What is outsourced bookkeeping, and when does it make sense?

Outsourced bookkeeping means an external accountant keeps your books for you, instead of an employee. The work is done remotely, usually in cloud accounting software.

What is included

• Recording sales, purchases, payments and receipts
• Reconciling bank accounts and ledgers
• Tracking what you owe suppliers and what customers owe you
• Closing the books each month
• Reports you can use: profit and loss, balance sheet and cash position

Outsourced, in-house or software alone?

Accounting software records transactions, but someone still has to enter them, check them and close the month. An in-house bookkeeper does that, but brings a salary and needs supervision. Outsourcing gives you the same work for a monthly fee, with a qualified reviewer behind it.

When it makes sense

• Your books are behind, or you do not trust the numbers.
• You do not have enough work for a full-time bookkeeper.
• Your bookkeeper has left and the knowledge left with them.
• Year-end and tax take weeks because the records are not ready.
• You want to spend your time on the business, not on the ledger.

What to check before you outsource

• Software: will they work in the system you already use, such as Xero, QuickBooks or Odoo?
• Review: who checks the work, and are they qualified?
• Timetable: when will each month be closed?
• Access: what access do they need, and how is it protected?
• Fee: is it fixed, and what does it cover?

What you still need to do

Outsourcing does not remove you from the process. You will still send documents on time, approve payments and answer questions about unusual transactions. The better you do that, the better your books will be.

Clarity Founders provides outsourced bookkeeping with a clean close every month.