Why Accountants Should Stop Offering Bookkeeping Services
- By JULIET AURORA
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- 04 Feb, 2014
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I love accountants – not in a romantic kind of way, but in a more ethereal or platonic way – and I am very happy to say I have great relationships with many accountants in my region.
I believe that an accountant plays a fundamental and essential role in the small business world. In fact, I used to be one myself, although I guess the old adage applies: once an accountant, always an accountant.
I’m sure everyone heard that “but” coming: but there are some things that accountants shouldn’t do, and bookkeeping is one of them. Need help with your tax return, tax planning, business plans and succession planning? You must absolutely speak to your accountant.
If you need help with your bookkeeping, head in the opposite direction of your accountant! It’s not because they don’t know how to do it. They definitely understand the fundamentals of bookkeeping, where the numbers need to go and why they need to go there, but many of them just aren’t very good at it.
The skill set of a good bookkeeper is very different from that of an accountant. The value each of them provides is also fundamentally different. Your bookkeeper should care whether every single credit card receipt was entered from your credit card statement. Your accountant? Not so much. Your bookkeeper should ensure your bank reconciliation balances to the penny, without having to hit that dreaded “Reconciliation discrepancies” account. Your accountant? Not so much.
The function of your accountant should be to look at the big picture and your business patterns, then provide you advice on what those patterns reveal.
Your bookkeeper should care about the small details of your business. Did you claim the $13 HST credit off of that $100 bill? The materiality levels of each are also very different. With most accountants, if it isn’t a material number to the scope of your business, they will just adjust it as a lump sum. That level will be different for every business, and it could be $100 or $1,000. To your bookkeeper, that materiality level is so much lower – and should be.
Business owners need someone watching the pennies in their business, and that isn’t, or should it be, your accountant.
If you are an accountant and you are doing bookkeeping for your clients, STOP! It isn’t a good use of your time or your abilities. Instead, you should be providing higher level activities, not reconciling their bank accounts or entering bills. Not only does this take away your valuable time from providing higher value services with a higher billing rate, you are too close to the numbers and will have a harder time providing an objective review of those financials.
Partner up with a good bookkeeping firm that can provide those services for you, even perhaps under your banner. Focus on what you do best and leave the bookkeeping to the people who pump their fist when their bank account reconciles!
Top 7 Benefits of Outsourcing Your Bookkeeping Operations The rise of the online community has changed the way in which we do business forever. It has brought us closer to people that can help with our day to day operations as well as backend business needs, enabling our businesses to run smoother and turn more profit. One of the key places that this has really made a difference for business owners is in bookkeeping.
Bookkeeping is much like going to the dentist—no one really wants to take the time out to do it but neglecting the issue can lead to serious repercussions. For the most part, this is why business owners just want to hire someone to do it and not have to think about it themselves until March or April.
Top Seven Advantages youGet from Outsourcing your Bookkeeping
But now, because of that great availability factor that the online world provides, it’s becoming more and more practical for companies to take this one step further. Instead of having in house bookkeeping services or doing it yourself, many businesses are finding the multitude of advantages outsourcing bookkeeping operations has. Here are the top seven benefits you can enjoy as well:
1. More time. Outsourcing your business’s bookkeeping operations frees up valuable time that can be put into bettering the company. Backend office functions can be a heavy distraction from the day-to-day running of things and having your bookkeeping in-house can lead to a conflict of interests. All of these time-wasters and distractions need to go—out of sight, out of mind.
2. Saving money. The bottom line is that by outsourcing your bookkeeping operations, you save money on paying full-time or part-time wages and benefits to an employee. Further, you also save on lost productivity costs that come along with hiring employees onto the payroll. By outsourcing your bookkeeping, you only pay for what you need—nothing more, nothing less.
3. Expertise on your side. Outsourcing gives you a great way to have full-time knowledge on your team without having to pay for it around the clock. By putting your books into the hands of a highly skilled staff who understand the best practices and how to properly staff for certain tasks, your job becomes a whole lot easier—and effective.
4. Focused work staff. By eliminating the distractions of the office from their jobs, places that take bookkeeping jobs are able to provide clients with more focused work. It’s hard for a bookkeeper to do their jobs around the hustle and bustle of a business—removing them from the site by outsourcing not only helps you focus on your business, it helps them focus on your business as well.
5. Team staff versus individual. When you outsource your bookkeeping, you’re placing your financial records in the hands of a staff that thrives on teamwork. Unfortunately, one bookkeeper is often not enough to find every subtle nuance that can benefit your company. But when you outsource, you have a team of workers and managers checking and double checking each other’s work, helping to ensure that you receive the best services possible. This also helps keep a separation of duties i.e. HR and purchasing are as individually accountable as credit services and customer care. When you have your sections running smoothly, they form together to produce a better and more cohesive unit.
6. Access to top systems . Outsourcing your bookkeeping operations gives you more access to the top tools in the industry. Most businesses can’t afford to pay for the extremely expensive bookkeeping programs nor can they afford to spend the time keeping up with changing laws and regulations. By outsourcing, you’re essentially purchasing those tools and that knowledge by proxy, but it’s even better—you don’t have to actually do any of the work! Plus, these top systems create nightly backups and keep organized records and books for years, ensuring that if the IRS ever does come knocking for an audit, you’ll be more than prepared for them.
7. Scalability options. Finally, outsourcing your bookkeeping allows you to expand or cutback in the blink of an eye. Whether you’re looking to grow your business or cut down on spending, having a reliable team at your behest, providing you with different plans and options will help you achieve your goals. Outsourcing provides flexibility that in-house bookkeepers just can’t provide.