system using Shoeboxed. Shoeboxed helps you clear your desks and turn your data into actionable information. Let us scan and organize your receipts, extract key data, create expense reports, and manage them in standard categorizations. Business owners no longer have to worry about keeping so many receipts, documents, and other accounting paperwork. Just leave it to experts. Contact us today and get ready to see how bookkeeping benefits your business. 

If you have any other reasons why bookkeeping is important to businesses, let us know in the comments!