As a startup business owner, it often makes sense to minimize costs by directly managing your own bookkeeping tasks when you’re starting out. But as your startup grows, the time and expertise it takes to complete your bookkeeping properly each month mean you’ll inevitably engage a bookkeeping professional.
If you’re at this stage, you’re likely wondering: Which bookkeeping solution works best for startups?
Most early-stage startups and small business owners have too few transactions or administrative tasks to require a full-time bookkeeper. Instead, the majority choose one of these two options:
- Hire a part-time bookkeeper as a freelancer or permanent employee to work with your company for a set number of hours each month.
- Work with an outsourced bookkeeping service with a team of bookkeepers remotely handling your everyday finance tasks.
These solutions cover your basic bookkeeping tasks, such as recording transactions, reconciling bank and credit card accounts, and managing accounts payable. But the main difference between hiring a bookkeeper and outsourcing bookkeeping is that an outsourced bookkeeping service gives you access to an entire team of experts.
As a result, they are in a better position to review and troubleshoot a wider range of situations than an individual bookkeeper can. For startups, this key difference produces five major benefits of outsourcing bookkeeping.
5 Benefits Of Outsourced Bookkeeping Services
1. You get bookkeeping solutions that can scale with your business.
Your bookkeeping solution will need to scale as your startup grows and evolves. Because most outsourced bookkeeping teams have access to experts on multiple topics, they can easily accommodate your changing bookkeeping needs.
At first, your startup may just need someone to manage your accounting software and perform routine bookkeeping tasks. As your finances become more complex and you need extra support, many finance firms that offer outsourced bookkeeping also have the expertise to provide advanced accounting and CFO services and experience across different business verticals.
While a part-time or in-house bookkeeper may have a keen understanding of your type of business, you may face hurdles as your business expands. A part-time bookkeeper may not have the skill set to accurately set up the bookkeeping systems required to support a new area of business. You may then have to hire another bookkeeper who can cover the new aspects or find a different bookkeeper who can do both.
2. You get more expertise for your money.
It can be challenging to find a high-quality bookkeeping expert in your business vertical to hire on a part-time basis, and it’s tempting to hire a less experienced bookkeeper at an hourly rate for cost savings.
We’ve seen many businesses switch to outsourcing bookkeeping after missing out on opportunities because their part-time bookkeeper wasn’t familiar with the particular requirements of their industry.
When you work with an outsourced bookkeeping firm, you get the advice and oversight of their senior bookkeepers and experts in your vertical without the cost of hiring individually.
3. You get full-time bookkeeping access.
The time a part-time bookkeeper will dedicate to your account is set in their contract; outside of these hours, they likely have other clients. This can be a problem if your bookkeeper is unavailable when time-sensitive bookkeeping tasks (such as responding to customer requests or delivering up-to-date financial reports during a fundraising process) come up. You may end up waiting days for a response.
When you work with an outsourced bookkeeping solution, you can contact the team at any time during regular business hours. Some solutions even offer extended hours to get answers to your questions, no matter the time.
In addition to having less restrictive contact hours, outsourced bookkeeping solutions can also be more flexible about the amount of work required each month. As your transaction volume increases or business finances become more complex, the bookkeeping may become more than a part-time bookkeeper can tackle. However, the work might not be enough to require a full-time or in-house bookkeeper.
4. You get access to better bookkeeping technology.
One of the biggest challenges for any business is keeping up with the latest technology. As a business owner, you're already stretched thin, and the last thing you want to do is spend your time and money trying to figure out how to use or pick bookkeeping software. That's where an outsourced bookkeeping service can help.
Alternatively, if you are working with an in-house or part-time bookkeeper, you typically have to explore bookkeeping and accounting software on your own. Whoever you hire will then use that software vs. coming to the table with their own platform.
If you don’t already have software in place, a bookkeeping service has the expertise to help you find the right technology that can save you time and money. As a full-service team, they have experience working with various platforms and will know which is best suited for you.
5. You get better equipped for tax season.
Whether you work with a part-time bookkeeper or an outsourced service, your bookkeeper will lay the groundwork for a smooth tax preparation and filing experience. Having a team of bookkeepers can help here. They’ve likely had extensive experience preparing business taxes and will have the bandwidth to get your books ready ahead of time.
Your virtual bookkeeping team will ensure that your expenses and transactions are correctly categorized, documented, organized, and readily available for the tax accountant to process. When your bookkeeping service delivers the tax packet, the accountant won’t need to waste time looking for missing financial information or sorting inaccuracies. You can be confident that you won’t be leaving money on the table.
Zeni: Modern Outsourced Bookkeeping Solutions Designed For Startups
Zeni is a full-service finance firm that provides bookkeeping, accounting, and CFO services for startups and small businesses. Whether you’re looking for a service that manages your day-to-day financial functions, a senior finance expert to put together projections, or advice on annual tax filing, Zeni’s complete solution has you covered.
Advanced bookkeeping practices are the basis of what Zeni does and are included in all our service plans. Our customers tell us they prefer Zeni to other startup bookkeeping solutions because they get the following benefits:
- Tech-powered efficiency — We use AI and machine learning to complete your bookkeeping daily to GAAP standards and manage every bookkeeping and accounting task quickly and accurately.
- A responsive team of experts — You get a single point of contact with expertise in your industry — no back-and-forth finding the right person to speak with. Plus, you’ll get informed, comprehensive answers fast.
- A predictable monthly fee — Most bookkeeping services charge an hourly rate, which can be unpredictable month to month. Zeni charges a set monthly fee for all your bookkeeping.
- Instant finance insights — There’s no need to wait for your bookkeeping service to deliver financial statements or respond with the metrics you need. You can instantly access up-to-date financial data on the Zeni Dashboard.
- A complete range of services — As your business grows, our team offers additional finance support to help you better run your business, such as complex accounting, CFO-level guidance, and yearly tax returns (including R&D tax credit).