Outsourcing Bookkeeping has grown rapidly in the last few years, mainly due to improving technology and small businesses focusing more on cost control. We’ll discuss the risks and benefits of outsourcing your accounting.
Not everybody agrees on the benefits of outsourcing bookkeeping or is comfortable with the potential risks. The occasional nightmare stories about unscrupulous accounting firms that want to grow their client lists at any cost have cast a shadow on the industry in years gone by. If you can sidestep that landmine, outsourcing to a digital corporate services firm can save you time and money, and give you a better-than-ever understanding of your business.
Confidentiality & Integrity
Your business’ accounts are something that should be kept confidential, and only be accessible to a very limited number of people. Outsourcing your bookkeeping increases the risk of the information being seen by the wrong people, but selecting accountants with a focus on and track record of confidentiality will mitigate that risk.
Yes, finding skilled and committed accountants who will keep your books confidential can be challenging. That’s why outsourcing to a digital corporate services firm that has a stable and happy client base of businesses like yours is a no-brainer for many entrepreneurs. A quick way to understand whether a digital corporate services firm takes confidentiality seriously is to ask them for an introduction to an existing client or three.
New businesses often start out with fairly modest needs around bookkeeping. Once they start to scale, though, their needs can grow rapidly, and using an outsourced bookkeeping service gives them on-demand access to a full range of corporate services without having to hire or train new staff.
Training and Management
Very few entrepreneurs start businesses because they love accounting, and practically none embark on the entrepreneur’s roller-coaster to train and manage bookkeepers. For one thing, most entrepreneurs aren’t bookkeepers or accountants, and they couldn’t train a bookkeeper even if they wanted to. Hiring a digital corporate services firm to handle expenses, bills, bank reconciliations, and all the smaller bookkeeping tasks means that you don’t need to worry about training or managing your bookkeeper.
Make the best use of your time
When a business cost-effectively tries to save money by doing its own bookkeeping or entrusting it to a key employee, it creates a distraction, missing an opportunity to focus on reaching product-market fit before it runs out of capital or investors lose hope in the management team. To quote Sam Altman, president at early-stage investor Y Combinator: “We like to say that startup companies always die of suicide, not murder.”
One way to avoid early-stage suicide is to use a digital corporate services company. Freeing up the time you would have spent maintaining your accounts ledger to double down on building the foundation for a sustainable company is a sound business decision. More and more successful startups are taking this route.
Related Reference: 7 Ways Outsourced CFO Services can Give your Startup an Advantage
Tax and Audit-Ready Accounts
Using an outsourced bookkeeping service can feel like an extravagance at times. But not when tax season rolls around, as it does every year. (The only two things you can rely on are death and taxes, etc.) Having accounts that keep tax inspectors, bankers, investors, and auditors happy is another key reason to entrust your accounts to a digital corporate services firm.
So there’s plenty of reasons to outsource your bookkeeping to a digital corporate services firm. But it’s not for everybody. To find out whether it’s for you, ask yourself the following questions:
- Do you use online banking?
- Do you want to submit your expenses and bills with ease with your smartphone on the go
- Do you want to access your accounts securely on the go?
- Do you prefer chatting online or on the phone immediately, rather than waiting for an in-person meeting?
- Are you happier with a flat monthly rate versus uncapped hourly billing?
Answer no to any of these questions and digital corporate services (and Lanturn) might not be for you. However, if you’ve answered yes to any or all five questions and would like to know more about how Lanturn offers a comprehensive range of accounting and bookkeeping services in Singapore to early-stage startups, small companies, and asset management firms.
Contact us to schedule a call with our client success team.