As an engineer, there is no doubt that you are good with numbers. Mathematics and complex equations are all part of your job. However, this fact doesn't necessarily mean that you are the best person to be handling your engineering firm's bookkeeping. You have more than enough work to keep you busy managing multiple different projects, dealing with your clients, and looking at ways to grow your business; the last thing you need to worry about is the day-to-day hassle of tracking all of your financial data.
Outsourcing your firm's bookkeeping tasks is an excellent way to save you valuable time and money. Plus, it can provide you with numerous other benefits as well. Here are 7 reasons to outsource your engineering firm's bookkeeping.
1. Access to a reliable bookkeeper throughout the year
When you outsource your bookkeeping, your outsourced bookkeepers will work diligently to keep your books updated throughout the year. They will provide a monthly formal closing of your firm's books along with all applicable reporting and will help you stay current with any sales tax obligations.
Plus, when tax season comes, your books will be up to date and ready in advance, allowing your accountant to identify tax deductions for your business quickly.
If you want to get a bank loan or sell your business, you must have access to reliable and accurate financial data. Investors or your banker will need to see your books to secure the financing you require.
2. Visibility on cash flow and profitability
Professional bookkeepers and accountants have years of experience in the field, and outsourcing to them will help you handle all of your data and keep your records accurately.
Your outsourced bookkeeper can manage your accounts payable and receivables, balance sheets, financial statements, reporting, and cash balance tracking every month, giving you good visibility on your firm's cash flow. They can also run custom reports to track the profitability of each project you are involved in and provide you with information on the overall growth of your business.
3. Proper financial planning
Far too many companies only visit their accountants once a year to get their bookkeeping and taxes done. This may seem like all that is necessary, but if you don't have access to accurate and current financial data, how can you make any truly appropriate financial decisions?
Staying up to date with your bookkeeping throughout the year means that you will be able to do proper financial planning. Your bookkeeper can help you monitor things like cash flow fluctuations, invoicing and billing, project costing, and other financial records that can occur with regular work cycles and can update you on any changes.
Some outsourced bookkeeping firms also provide controllership services which give you direct access to the financial leadership you need for proper financial planning. This can go a long way in helping you with forecasting, budgeting, audit preparations, and much more.
4. Access to experts that know accounting software and tools to streamline your bookkeeping process
When you choose to outsource to a professional to look after your bookkeeping, you are gaining the valuable assistance of someone who has a detailed knowledge of all the latest accounting software and tools. They can help you determine which of these will best help your engineering firm and will help you stay current as technology advances.
Managing an engineering firm involves dealing with new clients regularly, maintaining lucrative contracts, paying vendors, managing project costs, and tracking time. Many tools on the market can help your firm automate these tasks, and an outsourced bookkeeping firm will be well-versed in using all of these tools.
QuickBooks Online is an excellent program to use for invoicing and day-to-day bookkeeping. Plooto is great to use for vendor payments, and Dext Prepare can help with expense management, to name just a few.
By using an outsourced bookkeeper, you can leverage their expertise and rely on them to help you pick the best tools for your business.
5. Time efficiency
Your time is extremely valuable. You have projects on the go and clients that demand your undivided attention. Outsourcing your bookkeeping can help you save time and allow you to focus on more important things.
Bookkeeping is a time-consuming activity, and it can take up a lot of your time, especially if you don't have a dedicated employee working on it. Outsourcing to a professional and having them take care of your finances will relieve a massive time burden, letting you focus on getting new clients and work on key projects instead of worrying about the accuracy of your books.
When your firm is still small, you or your controller might be able to handle late payments and day-to-day bookkeeping on your own. However, as your company grows, you'll have more invoices and payments that need to be followed upon.
When utilizing an outsourced bookkeeper, you can customize the types of accounting tasks that you require to meet your business's needs. They are better equipped to scale with your company in terms of transaction volumes as they have more staff on hand to carry your workload.
7. Saves you money
Outsourcing your bookkeeping is much cheaper than hiring an in-house bookkeeper. You get the benefits of having someone personally take care of your firm's finances without having to pay for training, vacation time, and other benefits. Plus, you don't have to pay any payroll deductions like CPP and EI.
Outsourcing is an excellent way to save your engineering firm a significant amount of time and money. On top of these benefits, it allows you to access accurate and current reporting from an experienced professional.