Not thinking of outsourcing your bookkeeping? As a business owner, there are many things that take up your time throughout the day. You handle your employees, monitor marketing plans, manage social media accounts, attend meetings, and many other things.
While you might think that managing the accounting aspects of your company is one of the easiest tasks, you are wrong! Sometimes life forces you to use spreadsheets and you barely notice how much time you lose keeping track of income and expenses in an old spreadsheet, or even worse, with pen and paper.
What are Spreadsheets?
“When you start to EXCEL. People start to SPREADSHEET.”
— Keneilwe Mosupye, Twitter
Spreadsheets are used to store and manage data in the cells which are represented in the form of rows and columns. The data is stored as a record in the spreadsheet and can be manipulated. Microsoft Excel is one of the software programs that helps you make a spreadsheet. If your business keeps growing, you’ll eventually need to move on from spreadsheets.
Apart from Ms Excel, the following are other examples of spreadsheet programs, and if you happen to be hooked on any of them for your bookkeeping, it’s time to consider outsourcing.
- Google Sheets (online and free).
- LibreOffice Calc (free).
- OpenOffice Calc (free).
- iWork Numbers Apple Office Suite.
- Lotus Symphony.
Why Should You Dump Spreadsheets?
Today, companies have moved from paper & pencil and spreadsheets accounting to outsourced accounting services. In a developed market like Singapore, it has become a trend. The outsourcing approach to managing the financial data of your business is cost-effective, light on resources, and helps you to stop worrying about service gaps. While using spreadsheets is adaptable, there’s only so much you can do with it in a bookkeeping context.
“Excel suffers from an image problem. Most people assume that spreadsheet programs such as Excel are intended for accountants, analysts, financiers, scientists, mathematicians, and other geeky types. Creating a spreadsheet, sorting data, using functions, and making charts seems daunting, and best left to the nerds.” ― Ian Lamont, Excel Basics In 30 Minutes
The following table summarizes what you can do and what you can’t accomplish using spreadsheets.
|Bookkeeping Tasks Suitable With Spreadsheets||Bookkeeping Tasks Unsuitable With Spreadsheets|
|Set up a single-entry bookkeeping system, which you update manually||Automatically import transactions from your bank accounts to your books|
|Perform basic calculations to create financial statements||Have your transactions automatically categorized for you|
|Track invoices you’ve sent to clients||Identify and rectify human errors|
|Save business records on your hard drive, or in the cloud with Excel Online or Google Sheets||Get answers to questions about your finances|
Spreadsheets are becoming old-fashioned DIY bookkeeping. Using them forces you to have intimate knowledge of tax details, and have instant and detailed knowledge of the inner workings of every part of your company. You don’t have to stress yourself with such intricacies, instead, outsource your bookkeeping to an expert team. You know what that means? Accurate, up-to-date books, a stress-free tax filing and more time to focus on building your business.
Dump those tedious spreadsheets and outsource your bookkeeping to Tianlong Services and you’ll never regret it. Request a free trial today. Think of us as a clean-up team that ensures all your business accounts remain in good health. If you choose our specialists, your business has the potential to improve significantly.
What are the Signs You are Outgrowing Bookkeeping in Spreadsheets?
Singapore is known to have modern companies relying on advanced technologies to catalog their tasks. We do not want our non-core tasks to encroach on the resources necessary for the core tasks which are important for maintaining our competitive edge. Thus, outsourcing the bookkeeping function is becoming popular in Singapore in this day and age.
As a business owner in Singapore, you will enjoy the peace of mind when they outsource these services as you will not only satisfy the requirements from IRAS and ACRA, but also provide timely and accurate financial information to your stakeholders. What are you waiting for?
The following are signs you are ready to outsource to a bookkeeper:
- Entering and sorting your financial transactions manually consumes too much of your time. This mostly happens when your monthly transactions significantly increase.
- You experienced a phishing or malware attack and lost some vital business records.
- You need complex financial statements, such as the Profit and Loss, Balance Sheet or Cash Flow Statement
- You start working with an accountant, and they need access to professionally kept books.
- You experienced a messy tax season, and you must be more prepared next year.
- You decide to upgrade to double-entry bookkeeping.
- You have bookkeeping questions that can’t be answered by searching online.
What are the Benefits of Outsourcing Your Bookkeeping Process?
