What to Expect When You Outsource Your Bookkeeping

Do You Need Basic Bookkeeping or a Full Charge Bookkeeper?

Perhaps the most difficult thing about considering outsourcing your bookkeeping is knowing what to expect. Where will your bills be sent? Who will send your invoices out? Who controls your QuickBooks file? All companies are different, and therefore all companies have different requirements and needs with respect to bookkeeping services.

The three levels of bookkeeping services described below serve as starting points to help you determine the level of bookkeeping services you require and what you can expect if you outsource your bookkeeping.

Very Basic Bookkeeping Services 
Basic, but Fully Outsourced Bookkeeping Services
Bookkeeping/Controller Services

We hope these descriptions will be useful when thinking about hiring a bookkeeper for your organization.

Very Basic Bookkeeping Services

One option is that you maintain your own books on a day-to-day basis and then send your records to a bookkeeper monthly to input into an accounting software program such as QuickBooks. At a minimum, your bookkeeper should do the following:

• Input Transactions: enter all your transactions into a computerized program such as QuickBooks on a monthly basis.
• Assign Items to Appropriate Accounts: assign all transactions to appropriate income and expense accounts.
• Reconciliation of Bank Statements: reconcile your bank statements on a timely basis.
• Financial Statements: provide monthly financial statements for your review.
• Assist with cost control: Based on experience working with many customers, a competent bookkeeper should let you know if you appear to be paying too much for specific items or services.
• Year End Reports for Your Accountant: provide your accountant with the information they need to quickly and inexpensively prepare your taxes.

Basic, but Fully Outsourced Bookkeeping Services

Another option is to send your bills, bank statements and the like to your bookkeeper weekly and have them process everything. If you do something like this, then your bookkeeper would probably do all of the above and:

• Accounts Payable: prepare your checks for signature and send them to you to sign and mail out.
• Accounts Receivable: invoice your customers and manage collections as necessary.
• Payroll: manage your payroll and maintain your payroll records.
• Assist with Cash Management: prepare collection letters for you to sign and send to your customers, and make sure your bills are paid on-time, but no earlier than necessary.
• Vendor and Customer Files: maintain vendor and customer files for all those you do business with.
• Online Access: provide you with online access to all your accounting information and reports.

Bookkeeping/Controller Services

If you need more than the above, then consider outsourcing your bookkeeping to a bookkeeper/controller. While it will take more time and cost you more money, a really competent bookkeeper should be able to assist with the following:

• Budgeting: work with you to accurately forecast future revenue and expenses.
• Custom-Designed Reports: prepare custom-designed reports that provide you with the information you need to manage your business better. Samples of some of the reports you might ask your bookkeeper to provide include:
  • Budget vs. Actual: a monthly budget vs. actual report so you can see how you are doing against your projections.
  • Customer Reports: reports to help you determine who your most and least profitable customers are.
  • Breakout of Expenses: It is often useful to break expenses out into different categories, such as by product line, office, or region.
  • Rolling Forecast: A rolling forecast allows you to see how your projections have changed over time.
  • Employee Reports: you ight want to consider asking your bookkeeper for employee-related reports, including reports showing company expenses and/or revenue associated with individual employees and year-end reports for employees detailing what their employment costs the company.
  • Event Analysis: reports tracking the revenue and expenses associated with specific events.
• Quarterly Budget reviews: consider meeting with your bookkeeper/controller quarterly to review the previous quarter, discuss changes to your budget for coming quarters, and analyze your business.