Last Updated on November 25, 2022 by Tayyaba Khan
Many business owners have reservations when it comes to hiring bookkeeping services. While accounting and bookkeeping services are among the most outsourced business functions globally, we have seen that many businesses are reluctant to employ outsourced accounting and bookkeeping. There are various reasons for this dreaded reaction. One of the many reasons is the myth that surrounds these services.
Today, we will talk about some prevalent myths surrounding bookkeeping and help you bust those myths for you.
Table of Contents
Myth: It is just data entry!
Reality: While data entry is one of the most considerable parts of work provided as a bookkeeping service, the bookkeeping task entails a lot more than just data entry. Every organisation has different bookkeeping needs, so the services provided as part of bookkeeping services will differ from one business to another. A few essential tasks that are part of bookkeeping services that you can avail of are accounts reconciliation accounts payable & receivable management, payroll, budgeting & forecasting, and many more similar tasks. So, No! Bookkeeping is not just data entry.
Myth: Accounting software can replace bookkeepers!
Reality: With the advancement of technologies, we have access to various accounting software with multiple features that can make your bookkeeping process easier and faster. However, to say that accounting software can replace your bookkeeper is a bit of an overstatement. The software cannot operate on its own. While there are features like automatic bank feed and similar automation processes, you will always need a bookkeeper. They can help you classify all that is coming automatically, provide you with much-needed advisory services, and set up systems in place such that automation is making things easy and not the other way round.
Myth: I can do it all myself
Reality: Another widespread myth amongst business owners is that they can do it all independently, be it marketing, sales or bookkeeping, and so they do not need to hire bookkeeping services. Many business owners even feel that this will help them save costs. This is a plain myth and holds no reality. You might ask, why? Because bookkeeping is an intricate and time-consuming process. If you are a serious business owner who wants to grow your business, you cannot use your time in recording business transactions, accounts reconciliation, accounts payable, accounts receivable, and other bookkeeping tasks. Doing so will keep you from focusing on your clients and ultimately growing your business.
Myth: Bookkeepers are expensive
Reality: This is one of the reasons why most business owners choose the DIY route. However, if you do not have the right expertise and knowledge to conduct the bookkeeping process on your own, you might incur more costs than actually hiring bookkeeping services. You can hire a full-time or part-time bookkeeper who comes with its set of pros and cons. But if the money factor bothers you the most, outsourcing your bookkeeping activities to a reputed bookkeeping services provider might be just what you need.
Myth: Bookkeepers are math genius
Reality: Considering the time bookkeepers spend balancing books and tracking down financial transactions, most people assume that bookkeepers are great at math. This might not always be true. Bookkeepers necessarily do not have to be math geniuses. A simple requisite for being a bookkeeper is that they need to be good at managing business financial transactions accurately.
Myth: Business owners lose control to third parties when they outsource bookkeeping services
Reality: Handling your financial information to an unknown entity might be a daunting task. However, this fact remains the same in the case of in-house bookkeepers, especially discontent employees. But when you are outsourcing, it is different. Outsourced bookkeeping service providers build their reputations on trust and security. Also, to ease business owners’ minds, these providers sign non-disclosure agreements and similar contracts, which could lead to serious litigation issues if the contract is broken.
Myth: Accountants are better than bookkeepers
Reality: Accountants and bookkeepers are both personnel of great value to an organisation. To say that accountants are better than bookkeepers or vice versa will be a huge mistake. Both accountants and bookkeepers are different professionals. A bookkeeper records all business’s financial transactions while the accountant analyses and audits these data. While we can say that accountants are a step above bookkeepers in terms of the job description, but they can not perform their tasks without a bookkeeper.
Myth: Bookkeepers are only needed during tax time
Reality: If you are one of those who believe in this myth, then you are surely inviting trouble! The bookkeeping process involves voluminous data. Trying to record and organise a year’s worth of financial data with a quick turnaround will only result in errors in the process and delayed tax filing. If you want to enhance your tax filing, never, we repeat, never wait till the last moment to conduct your bookkeeping process all in one go just before tax season.
Myth: Only big businesses need a bookkeeper
Reality: Bookkeeping is vital for every business, irrespective of its size. Every business, be it small, medium, or large, needs bookkeepers to take care of their financial data. While the complexities faced by bookkeepers will increase with the size of the business, bookkeeping is a crucial task for even small businesses to ensure their financial security.
You have to determine your requirement yourself as to whether you want to hire full-time bookkeepers, part-time bookkeepers, or outsource bookkeeping services. Whether your business needs a couple of hours or a full-time bookkeeper is dependent on your business’s transactions volume, the number of customers & suppliers, and how complex the overall process is going to be. But one thing that remains constant is that the bookkeeping process is critical for your business, and you must hire bookkeepers to ensure your financial data is well organised and error-free. We hope we were able to bust a few bookkeeping myths for you. Do not let these bookkeeping myths stop you from investing in bookkeeping services.