Many business owners are well-versed in the benefits outsourced bookkeeping, but they hesitate to pass accounting duties to an external firm or full-time in-house bookkeeper due to cost.
Outsourcing bookkeeping to a certified public accounting (CPA) firm is an expensive solution that limits access to real-time financial data.
Do-it-yourself accounting with bookkeeping software is more cost conscious, but according to a Small Business Report survey, 60% of small business owners feel they are not very knowledgeable about accounting and finance.
Luckily, a third outsourced option exists: managed accounting. Managed accounting offers more features and support than self-managed bookkeeping and it costs less than a full-time bookkeeper or CPA.
In this article, we outline the pros and cons of all three options:
If full-service outsourced bookkeeping is not financially viable, many small businesses opt to manage their own bookkeeping using software.
While self-management may have the lowest upfront fees, do-it-yourself bookkeeping comes with major opportunity costs.
In our blog 5 Hidden Costs of Doing Your Own Small Business Bookkeeping, we discussed some of these costs you may incur in addition to the software price:
In summary, saving a small amount of money in the short-term with self-managed bookkeeping may lead to missed long-term revenue and operational opportunities.
Businesses with financial means often outsource bookkeeping to a third-party partner like a CPA firm or accounting expert. Full-service outsourced bookkeeping can be a good option for those with more resources at their disposal or those with complex books to manage.
However, full-service outsourced bookkeeping is the most expensive bookkeeping solution. While exact cost can vary, most businesses pay between $500 to $5,000 per month, depending on the size of the company and scope of the engagement.
Outsourcing bookkeeping via managed accounting is an ideal solution for businesses seeking to save time, increase their revenue, and build companies with strong financial health.
The key advantages of outsourced managed accounting are cloud-based software; automation; and dedicated human accountants. NEWITY Managed Accounting, powered by KPMG Spark, fulfills traditional accounting functions while supporting your business’ accounting needs.
All three pillars result in major time and resource savings, freeing business owners and their employees from manual data entry, creating time for value-add activities.
KPMG Spark can also benefit rapidly growing companies with an in-house bookkeeper. KPMG Spark can work with bookkeepers directly, enabling the bookkeeper to focus on high-value financial activities that create better outcomes for your business.