6 Reasons Why Outsourcing your Bookkeeping Can Increase your Profits
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6 Reasons Outsourcing your Books Increases your Profits
Most business owners think it’s more profitable to do everything themselves rather than outsourcing. Why spend money when you can do it yourself, right?
However, spending money can improve your bottom line by improving productivity, reducing stress, and making it easier to focus on growing your business. Outsourcing your books is one of the best ways to make the most of your profits.
Depreciation is a common deduction, but it’s not the same across the board. Recording inaccurate depreciation can affect your taxes and your ability to secure financing or attract new investors.
An outsourced bookkeeper can ensure you depreciate your equipment and other assets appropriately, avoiding penalties and reducing the risk of not getting what your business needs.
Reducing your Expenses
Having a third-party look at your books can be eye-opening. They can catch things you don’t, like significant (unnecessary) expenses. When expenses increase suddenly, or there are repeated unnecessary costs, an outsourced company can catch them because that’s their job. When you do your own books, you’re focused on getting the job done fast and may not pay as much attention to detail.
Doing your own books takes a lot of time, which is an opportunity cost to other things, like running your business. Think of it as an hourly wage. Every hour you spend doing the books costs your company money.
Not only does it cost the money you actually pay yourself, but it also costs the value of other tasks you can’t do because you’re doing the books. The opportunity cost is usually much higher than the cost of outsourcing your books.
The cost of goods often increases, especially today, due to high inflation. While you might just roll with the punches, you’re decreasing your profits. When the cost of goods increases, you should consider your own prices and decide how much to increase them.
When you outsource your books, this might be brought up so that you make the right choices. On the other hand, if you do the books yourself, you might overlook the changes and just rush to get the books done.
Keeping your books organized makes the end of the year less stressful and less expensive. Tax time will be much easier when you’re organized and have all the necessary documents to complete your taxes.
Outsourcing your books might seem unnecessary, but it can save you money and stress when you look closer. You’ll be more focused on running your business and be more keenly aware of what your business needs financially to be successful.