Bookkeeping is much like visiting the dentist, as you know that no one really wants to take the time out to do it but avoiding the issue can result in costly consequences. When this occurs, the main thing that suffers is the performance of your business resulting from poor financial health and stagnated growth. Furthermore, you can encounter disasters that blindsides you out of nowhere, and that’s when you realize you had the chance to save the day sometime back.
Bookkeeping problems are always under your nose, but most business owners are usually caught off-guard because they were just too busy trying to do everyone else’s job. As such, simply hire someone to take care of the bookkeeping process and instead focus on how much money is coming into your business. Outsourced bookkeepers can be beneficial, which makes it an attractive employment option for you as a business owner.
Below are the benefits you can expect from outsourcing your bookkeeping:
1. Increased Focus and Efficiency
Outsourcing your bookkeeping process is recommended for your businesses because it helps you increase your efficiency and focus on core areas of your company’s operations. Your main priority as a business owner needs to be on the growth of your business. It is hard to focus on money-generating activities while trying to manage your money at the same time. Outsourcing your business’s bookkeeping operations frees up valuable time that can be put into bettering your company.
Without the distraction of bookkeeping, you can focus on the actions that will help you achieve your business growth objectives. If it doesn’t directly impact your overall goal you shouldn’t be wasting your valuable time on it. When a bookkeeper is handling your finances, you are afforded the ability to look at the bigger picture of your business. All of these time-wasters and distractions need to go – out of sight, out of mind.
2. Outsourced Bookkeeping Cuts Costs
Let’s say you decide to employ two or three people to handle your bookkeeping, while a rival company outsources the same process to external contractors. Who will save money in the long run? The answer is obvious: you will lose more money, whether you pay the employees on hourly, daily, weekly, monthly rates. As stated by the authors of “Small Business, Big Vision,” regular employees cost approximately 1.5 times their hourly wage, while contractors don’t have extra expenses.
The bottom line is that standard employees cost more to employ than outsourced contractors. Therefore, outsourcing your bookkeeping operations cuts payroll costs significantly. You also save on lost productivity costs that come along with hiring employees. Many business owners avoid outsourcing their bookkeeping because they believe they are saving money by doing it themselves. By outsourcing your bookkeeping, you only pay for what you need – nothing more, nothing less.
3. Guaranteed Accuracy from Professional Accountants
Due to all the moving parts within your business, finances can be very complex. While you may feel more comfortable giving a familiar individual to handle your financial books, you are putting your business at risk of accurately monitoring your income and expenditures, which requires the right training, proven processes and procedures. When you choose to outsource your bookkeeping, you are guaranteed that your financial records are in the hands of the professional accountants who are dedicated to produce accurate reports. We at Tianlong Services work around the clock to ensure every dollar is accounted for as you focus on the smooth running of your business.
Top professional bookkeeping service firms have a proven track record of developing processes and procedures for all types of business. They customize these procedures for your business in accordance with your specific needs. With high expertise and robust knowledge of multiple software systems, you should expect consistent and accurate results. Accurate bookkeeping records should be a top priority, and you can avoid errors, such as:
- Accidentally recording transactions in a prior period;
- Failing to schedule backups;
- Forgetting to record an expense or transaction;
- Incorrect balance in revenue or expense balance;
- Misclassifying expenses;
- Not saving receipts;
- Not training staff; and
- Recording transactions from a prior period.
By putting your books into the hands of a highly skilled staff who understand the best practices and how to properly staff for certain tasks, your job becomes a whole lot easier and effective. Contact us for a free trial today.
4. Business Growth
Outsourced bookkeeping is essential to business success. As a business owner, your focus is to ensure your business is performing well and consistently growing. Outsourcing your bookkeeping will free up your valuable time to focus on your business growth strategies. In addition, outsourced bookkeeping will place you in a prime position to achieve your business objectives effectively. Whether you’re aiming to cut down on spending or having a reliable team working on your behalf, you will have ample time to try out different plans and options to help you achieve such goals.
As an entrepreneur, you are not a superhero. You must hire employees who can help you build your business. Without having people around you to help in understanding the cost of sales and fixed costs of your business, you cannot measure the profitability of your business accurately. This starts with good bookkeeping. The widespread availability of cloud technology has made it easier to outsource bookkeeping tasks and the benefits are crystal clear. You can focus on attracting and selling to new customers so you can reach your growth targets.
