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Investing in the art of accurate Bookkeeping to track your expenses

By:
Archana Madhusudan
June 15, 2021
Image of a person who manages the financial operations of a company.

If you are a seasoned business owner, you will be aware that you will have to spend money to earn money. It is equally important to ensure your financial records are accurate. This is why it is important to have a solid bookkeeping framework to keep track of your financial operations.

Bookkeeping is a crucial process that helps maintain your financial records. The benefits and the necessity of Bookkeeping are well-known facts. We reiterate them below because that's how important they are.

The ‘Why’

Bookkeeping is a must because it:

  • Keeps an accurate record of your cash flow.
  • Ensures compliance with laws and regulations.
  • Makes auditing easier and penalty-free.
  • Helps maintain good relations with investors and banks.
  • Helps to budget accurately for the fiscal term.
  • Ensures transparency of the finances.
  • Helps mitigate financial risks.

The advantages of bookkeeping are endless. With so much to gain, partnering with a company that offers bookkeeping services is one of the best decisions business owners can make in the current scenario. In fact, the outsourcing option can be a great relief, especially for organizations plagued with bookkeeping pitfalls and challenges.

Challenges in bookkeeping

The process of bookkeeping is no child's play. Bookkeeping requires expertise, patience, meticulousness, and time. For a business, bad bookkeeping procedures can eventually snowball into the following nightmarish challenges:

  • Lack of planning and organization

Business and personal accounts must be classified and maintained separately. When the two accounts are in disarray, the financial health status of your organization becomes a blur. This setback can stall your company's progress and make the business financially vulnerable.

  • Losing track of expenses

Small business owners who still depend on paper receipts and invoices need extra care with bookkeeping. Without a proper system in place, the accountability of cash transactions will become questionable.

  • Lack of compliance and regularity

Being on the safer side of the law is mandatory if you want your business to grow. Irregularities and non-compliance in your financial system are detrimental. It will lead to costly and irreversible repercussions that will dent the goodwill of your business forever.

  • Inaccurate tax preparation

Bad bookkeeping will eventually reverberate when the tax season comes up. Even small businesses need to pay taxes. Inaccurate bookkeeping leads to chaotic tax preparation, which will eventually put the business under IRS scrutiny.

When you analyze the impact of these hurdles, it makes sense why outsourcing bookkeeping is more of a necessity than a luxury. It is an investment that brings you specialized professionals to keep every single financial detail on track.

The ‘How’:

None of the above challenges is likely to happen when you choose to outsource bookkeeping services. If you are still doubtful, we urge you to read on.

Why should you consider outsourcing your bookkeeping?

  • Improves efficiency

Dedicated bookkeeping services employ industry experts with the knowledge to handle simple or complex bookkeeping processes. This assurance covers your business with an extra layer of protection against financial fraud, irregularities, and embezzlement.

  • Refines accuracy

When professionals monitor your cash flow, there's nothing that can escape their scrutiny. Bookkeeping services give you access to affordable, user-friendly software to refine your accounting functions. As a result, every transaction is transparent, accounted for, and accurate to the last number and detail.

  • Saves time

With a reliable outsourcing partner to take care of Bookkeeping, businesses can focus on their core functions. The partnership allows owners to focus on building strategies, making deals, allying with new customers, and so much more.

  • Impacts decisions

Bookkeeping services paint a clear picture of the company's financial health. This information is vital to make decisions that impact the future of the business. In addition, these services highlight unnecessary expenditures that can be re-routed in ways more beneficial for the business.

  • Reduces expense

Investing in bookkeeping services is often far less expensive than hiring and engaging an entire bookkeeping team in-house. Apart from the obvious costs like salary and perks, there are numerous hidden miscellaneous costs that are unavoidable with an in-house team. If you are looking for a one-time investment, outsourcing is the best choice.

  • Scaling flexibility

Busy tax seasons call for more resources to handle the huge influx of work. Outsourcing firms give businesses the flexibility to scale up or scale down as per their seasonal tax requirements.

Outsourced Bookkeeping Industry Insight

  • Steady market growth

The global multi-process finance and accounting outsourcing (FAO) market grew by 10% to reach $4.3 billion (Annualized Contract Value) in 2012, according to a report by the Everest Research Group.

FAO-Annual-Report-Executive-Summary

  • Satisfied businesses

A substantial portion of that 10 percent growth (65%) came from clients who started using outsourced accounting in previous year and have continued, extending their contracts with their service providers.

  • Shift from cost to cost plus value add

As the outsourcing bookkeeping industry evolved, virtual accounting firms are providing greater value than in-house bookkeepers could, thanks to their experience across similar businesses and a steeper learning curve. Businesses now evaluate their choices based on much more than just cost.

The ‘When’

Now that you know the reasons to outsource Bookkeeping, you also ought to know when to reach out for these services. We suggest businesses outsource Bookkeeping:

  • When they require expert advice and guidance.
  • In emergency situations like audit and tax seasons.
  • As a cost-effective alternative.
  • When Bookkeeping shows signs of irregularity.
  • To curb the overhead costs of hiring teams.
  • When the core business requires more attention.
  • For a better work-life balance.

The final word

If you are looking to scale your progress with better Bookkeeping, it is time to make the wise decision of partnering with Tickmarks. We give organizations the added advantage of availing bookkeeping services online . Our virtual bookkeeping services are powered by professionally qualified teams that handle your company's bookkeeping, irrespective of where you are located. Visit our page to know more about our online accounting services.

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