In my last post, I outlined the various ways small business owners handle bookkeeping and the challenges associated with each option.
- A Do-It-Yourself business owner’s time is better spent on income-producing activities. Short on time and training, bookkeeping is back-burnered, not done well, and does not contribute to effective business management.
- An untrained spouse without adequate guidance has many of the same drawbacks as the DIY owner. The family relationship is stressed.
- Office managers or general administrative staffers by another title require a work style that is completely contrary to the needs of a bookkeeper. Office managers are multi-taskers who work in high traffic environments. Bookkeeping requires a quiet, private and secure environment to allow concentration on complex details and sensitive, often confidential, information.
- The typical part-time staff bookkeeper is quiet and non-assertive, and inclined to do the basic assigned tasks without an eye on the bigger picture or on generating reports useful for managing the business. Without trained supervision, the bookkeeper might or might not perform the function correctly. An hourly wage earner with part-time hours requires special circumstances and is not likely to be a long-term arrangement. Under this option bookkeeping will most likely never become an effective management tool.
So, what is a business owner to do? Outsource bookkeeping to a professional bookkeeping service. The title of this post says it is a new model. Actually, it is not really new. But it is new to many business owners who previously have only considered the four above-mentioned options.
A professional bookkeeping service is a specialty accounting practice that focuses on the daily accounting needs of business – daily sales entries from the POS Z strip, invoicing, bill paying, payroll, liability remittances, posting financial transactions, account reconciliation, WIP, job costing, inventory tracking, insurance audit reports, quarterly payroll tax returns, managing sales tax, and so on. It includes QuickBooks set-up, customization, and training of the other users. It also includes the analytical function of querying the data to help business owners make management decisions, such as financial statements and cash flow management. It includes planning functions such as budgeting and forecasting.
As extensive as it is, this is a partial list of what a business owner should expect from the accounting/bookkeeping function of the company. Business owners, their spouses and general administrative staffers typically do not have the capacity to take on these tasks fully and competently, nor does a part-time bookkeeper without professional supervision.
By working with a professional bookkeeping service – a specialty accounting practice – the business owner engages a partner in managing the financial operations of the business. Now, the owner, spouse or office manager has a professional to turn to. Instead of managing a function, they manage a relationship with an outsource professional. If the company does hire a part-time bookkeeper, the outsource professional can oversee the staff bookkeeper’s work.
Copy machine needs service? Call the copy machine service contractor. Need support on the computer network? Call the IT consultant. Need instructions on adding an employee to payroll or want to hand off the workers comp audit? Call a professional bookkeeping service – an outsource professional. If it is not new, it is still a model more business owners should get familiar with.