Hybrid Approach to Bookkeeping and Accounting for Small Business

Feb 24, 2024

Hybrid Approach to Bookkeeping and Accounting for Small Business

Key Takeaways

Bookkeeping and accounting are essential functions for any small business, but they can also be time-consuming, costly, and complex.
A hybrid approach combines the best of both traditional and cloud-based solutions, allowing you to outsource some or all of your bookkeeping and accounting tasks to a professional service provider, while still maintaining control and access to your financial data.
A hybrid approach can offer many benefits for small business owners, such as saving time and money, improving accuracy and compliance, enhancing scalability and flexibility, and gaining insights and advice from experts.
There are many bookkeeping and accounting service providers in the market, but not all of them are suitable for your specific needs and preferences. You should consider factors such as the scope and quality of services, the pricing and payment options, the security and reliability of the platform, and the customer support and communication channels.
Some of the leading bookkeeping and accounting service providers in Canada are SRJ Chartered Professional Accountants, Bench Accounting, True North Accounting, Enkel Backoffice Solutions, and Asan Group Inc. Each of them has its own strengths and weaknesses, and you should compare them carefully before making a decision.

What is a Hybrid Approach to Bookkeeping and Accounting?

· Bookkeeping and accounting are vital functions for any small business, as they help you track your income and expenses, manage your cash flow, prepare your tax returns, and make informed financial decisions. However, bookkeeping and accounting can also be challenging and tedious tasks, especially if you lack the skills, knowledge, or resources to handle them properly.

· Traditionally, small business owners have two main options for their bookkeeping and accounting needs: doing it themselves or hiring an in-house staff. However, both of these options have some drawbacks. Doing it yourself can be time-consuming and stressful, and you may make errors or miss deadlines that could result in penalties or audits. Hiring an in-house staff can be costly and risky, and you may have to deal with issues such as turnover, training, supervision, and payroll.

· Fortunately, there is a third option that can offer the best of both worlds: a hybrid approach. A hybrid approach is a combination of traditional and cloud-based solutions, where you outsource some or all of your bookkeeping and accounting tasks to a professional service provider, while still maintaining control and access to your financial data. With a hybrid approach, you can leverage the expertise, technology, and efficiency of a third-party provider, without losing the visibility, security, and customization of an in-house solution.

What are the Benefits of a Hybrid Approach?

A hybrid approach can provide many benefits for small business owners, such as:

Saving time and money: By outsourcing your bookkeeping and accounting tasks to a service provider, you can free up your time and resources to focus on your core business activities. You can also save money on hiring, training, and retaining an in-house staff, as well as on software, hardware, and maintenance costs.
Improving accuracy and compliance: A service provider can ensure that your books are accurate, complete, and up to date, and that your tax returns are prepared and filed correctly and on time. They can also help you comply with the relevant accounting standards, regulations, and laws, and avoid any penalties or audits.
Enhancing scalability and flexibility: A service provider can adapt to your changing needs and preferences, and offer you a range of services and packages to suit your budget and requirements. You can also choose the level of involvement and oversight that you want, and switch or cancel your service at any time.
Gaining insights and advice: A service provider can provide you with valuable insights and advice on your financial performance, trends, and opportunities, and help you make better financial decisions. They can also answer your questions and address your concerns, and provide you with reports and dashboards that you can access anytime and anywhere.

Why Outsource Bookkeeping and Accounting?

Outsourcing bookkeeping and accounting can offer many benefits for small business owners, such as:

Saving money

Outsourcing bookkeeping and accounting can help you save money in several ways, such as:

Reducing the need to hire and train full-time or part-time staff, which can be expensive and time-consuming
Lowering the overhead costs associated with maintaining an in-house bookkeeping and accounting department, such as office space, equipment, software, and benefits
Paying only for the services you need, when you need them, instead of paying a fixed salary or hourly rate
Avoiding penalties, fines, and interest charges due to errors, omissions, or late filings

Table

In-house bookkeeper	Outsourced bookkeeper
Average salary: $45,000 per year1	Average fee: $300-$500 per month
Additional costs: payroll taxes, benefits, training, software, etc.	No additional costs: taxes, benefits, training, software, etc. are included in the fee
Fixed cost: you pay the same amount regardless of the workload	Variable cost: you pay only for the services you use

