Bookkeeping is essential for many business functions, from analyzing your company’s performance to budgeting to meeting tax compliance standards and government regulations.
Fortunately, there are numerous options to choose from when it comes to managing your accounting functions. You could hire local bookkeepers, employ in-house bookkeepers, or opt for outsourced bookkeeping services.
As your business grows, so do your client’s expectations. Because selecting and hiring local or in-house bookkeepers can take significant time and effort, many businesses turn to outsourced bookkeeping.
This can often be a more flexible and cost-effective alternative to managing your financial reporting. However, finding an outsourced bookkeeping firm capable of handling all your accounting functions can be challenging.
Through extensive research, we’ve narrowed down the field to 10 firms that provide an exceptional outsourced bookkeeping service to give you more time to focus on growing your business.
We will also explain why it is beneficial to outsource your bookkeeping functions, when you should consider outsourcing bookkeeping, and how it all works.
Why Companies Are Choosing To Outsource Their Bookkeeping Services
By outsourcing bookkeeping services, you can free up your time to focus on running your company’s operations, analyze and identify new opportunities for business growth, and receive much-needed support for tax preparation.
But perhaps the single most important reason you should consider working with outsourced bookkeeping companies is cost efficiency.
For instance, hiring a full-time in-house bookkeeper can cost your business between $33k and $54k annually. If you add benefits, payroll taxes, and other overheads, this figure shoots up dramatically.
On the other hand, if you choose to go with an outsourced bookkeeping company, the associated costs can range from a few hundred dollars to up to $2k per month. The best choice depends on the size of your business and the complexity of your operations.
The opportunities of outsourcing your bookkeeping are wide-ranging, and each of them can give your business a competitive advantage. From our experience, it pays dividends to spend time evaluating all angles and make more informed decisions.
When Should You Outsource Bookkeeping?
Generally speaking, there are some telltale signs of when it is time to consider outsourcing your bookkeeping processes. These include but are not limited to the following:
- Doing it yourself takes more time than you can afford to spend.
- It is increasingly difficult for you to make sure your financial data is accurate.
- You are struggling to keep track of your business’ finances.
- Keeping tabs on your accounts receivable and accounts payable is becoming troublesome.
- Making your estimated tax payments has become a time-consuming process.
As a business owner, only you can decide on the right time to make the switch. However, from our experience, it is best to do so sooner rather than later.
Even before your business is profitable, consistent and accurate bookkeeping will prove to be invaluable as your company grows.
How Does Outsourced Bookkeeping Work?
The process starts with selecting the right provider so that your business can reap the benefits of outsourcing bookkeeping. The right choice depends on your business’ needs and budget.
There are three main routes you can take:
- Collaborate with freelance bookkeepers: This is often a good fit if your operations are simple and you’re looking for someone to complete specific tasks at flexible rates.
- Work with outsourced accounting and bookkeeping firms: This is a more stable solution, as accounting and bookkeeping firms have broad expertise and can provide sound bookkeeping no matter the circumstances (during peak periods, for example).
- Hire remote contractors: This option provides many of the benefits of both non-remote freelance bookkeepers and outsourced bookkeeping firms. You can still enjoy the cost savings of not having a permanent employee but with a higher degree of control, as a remote bookkeeper essentially becomes part of the team.
Once you have narrowed down your requirements from a bookkeeping provider, it’s time to research and select the partner that fits the bill.
What Are the Top Bookkeeping Outsourcing Services Providers?
We have compiled a list of 10 of the best outsourced bookkeeping companies, in no specific order, that fit a diverse set of requirements. Whether you’re part of an SME or a booming corporation, one or more of these solutions will likely meet your outsourcing needs.
TOA Global is one of the best-known talent solutions providers in the accounting industry. Founded in 2013, it has since built a top talent pool of 3,400 professionals from the Philippines servicing more than 1,000 clients worldwide.
Its specialists can cover over 100 different roles for their clients and need to have at least a bachelor’s degree to be considered.
TOA Global’s talent receives regular training to ensure they are up to date with their skill set in order to deliver high-quality service.
Although we are not a provider of bookkeeping services per se, we are best placed to help you hire experienced and qualified bookkeeping professionals based in Latin America.
We do this without adding significant overhead costs, all while helping you interview and hire pre-vetted professional bookkeepers in under 21 days.
With the aid of our pool of 35k+ candidates, you can build a high-performing finance team well versed in any bookkeeping software while staying within your budget.
Based in Canada, Bench is a great option for small businesses in need of help with bookkeeping and tax preparation.
Its professional services include month-end financial reporting, tax advisory, and monthly bookkeeping. With the help of its proprietary software, Bench expertly manages its bookkeeping tasks while providing you with an easy-to-use interface.
One downside, however, can be the possible incompatibility between its accounting software and yours.
The Paro platform connects firms with expert accountants based on their exact requirements. Its pool of talent is US based and well versed in all aspects of bookkeeping and accounting.
What is special about Paro is that it accepts only the top 2% of applicants with at least 15 years of experience on its platform. Therefore, you can rest assured that you only have the most qualified individuals at your disposal.