5. Access to Up-to-date Bookkeeping Systems
Outsourcing your bookkeeping operations is a great opportunity to ensure your financial records are summarised, interpreted, sorted, and analysed using top tools in the industry. If you cannot afford to pay for the exceedingly expensive bookkeeping programs or spend your precious hours keeping up with changing laws and regulations, just outsource! By outsourcing, you’re essentially purchasing the tools and the relevant knowledge by proxy, while you don’t have to toil doing any of the donkeywork!
In addition, these top systems are constantly updated to ensure all clients’ data have backups and organized for future reference. This ensures that you’ll be more than prepared when the IRAS or ACRA ever does come knocking for an audit. With the ability to access the bookkeeping data of your business remotely, you can also manage your financial records ‘beyond the office.’ Therefore, strive to work with a bookkeeping firm that can provide services on-site and virtually allows you to be mobile whenever you need or want to be, and allows you to quickly access information from any location.
What are the Available Options for Outsourcing Your Bookkeeping?
Now that you’ve decided to dump DIY bookkeeping using spreadsheets, and mow you are focused on outsourcing such operations to a pro. But, there’s one key question you must answer before you take the leap of faith: Who’s going to do all that bookkeeping for you?
It is important to pinpoint the most viable option that resonates with your business goals. While there are two main options, the third option can also work for you in case you want to monitor your books under your nose or within the vicinity of your business premises. They include:
- Option 1: Hire A Local Bookkeepers
- Option 2: Hire A “Virtual” Bookkeeper
- Option 3: Hire an In-house Bookkeeper
You should be aware that outsourcing your bookkeeping is a big jump from DIY bookkeeping, especially when it comes to effectiveness and pricing.
Below are the benefits and drawbacks of each, so you can decide which one is right for you.
Option 1: Hiring a Local Bookkeeper
A local bookkeeper is a person or bookkeeping team based near your business. Most business owners consider hiring a local bookkeeper because they believe their close proximity means that they will have their best interest at the heart of their thriving community. Through your locally-based marketplace, you’ll can easily locate a pro in your area so you can meet in-person to accomplish your bookkeeping goals while you focus carrying out other aspects of your business.
You should go for a local bookkeeper if:
- You value meeting your bookkeeper in person and frequently
- You have faith in assessing physical records to run your business since you rarely use online banking or payment systems.
How Does Local Bookkeeping Work?
Usually, if you opt for a local bookkeeper, you can reach out to two types of professionals:
- A Freelance Bookkeeper
A freelance bookkeeper works with you on a one-on-one basis to get your books done. Freelance bookkeepers have varying levels of skill and experience. Generally, they are recruited by small businesses that cannot afford in-house salaried accountants. With the rapid advancement of cloud-based technologies, they can also deliver high-end services at unbeatable costs from the comfort of their homes/offices.
- A Firm specializing in Bookkeeping
Generally, the fees for hiring a bookkeeping firm is usually higher than that of a freelance bookkeeper. However, the advantage is that they can offer you some unsurpassed “assurances” compared to freelance solo bookkeepers. For example, you will be rest assured that their bookkeepers are professionally certified. In addition, they will provide you with a dedicated bookkeeper to handle your financial books, and in case they are on leave, you will be contacted with another bookkeeper to take over the process. Therefore, you will hardly experience service gaps.
- The freelance bookkeeper and the firm will operate outside of your business because they are not referred to as a contractor or an employee. Try to find one that offers you affordable, secure, and instant access to your financial records.
- Security is also important so ensure you thoroughly scrutinize the individual or firm you want to hire before trusting them to manage the financial information of your business.
- Never give a bookkeeper control of your treasury functions: when it comes to handling investments, signing checks, or making online payments or wire transfers, you should be the sole signing authority.
Option 2: Hiring a “Virtual” Bookkeeper
Virtual bookkeeping just means someone else doing your books for you, online. It is a popular, paperless method of handling your books, which allows a bookkeeper to provide accounting services for you remotely using a cloud accounting software that helps both of you to access your accounts simultaneously.
Virtual bookkeepers combine the best parts of bookkeeping software and traditional bookkeeping to provide bookkeeping services at affordable rates. When looking for a virtual bookkeeper, ensure they are transparent about pricing and deliverables, and that they have a detailed process for how they work with their clients.
You should go for a virtual bookkeeper if:
- You use online banking and are comfortable on the web
- You want an online access to your financials via a mobile app
- You prefer chatting online or on the phone, rather than in-person
- You prefer a flat monthly rate to hourly billing
Hiring a virtual bookkeeper to do handle your books online will give you peace of mind and save you time. The biggest benefit is that you can store your data securely in the cloud, and access your financial info anytime and from anywhere.
