Why Outsource Your Bookkeeping?

Posted by The Bean Team on 11/14/17 9:43 AM

Bean Blog.png

It’s not a secret that as a financial advisor, you are incredibly busy. Running a business is time consuming in itself, and that’s before you add up all of the hours you spend meeting new prospects and helping to guide the financial decisions of your current clients. When you’re a single-person shop or a small team, sometimes it can feel like the task list you have is impossible to accomplish. Things start to get put on the back burner. One of those “back burner” tasks is bookkeeping.

This is a concept that may make you cringe - probably because it hits close to home. As an advisor, you should be well organized when it comes to your own financial records, right? Oftentimes that’s just not the case. There aren’t enough hours in the day! You probably haven’t even thought about outsourcing your bookkeeping. Maybe because it feels like something that should come easily to you, or you feel obligated to handle it yourself because it falls under the “financial” umbrella.

Although it may seem ironic that someone who specializes in finances would need to hire a bookkeeper, it boils down to one deciding factor: where is your time best spent? Probably not digging through your shoebox of receipts in an attempt to get organized.

If you’re considering whether or not hiring a bookkeeping service is the best decision for your growing financial planning firm, here are a few questions to ask yourself:

What is my time worth?

The concept of trading time for money is quickly becoming antiquated. As a business owner, this is an especially important concept as you grow and scale your planning practice. If you are efficient when you’re doing client work and meeting with new prospects, you’ll ultimately be able to take on more clients and make more money. However, if you focus on the day-to-day business tasks that take you more time and sap your energy, you’ll have less left over to serve your existing clients and even less after that to prospect for new business.

That’s why finding ways to outsource some aspects of your business helps you better define what your time is worth - and where your time is best spent. Your time is better spent meeting with new clients rather than entering your expenses. When you focus your energy on the revenue-generating aspects of your business, you’re going to earn more. This pays for any services you may be outsourcing, and it helps you free up time to generate even more revenue or provide a better service. The key is picking the tasks to outsource that will provide you the best return on investment.

Outsourcing your bookkeeping, in particular, is an excellent example. You’ll be outsourcing an aspect of your business that requires a fair chunk of time to stay organized and on track. But if you outsource it to a professional, you’re likely to have a bookkeeping process that’s much more organized than what you’ve put together - all without having to invest any extra time or energy into the project.

How good am I at keeping up with my expenses?

This is a frank conversation that every financial advisor needs to have with him or herself at some point. Are you diligent enough to keep and capture receipts? No, this doesn’t mean collecting them all in a shoebox for filing later (like we mentioned earlier). Having a clear cut system in place for capturing expenses and monitoring your business’s profit and loss is often lost in the sea of “to-do’s” as an advisor. As much as you may want to be organized enough to do it all yourself, it’s realistic to expect that some things will slip through the cracks as you grow.

It’s incredibly important to be honest with yourself when taking stock of your current bookkeeping situation. There’s no sense in patching holes in a sinking ship. Do you have the time to maintain your books accurately? Will you have time in the future? If the answer is “no” - you shouldn’t feel ashamed. Being a business owner is a busy thing - it’s okay to fall back on a team of bookkeepers to outsource this one small (but incredibly important) aspect of your business.

Am I adequately organized to file taxes?

Taxes play a large role in your financial planning business. But while you’re helping clients prepare for their tax season - are you taking the time to get ready for your own? Tax season as a business owner can give you a headache. More importantly, if you haven’t been dutifully monitoring expenses, filing receipts, and keeping track of your business finances all year - it’s incredibly time consuming.

The time spent to organize yourself at the start of the new year may not be worth it - especially if you have clients coming to you in similar tax-related binds who need your help organizing their finances. Additionally, you may be mislabeling tax deductions (or taking deductions where you shouldn’t be). As a business owner, it’s tempting to write anything and everything off.

Unfortunately, this isn’t exactly how it works in the real world. The last thing you’d want is to get dinged for a write-off that your friend told you was “totally possible” for a business owner when, in fact, it wasn’t. On the flip-side, the last thing you’d want is to lose out on tax deduction money because you missed filing an expense! In short, if you’re still scrambling to get together your paperwork on April 14th, or if you feel constantly perplexed by different deductions, you need to think about outsourcing.

Do my books reflect where I’m at and where I’m going in my business?

Yes, having neatly organized books helps your state compliance professional look at your business and see your various expenses on your tax return. But having well-organized books gives you something more: an idea of where you are and where you’re going. It helps you to take unemotional stock of your business and to see the areas where you need improvement.

When you are the only one working in and on your business, it can feel as though everything is either:

  1. Terrible.
  2. Wonderful.

It usually doesn’t feel like there’s a whole ton of middle ground when you’re looking at it by yourself. As a business owner,  you work in an echo chamber. All of your biggest celebrations and setbacks seem to be magnified under your own (often unfairly) ruthless self-evaluation.  Having a bookkeeping service help you manage the dollars and cents of your business gives you the perfect way to look at things impartially. There’s no arguing with hard numbers. Having someone else organize them for you takes the emotion out of the equation and empowers you to do what you do best: grow and run your business.

How aware of my business spending am I?

Speaking of the emotional side of business - just how aware of your business spending are you? It’s not easy being a financial advisor. It feels like every day there is a new product, service, or software that pops up specifically addressing your needs. Everything is marketed as the silver bullet that’s going to make you rich and famous. It all feels very glamorous and the next thing you know, you’ve been sucked into way overspending on software, tools, and services you don’t need or flat-out can’t afford. A bookkeeping service can help you to highlight those areas where you’re spending too much, or where you could afford to spend more to free up some time to work on gaining new clients. It can help you figure out when you’re ready to start paying yourself - and everybody wants that in their professional lives!

Is the expense of outsourcing my bookkeeping worth the value it brings to my business?

You may be worried about the cost of outsourcing your accounting to a bookkeeping service. We’re here to tell you: it’s much more affordable than you’re probably imagining. Some of our FA Bean Counters packages start at $97/month, to give you a reference point. More importantly, it pays for itself when your bookkeeper finds tax deductions you’ve been missing, identifies areas where you’re overspending, and more.

Of all the things that you can outsource in your business, bookkeeping is absolutely one of the tasks that can be offloaded for a reasonable fee. It’s also one of the tasks that, when you do outsource it, you’ll never look back.

Good books are not just a good idea.

As a financial advisor, your business and finances are an example of how things should be done by your clients. Having well kept records is part of the bigger picture. When you embrace the idea that your energy should be spent on the revenue-generating and client-facing side of your business so that you can continue to grow, you start to see that outsourcing some of the tasks you’ve been dragging your feet to get done isn’t a bad idea. In fact, it can give you the room you need to thrive in your practice!

Click here to contact the Bean Team! 

Tags: financial advisors, Financial Planning Firm, Financial Planning, bookkeeping, Outsource, Outsourcing, FA Bean Counters

Subscribe to Email Updates


Popular Posts