Improving efficiency

Outsourcing bookkeeping and accounting can help you improve efficiency in several ways, such as:

Streamlining and standardizing your bookkeeping and accounting processes, which can reduce errors and inconsistencies
Leveraging the latest technology and best practices to automate and optimize your bookkeeping and accounting tasks
Accessing real-time and accurate financial data and reports, which can help you monitor and manage your business performance
Freeing up your time and resources to focus on your core business activities, such as product development, marketing, and customer service

Table

In-house bookkeeper	Outsourced bookkeeper
Manual data entry: prone to human error and duplication	Automated data entry: using cloud-based software and integrations
Delayed reporting: financial statements are prepared monthly or quarterly	Real-time reporting: financial statements are updated daily or weekly
Limited expertise: may not have the skills or knowledge to handle complex accounting issues	Diverse expertise: can handle various accounting issues and provide professional advice

Accessing expertise

Outsourcing bookkeeping and accounting can help you access expertise in several ways, such as:

Working with qualified and experienced bookkeepers and accountants, who have the knowledge and skills to handle your bookkeeping and accounting needs
Getting professional advice and guidance on various bookkeeping and accounting issues, such as tax planning, cash flow management, budgeting, and forecasting
Staying up to date and compliant with the latest tax laws, regulations, and standards, which can change frequently and vary by jurisdiction
Benefiting from the insights and best practices of bookkeepers and accountants who work with different industries and clients

Table

In-house bookkeeper	Outsourced bookkeeper
Generalist: may not have the specific expertise or experience for your industry or business	Specialist: can provide tailored solutions for your industry or business
Isolated: may not have access to external resources or networks	Connected: can leverage the resources and networks of their firm or platform
Static: may not keep up with the changing accounting trends and requirements	Dynamic: can adapt to the changing accounting trends and requirements

How to Choose a Bookkeeping and Accounting Service Provider?

There are many bookkeeping and accounting service providers in the market, but not all of them are suitable for your specific needs and preferences. You should consider the following factors when choosing a service provider:

Scope and quality of services: You should look for a service provider that can offer you a comprehensive and customized solution for your bookkeeping and accounting needs, such as bookkeeping, payroll, accounts payable, accounts receivable, tax preparation and filing, and financial reporting. You should also check the qualifications, experience, and reputation of the service provider, and the quality and accuracy of their work.
Pricing and payment options: You should compare the pricing and payment options of different service providers, and choose the one that fits your budget and expectations. You should look for a service provider that offers transparent and competitive pricing, and flexible and convenient payment options, such as monthly, quarterly, or annual plans, or pay-as-you-go plans.
Security and reliability of the platform: You should ensure that the service provider uses a secure and reliable cloud-based platform to store and process your financial data, and that they follow the best practices and standards for data protection, encryption, backup, and recovery. You should also check the availability and uptime of the platform, and the frequency and quality of the updates and upgrades.

Customer support and communication channels: You should look for a service provider that offers excellent customer support and communication channels, and that you can easily reach and communicate with. You should look for a service provider that assigns you a dedicated account manager or team, and that you can contact via phone, email, chat, or video call. You should also look for a service provider that provides you with regular feedback and updates, and that listens to and addresses your feedback and suggestions.

Summary

Opting for a hybrid model that blends in-house operations with outsourcing aspects of bookkeeping and accounting offers small businesses a strategic advantage. By leveraging the expertise of external partners, businesses can achieve greater efficiency, cost-effectiveness, and flexibility while maintaining control over critical processes. This approach empowers businesses to focus on core activities, innovate, and drive sustainable growth in an ever-changing business landscape.

ASAN Can Help

Empower your financial future with ASAN's expert guidance on Hybrid Approach to Bookkeeping and Accounting, aligning investments with your goals for true financial freedom.

Ready to take the next step?

📞 Phone: +1(613)-981-7097

🌐 Website: asangroupinc.com

Disclaimer:
The information provided in this blog is intended for general guidance and informational purposes only and should not be considered as professional accounting, audit, or assurance advice. Please consult with a certified professional for specific advice tailored to your situation.