How Does Virtual Bookkeeping Work?
You need to connect your business with a secure, online account to carry out virtual bookkeeping smoothly. The cloud accounting software you choose allows you to carry out data entry automatically as well as making payroll much easier by facilitating daily bank reconciliations.
Generally, the best cloud accounting software for freelancers perform the following:
- Accepting online payments;
- Tracking expenses;
- Multiple user access;
- Tracking projects;
- Uploading receipts;
- Time tracking, etc.
When it’s time to file your tax returns, most virtual bookkeeping software will offer you a year-end financial package, which consolidates all financial statements for filing your tax return.
For instance, when you sign up with Tianlong Services, our team of professional bookkeepers will gather your data and turn it into tax-ready financial statements each month. At the end of the year, you can use our cloud-based solutions to you track your finances, download financial statements, and message your bookkeeping team.
Option 3: Hiring an In-house Bookkeeper
Many business owners rely on in-house bookkeeping to handle their financial books each month because it’s what they’re used to. Furthermore, when your business grows too big for the above-mentioned solutions, probably hiring in-house bookkeepers and creating a separate department for them will work for you.
It’s up to you to decide whether you can afford an in-house bookkeeper for your business. The average annual salary for an in-house bookkeeper, as stated by Payscale.com, is SGD$48,960 before incorporating payroll taxes and employee benefits.
If you need in-house support but can’t afford to hire a bookkeeper full-time, consider hiring one part-time, and increasing their hours as needed. Some businesses also bring in a part-time bookkeeper, but assign them extra administrative tasks in order to create one full-time position.
Ask yourself, the following questions before hiring an in-house bookkeeper:
- Can you provide attractive compensation that will bring in and keep an above average bookkeeper?
- Do you have a contingency/backup plan in the case that they leave, are sick for an extended period of time, or you need to let them go?
- Does hiring an in-house bookkeeper bring you additional value that you couldn’t gain even if another virtual or outsourced option is more affordable?
In summary, the below table recapitulates the above three options when outsourcing your business bookkeeping and the things you need to consider.
|Bookkeeping solution||Best Suited if…||Benefits|
|Local Bookkeeper||1. Your business has less than SGD$100 million in revenue|
2. You depend on physical records to run your business and want to physically meet your bookkeeper
3. You’re prepared to cover bills that may vary month to month (due to hourly billing)
|1. Local bookkeepers work well with paper-based recordkeeping|
2. Freelancers may be flexible with how they work (visiting your office or communicating online)
|Virtual Bookkeeper||1. Your business has less than SGD$100 million in revenue|
2. You use online banking
3. You prefer to pay a flat monthly fee to an hourly bill
4. You want instant access to your financials on the go
|1. Allows you to run a paperless office|
2. Instant online communication
3. You get human bookkeepers, and software to monitor your finances
4. You get a team who handles your books, and no service delays if your bookkeeper is sick or on leave.
|In-house Bookkeeper||1. You need someone on-site to distribute frequent petty cash disbursement||1. An efficient way to do the books for a larger business|
2. The bookkeeper answers directly to you
What are the risks with outsourcing your bookkeeping?
It is better to note that outsourcing of accounting services may not be coined as “risky” unless the job is outsourced offshore. As long as you have the accounting service providers under your radar, you can consider it safe.
Rest assured that the cloud is much safer than a local hard drive. In the event of theft or a natural disaster, your data is automatically backed up in the cloud.
What non-financial information do you provide to the bookkeeper?
Bookkeepers usually tailor this response a little for everyone to provide you only with relevant information! Generally, they will highlight any relevant information on a monthly basis.
If you are in love with numbers, they will give you the numbers. If you don’t understand the numbers, they’ll take the time to educate you on what it means.
Are you now ready to outsource your bookkeeping operations?
Friends don’t let friends do their own bookkeeping. Tianlong Services is a one of the best-known corporate firms in Singapore specializing in accounting and bookkeeping services. Our team of experienced and friendly bookkeepers have the knack to help you tailor different types of accounting services to suit your business needs at the lowest cost possible.
Whichever bookkeeping solution you choose, we deliver accurate financial statements, tax-ready books, and a secure way to store and access your business’s financial records and data.
Contact us for exclusive accounting and bookkeeping services to help you custom-build your plan around your business needs.