More and more businesses are using bookkeeping firms these days. However, some small business owners still do the bookkeeping themselves, hire an employee, outsource to their CPA firm, or use a staffing company. Which option is best for you?
Advantages of working with BooksTime instead of:
The appeal is usually based on the cost. It can feel like you’re getting the bookkeeping for “free” if you do it yourself.
However, a bookkeeping firm is a better solution for most businesses. The main reason is simple: your time isn’t free. Every hour you spend on the bookkeeping is an hour that you could have spent on growing your business.
Bookkeeping is our passion. It’s what we do best. But unless you’re a professional bookkeeper, it’s probably not your passion or what you do best.
Life is short. With BooksTime, you’ll save time on back-office tasks. That’s time you can spend focused on making your business succeed, pursuing your passions, or spending more time with your family.
Besides, if the company grows or if you ever want to sell it, doing the bookkeeping yourself is not a scalable solution.
Some companies still hire employees in their office to do the bookkeeping. This used to be the most common way companies handled their bookkeeping. Now that modern technology allows bookkeeping to be done remotely, businesses are quickly moving away from using in-house employees for a number of reasons:
Employees have a lot of hidden costs. Employers have to pay employer taxes, which are often in the neighborhood of 10% of the employee’s base pay rate. Employees also typically require paid time off, whereas a bookkeeping firm does not. Plus, employees require management and training time, recruiting costs, insurance, equipment and software, office space, and other costs.
An employee works the same hours every week, but the amount of bookkeeping work changes from week to week. It can be much higher at the beginning of the month, or at the beginning of the year, or in tax season, or if the business grows or has seasonal variation. As a result, the employee always has either too much time available (and the employer is overpaying) or not enough time available (so work gets done more slowly, and might not be finished on time).
If you hire an onsite employee, you have to pay whatever the local market rate is for a bookkeeper in your area — but in many cities, the local rate is a lot higher than rates in other parts of the country.
If the employee gets sick, or takes vacation, etc., there’s usually nobody who can replace them. (With BooksTime, even if your dedicated bookkeeper needs to take time off, we’ll have a backup bookkeeper trained on your processes and ready to go — at no extra cost to you.)
If your business grows a lot, you might have to build a whole team of bookkeepers and accountants internally — or you could outsource your entire bookkeeping and accounting department to BooksTime. If your needs grow, we’ve got you covered.
Many companies serve as matchmakers between employees looking for work and employers who need bookkeepers. The downsides to this approach are simple:
Recruiters charge you 20% of the employee’s annual salary. If you need another bookkeeper later, you’ll need to pay that 20% again. Staffing companies charge you double of what they pay their bookkeepers, without adding much value.
People who work at staffing companies often don’t stick around for a long time, so you may have to start fresh with a new bookkeeper every few months.
Bookkeepers working at staffing companies often have lower qualifications than bookkeepers working at a professional bookkeeping firm like BooksTime.
Small businesses are increasingly using bookkeeping firms, which provide bookkeeping services on an outsourced basis. This solves many of the problems with the other alternatives described above.
However, most bookkeeping firms:
Don’t provide a dedicated bookkeeper to each client. Instead, there’s a rotating team of different people who may be assigned to work with a client.
Hire bookkeepers with very little experience. They claim these bookkeepers are supervised by more senior staff. However, mistakes happen frequently given the lack of expertise of the staff who are actually the ones are doing all the work.
Force clients to work with a specific type of accounting software, even if it’s not the ideal fit for that client.
Only offer standardized service plans and don’t adapt to meet each client’s unique needs.
Don’t offer bookkeepers with industry-specific expertise.
Charge very high fees.
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