Brass scales with coins
When small businesses start to grow there’s always a difficult choice to make. 
 
Do you employ people with the skills your business needs or outsource business functions like bookkeeping? 
 
Here we take a look at why outsourcing can be a good choice for your business. 
 

Meeting your bookkeeping needs quickly 

When you work with a qualified and professional bookkeeper, they will be able to set up the processes and systems you need quickly and efficiently. 
 
Often small business owners come to us because they have been so busy that a backlog of financial paperwork has built up. Deadlines are often looming for their company tax and self assessment tax returns, VAT or CIS. 
 
If you intend to recruit someone on a full- or part-time basis it could take weeks to advertise, interview, recruit and teach someone how your current systems work or to set up new ones for you – time that you really don’t have. 
 

Managing your costs 

You can have as a much or as little outsourced bookkeeping support as you need. For example, you might need some urgent help to get your records in order and then just a few hours each month to keep everything running smoothly. This can all be done cost effectively as a monthly retained service that is delivered remotely. 
 
If you employ someone you will probably need to provide quite a few things for them to do their job, including: 
office space 
a desk 
computer equipment and security 
business applications like Office 365 
a telephone. 
 
You will also pay PAYE tax contributions, National Insurance and employer’s pension contributions, and you will need employer’s liability insurance and will have to manage payroll, holidays, sick leave and possibly maternity leave for new Mums and Dads. In contrast, all of this is covered in your outsourced bookkeeper’s fees. 
 

Flexibility 

If you’re working with an outsourced bookkeeper as your business grows you can top up with a few extra hours of support or different services when you need them. Equally, if you realise that you don’t need all the hours you expected, you will normally only have to give a month’s notice to reduce the number of hours they work for you. 
 
If you employ someone it will probably be for a fixed number of hours a week. If you need them to take on some extra work, at year-end for example, you will probably need to pay them overtime rates. If you find you don’t need them for all their contracted hours you will need to change their contract of employment, which could be a difficult conversation to have. 
 

Experience 

Make sure you check the qualifications held by any bookkeeper and that they are a member of a regulated body. 
 
Professional outsourced bookkeepers will be maintaining their skills with continuing professional development (CPD), so you can be confident that they are up to date will all the latest requirements. 
 
They will also have access to advice and support from their professional body. They will be knowledgeable and will have plenty of experience of learning all about their clients’ business needs. 
 
If you employ a bookkeeper, you might need to pay for their professional fees and training needs. 
 

Collaboration 

Outsourced bookkeepers have plenty of experience of working with other professionals, such as accountants. They will provide all the right information in an easy-to-use format, saving you time and reducing costs. 
 
They can also produce a range of useful reports and give recommendations about how to organise and review your finances so that you have the clearest possible view of how your business is running. 
 
This can help you to confirm whether new premises, equipment or business opportunities will meet your needs. 
 

How to choose 

Many small and fast-growing businesses choose to outsource a variety of important business functions in the early days. Later they review which ones should be brought in-house. This is a good starting point and will give you time to assess the value a good bookkeeper can add to your business 
 
The decision also depends on your type of business. If you have a high number of account transactions every day and it’s important to have someone on the spot to answer questions, you might think an employee is the best solution. 
 
Before you choose, it’s worth speaking with outsourced bookkeepers who use Cloud-based solutions and automation. You might be surprised about how many of your transactions can be automated so that you can have an ‘anywhere, anytime’ view of your business finances without manual data entry. 
 
If you would like to discuss an outsourced bookkeeping service for your business, please get in touch
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