Additionally, Paro’s proprietary AI software has been designed to match the right talent to companies faster than traditional recruiting methods.
QuickBooks Live is a good option for firms that use the QuickBooks ecosystem.
The platform is easy to use and highly intuitive. You simply answer a few questions, and then you are connected with a live bookkeeper who can provide assistance on the spot.
The service has been solely designed to cater to the bookkeeping needs of small businesses or start-ups.
Bookkeeper360 is an alternative for small businesses that have a restrictive budget and cannot hire an in-house accountant.
It offers diverse solutions, including bookkeeping, accurate financial reporting, and payroll, among others.
Its software is compatible with a wide range of bookkeeping programs and provides a great way for you to leave the tedious work in the hands of skilled professionals.
Active in the bookkeeping industry for over 25 years, Bookkeeper.com prides itself on being an all-in-one small business solution.
Its financial specialists can assist you with a wide range of financial services. From accounting and bookkeeping to payroll and consulting, everything is delivered online, making it a perfect solution if you work remotely.
Bookkeeper.com has fixed-priced services, but you can also opt for custom pricing depending on your specific needs.
Billed as the easiest bookkeeping service out there, Merritt Bookkeeping caters to businesses with a limited budget. If you are looking for flat-rate pricing that won’t put a strain on your budget, then this outsourcing service may be what you’re looking for.
Bear in mind, though, that Merritt Bookkeeping keeps its price so low because it delivers only basic bookkeeping services, such as recording financial transactions, account reconciliation, and the provision of basic financial information.
Since Merritt Bookkeeping has no setup charges or transaction limits, you can definitely give it a try until you need more advanced bookkeeping services.
Pilot is an online bookkeeping service specifically designed to cater to the needs of start-ups with high growth potential.
You get a dedicated financial expert for book reconciliation, compilation of financial statements, and guidance on financial best practices. You can also opt for a CFO service as an add-on.
Help is also available to set up integrations with Gusto, Expensify, and Stripe. All bookkeeping is done with QuickBooks, and support is given to transition your books to the required platform when you are in the onboarding stage.
As one of the leading freelance marketplaces, Upwork provides you with a quick way to connect with and hire the best talent according to your budget. It is free to join as an employer, but you do have to pay subsequent administrative fees.
You can filter your search according to your specific requirements, but bear in mind that the freelancers you will work with are generally available only for short-term or part-time projects.
You’ll also need to handle the screening process on your own, which can get time-consuming quite quickly.
Furthermore, you shouldn’t expect high-end bookkeeping services. In a nutshell, you get what you pay for.
What is the difference between accounting services and bookkeeping services?
Bookkeeping and accounting are both important aspects of a company’s finance management. At first glance, they can seem quite similar, but there are a few main differences.
For example, bookkeeping normally consists of payroll, invoicing, filing receipts and bills, and recording business transactions. Accounting processes, on the other hand, involve compiling financial statements and reports, budgeting, tax returns, and evaluating the business’ financial performance.
The tasks bookkeepers and accountants perform can overlap, especially in the case of small businesses. However, more often than not, these duties are highly dependent on the requirements of the business.
One important similarity is that, like with bookkeeping, outsourcing accounting can be a highly efficient approach if you collaborate with the right provider.
What is the difference between local bookkeeping and virtual bookkeeping?
The main difference between local and virtual bookkeeping is how they operate. With a local bookkeeper, you have physical access to the person in charge of your books. This might make it easier to handle any irregularities with the deliverables and ensure accurate reporting.
With a virtual bookkeeper, everything is done online, which can make it more flexible to work with them. They can be either US-based or have their “office” anywhere in the world. Communication is done either online or via telephone, and you have the option to pay as you go.
Are there any disadvantages to outsourcing your bookkeeping?
When it comes to outsourcing your bookkeeping services, there are some risks that you will need to consider, such as:
- Hidden costs: Additional costs may be incurred if a task is more complex than it first seems.
- Less control: If you have questions about your finances, getting an answer might not be as easy as walking to a physical office and receiving a rundown of the financial reports. This means updates are not immediately available.
- A lack of familiarity with local regulations: If you outsource your bookkeeping services, the company in charge of performing this essential task may not be in the same country as you. This involves a degree of risk if the company you choose to work with is not conscientious about being up to date with financial regulations.
Though there are risks associated with outsourcing your bookkeeping, these can normally be mitigated by choosing the right provider and type of outsourcing setup for your business.
As your business grows, it becomes even more important to have accurate financial reporting to ensure you stay on the right track. The main problem is that once your business develops, there will be less and less time for you to do bookkeeping yourself.
In such circumstances, it is worthwhile to consider outsourcing your bookkeeping to a trusted third party. This way, you ensure your focus will still be on growing your business and managing your client relationships.
Whether you choose freelance bookkeepers, outsourced accounting and bookkeeping firms, or remote contractors, you’ll need to exercise due diligence to mitigate risks as much as possible.
At Near, we take risk mitigation very seriously. With a pool of 20k+ pre-vetted candidates, we can help you hire a top-tier professional in under 21 days while cutting your overhead costs by over 30% compared to hiring within the US. Book a free consultation with one of our hiring experts to learn more.