The top 8 benefits of outsourcing your bookkeeping to an accountancy firm

Outsourcing your accounting and/or bookkeeping responsibilities to an experienced firm of Chartered Accountants, such as Arnold Hill & Co, can free up time and in-house resources, make tax compliance quicker and easier, reduce errors, and save money.

In this guide for SME business owners and directors, we explain the 8 main benefits of outsourcing your bookkeeping, and how Arnold Hill & Co can support you. If you would like to discuss any of the issues raised in this guide in further detail, please call one of our bookkeeping team today on +44(0)20 7306 9100, and we will be happy to help.

There are several circumstances in which your business stands to benefit from working with an outsourced bookkeeping provider:

• You are a small or mid-sized business that does not require a full-time in-house accountant to undertake the task.
• Your company has not been able to find a suitable employee with the right skills at an affordable cost.
• Your company is rapidly growing and needs to scale its bookkeeping requirements to keep pace with growth.
• You need temporary support to increase your capabilities – e.g. extra help with end of year reports, maternity cover, etc.

Any business, whatever its size or industry sector, could benefit from working with a professional accountancy firm under certain circumstances. 

For larger businesses that have a dedicated in-house finance and accounts team, a professional accountancy firm can support internal resources by providing impartial advice, additional capabilities and skills when required,  and taking on routine accounting functions so that the team can focus on more value-driven tasks.

1. Lower costs

Outsourcing your bookkeeping to a professional accountancy firm – contrary to popular belief – will often save your business money compared to using in-house resources.

When outsourcing, you only pay for the services you need, without any of the costs involved with employing staff full or part-time.

• Reduced payroll expenses – no employer’s NI, taxes, sick pay, holiday pay, pension contributions etc.
• No supporting infrastructure – office supplies, computer hardware, desk space.
• No recruitment and training costs.

2. Save time

Even in a small business, bookkeeping can be extremely time-consuming. In the early days of trading, business owners frequently have to find time for accounting and bookkeeping themselves, on top of their day-to-day responsibilities and family life, increasing the risk of stress and burnout.

Outsourcing your bookkeeping, therefore, saves valuable time that can be deployed towards growth-centred activities. By assigning your accounting responsibilities to a safe pair of hands you will free up more time to attract talent to your business, make sales, and even expand your product and service offerings.

Rather than bookkeeping becoming yet another drain on your time, your financial accounts will become a valuable source of business intelligence, providing the data and analysis you need to make sound financial decisions for your business.

3. Access the level of expertise you require

Chartered Accountants spend several years obtaining the qualifications they need to deliver professional services, and the best accountants combine this with many years of practical experience working with companies in a wide range of sectors. 

This level of expertise may be difficult to obtain in-house at a cost that suits your budget – and for many businesses it may not be necessary to employ an experienced accountant full-time.

Outsourcing your bookkeeping to an experienced firm gives you access to the specialist knowledge your business needs without having to invest in employing and training an expert in-house. An established accountancy firm will be able to advise you on the right level of support you need for your stage of growth and business objectives and give you instant access to the right level of expertise and experience – at a fraction of the cost of employing a professional accountant internally.

Furthermore, with outsourced bookkeeping you only pay for the services you require, when you need them, rather than having someone on your payroll all year round.

4. Achieve accurate results

Inaccurate bookkeeping can be costly for businesses, leading to errors in tax calculations and invalid financial figures on which to base investment decisions, growth plans, and loan applications.

Unfortunately, bookkeeping mistakes are easy to make for business owners who are stretched for time and without direct accounting experience – and these errors can build up over time to undermine the value and accuracy of your business accounts. Working with an outsourced bookkeeping specialist ensures maximum efficiency from day one, giving you confidence in your financial planning decisions, income forecasts, and tax calculations.

Your bookkeeping partner will have a team of professionals working on your account, and hands-on experience of all the main accountancy tools and software platforms you use. This equips them to carry out complex tasks quickly and accurately, without draining your in-house resources. Additionally, many professional bookkeeping companies use automated accounting systems that increase two-way transparency, giving you a real-time oversight of your cash flow and financial transactions, and quickly flagging any issues for rapid resolution.

5. Access detailed financial reports

Most bookkeeping companies now deliver their services through a cloud-based user interface, which customers can access through an online portal using any internet-enabled device.

The details and functions of these portals vary from company to company, but almost all can give you real-time access to your financial records and reports, and many allow you to generate custom reports at the click of a button.

• Review your profit and loss, balance sheet, and cash flow history.
• Share information with stakeholders.
• Access historic financial data, reports, and VAT returns.

The benefit for business owners is the 360° visibility this gives you over your expenses and income – providing an on-demand snapshot of your cash flow and enabling you to plan your liabilities and expenses to suit your 
financial cycle. 

You will also be able to run custom reports on detailed elements of your accounts to help you make informed strategic decisions about technology investments, capital expenditures, and recruitment. 

Your bookkeeping partner can advise you on the right metrics to measure and reports to run to give you the business intelligence you need for different applications. He or she will also make analysing your reports quick and easy, drilling down into the figures and raw data to provide valuable insights.

6. Make smarter, more informed decisions

It is difficult and risky to make business decisions without up-to-date present and historic financial information, and income and expense forecasts for the coming period.

Simply put, better financial knowledge of your business equips you to make better decisions that yield better results.

Outsourcing your bookkeeping to an experienced firm of Chartered Accountants, therefore, provides business owners with a great advantage when undertaking investments, considering product launches, and making hiring decisions.

Your accountant will give you insights about where you should invest your money and when to make strategic decisions, letting you focus on the most profit-generating revenues or resources and managing your operational risk – avoiding unproductive or less profitable avenues.

7. Make tax compliance less stressful

Taxation and regular HMRC reporting liabilities may be an inevitable aspect of running a business, but it should not have to monopolise your time or distract from your primary responsibilities.

A well-organised bookkeeping management system will help you keep on top of your payroll, VAT, and Corporation Tax liabilities, with full compliancewith the new Making Tax Digital (MTD) requirements.

An experienced accountancy partner can run your regular VAT returns and annual company tax returns on your behalf and provide forecasts 
to help you plan your taxation liabilities.

For business owners, this reduces the stress and time burden associated with accounting, avoiding a rush to complete submissions before the deadline, and eliminating the risk of late payment penalties and fines.

8. Avoid staffing and turnover issues

In a growing SME, each staff member plays an essential role in the operation and success of the business. With more tasks to perform than there are hours in the day, balancing your core commitments with admin and accountancy obligations can be a source of severe stress to overstretched business owners and their teams.

During pinch periods, such as the school summer holidays and Christmas, or when staff are off due to illness or annual leave, bookkeeping responsibilities can genuinely impact the ability of a small business to carry out its core functions and satisfy its customers.

The result for your team can be stress, overwork, an increased risk of errors, and ultimately, sickness and turnover issues. While outsourcing your accountancy and bookkeeping does not solve all these issues, it does take care of an important back-office aspect of running a business, making it easier to navigate the complexities of staff resourcing and service delivery without having to work unreasonable hours just to satisfy your HMRC reporting requirements.

Improved business planning

At the same time, the improved visibility that comes with working with a professional accountancy firm gives you better control over your cash flows, helping you plan for variable demand and staffing patterns throughout the year.