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When is the right time to use a single bookkeeper?

Accounting and bookkeeping are rarely top of mind for entrepreneurs and executives, but growth minded leaders understand the importance of accurate, on time financial reporting. A challenge for many is knowing and deploying the right resources for a company’s needs. Internal or external? Individual or team based? Onshore or offshore?

Some companies only need one bookkeeper. A single bookkeeper, or a firm that provides single bookkeepers (QB Live, Pilot, Bench) can be a great low cost solution for firms with a simple financial structure – particularly when working alongside an end of year tax preparer. These firms usually have the following characteristics:

  • Owner initiates every single transaction
  • One bank account
  • No employees
  • Not growing
  • Accounting is only conducted for tax filing

The flipside of a low cost solution is increased risk and less robust systems. A single bookkeeper is also a single point of failure, which your business may be more or less sensitive to. Consider that following situations and the impact (or lack thereof) they might have on your company:

  • Missing payroll one cycle
  • A lost check
  • Paying an invoice twice
  • An employee stealing from the company (and hiding their actions)
  • Applying payment to the wrong invoice

Growing companies, with more complex financial structures, likely need more comprehensive accounting resources but are not yet large enough to warrant hiring a full time internal team.

Outsourcing can be a cost effective way to reap the benefits and expertise  of a larger-company accounting team at a lower price point. This allows leadership to delegate an essential task to experts, while still prioritizing resources for development of the firm’s core product, service, or function.

The benefits of an outsourced, fractional accounting team include:

Consistent financial understanding – complete, accurate, and on time financial statements are the foundation of understanding the health of any company.

Competitive advantage – Win in your industry with a clear understanding of margins across product or service lines; customer profitability; historical trends and the impact of business decisions on profitability.

Business continuity – Churn in internal accounting roles can be costly and distracting. The best outsourced accounting firms provide overlapping teams that cross-train on client portfolios resulting in continuity of service.

Reduced risk of fraud – According to the association of certified fraud examiners, certain types of fraud are four times more likely to occur in small businesses. This is due in part to the lack of expertise and experience available in small companies. Growing businesses can mitigate this risk by outsourcing accounting activities to a firm that provides an experienced accounting team on a fractional basis.

If your company is one that aspires to improve its performance, consider accounting activities to a team-based firm that provides an essential and reliable foundation for growth.