(720) 278-7838

Bookkeeping Outsourcing Made Easy: A Step-by-Step Guide for Busy Business Owners


Want help with your bookkeeping? We make it easy. Get startedSpeak w/ a Founder, or Schedule a Callback

Two smiling women working on laptops.


Have you ever considered bookkeeping outsourcing as a solution to your finance tracking woes? Outsourcing is a great solution for many business burdens, and we believe that bookkeeping is one of them. Not just anyone can do proper finance tracking for a business, and learning takes time and effort. 

In this post, we’ll walk you through how you can benefit from passing off this task and how to do it the right way.


Understanding Bookkeeping Outsourcing

Bookkeeping outsourcing entails entrusting the tasks and responsibilities of managing your business’s financial records to an external provider. You can hire a freelance bookkeeper, a dedicated accounting firm, or an online bookkeeping service.

How It Typically Works

Once you choose a bookkeeping partner, you’ll establish a scope of services, fee structure, and communication protocols. You’ll then sign an agreement and give them access to your financial information, ideally through secure accounting software. The bookkeeper will then begin to collect your financial data and categorize and record transactions. They can also do any catch-up work you need.

On a set schedule, the bookkeeper will reconcile your bank accounts and credit card statements. They will compare your internal records with official bank statements to address any discrepancies and ensure accuracy. They will also generate essential financial reports like balance sheets, income statements, and cash flow statements. These reports give you a comprehensive overview of the business’s financial health and performance.

The difference between bookkeeping outsourcing and traditional in-house bookkeeping

With in-house bookkeeping, you need to directly manage and oversee the bookkeeper you hire. You also need to provide all the training, ensure quality control, and handle payroll and benefits. When you work with an outsourcing provider, they manage most aspects and you pay them a fee for their services.

Usually, outsourcing works out cheaper and less stressful. You don’t need to worry about taxes and benefits or overhead and software fees, not to mention whether your bookkeeper follows accounting best practices. This eases your burden and makes the costs more predictable, which is especially great for smaller businesses.

The skillset and experience of an in-house hire can vary greatly. Scaling bookkeeping services up or down can be challenging as your business grows. With an outsourced provider, you have access to a team of experienced professionals in your niche. These agencies can easily scale their services to meet your changing needs.


Step-by-Step Guide to Outsourcing Your Bookkeeping

The hands of one man training another man in bookkeeping outsourcing.


Step 1: Identifying Potential Bookkeeping Partners

Once you know what you need help with, you can start looking for suitable bookkeeping services. You’ll need to have a list of the specific tasks you want to delegate, such as data entry, bank reconciliation, report generation, payroll processing, or a combination.

Look for companies that use compatible accounting software or are comfortable with your preferred software. In some cases, they may recommend that you switch to a better tool, and you should consider this advice.

Always prioritize outsourced bookkeeping services with good reviews and ratings. Look for providers with industry-specific knowledge and experience in your industry size and complexity. This always makes things go more smoothly. Check their team’s qualifications and certifications, too. Finally, make sure that the offerings align with your needs, and that their packages and pricing structures fit your budget.

Step 2: Vetting Your Shortlisted Providers

Review the proposals you received from shortlisted bookkeeping services. Select a few to schedule interviews with. Prepare a list of interview questions that assess their expertise, experience, and fit for your specific needs. 

Start the interview with pleasant introductions and a give brief overview of your business and bookkeeping needs. Then dive into the questions about their qualifications and experience with businesses like yours.

Make sure you request a sample of their work or case studies that demonstrate their approach to similar clients. Next, discuss their packages, turnaround times, and any additional concerns. Finally, ask them if they have any questions for you. 

Remember to allow time for open-ended questions so you can assess their problem-solving skills vis-a-vis your specific requirements.

Step 3: Finalize the Service Agreement and Transition Your Bookkeeping Tasks

When you find the best fit, you can put everything down on paper. This helps both parties stay on the same page and enjoy a smooth working relationship. Make sure your bookkeeping service agreement outlines the terms and conditions to protect both parties.

Clearly identify the client (your business) and the bookkeeping service provider (including their legal business name and contact information). Then meticulously detail the specific bookkeeping services and the fee structure. Indicate either a specified duration for the agreement or a minimum commitment period if it’s an ongoing service. Add the conditions under which either party can terminate the agreement and the process for resolving any disputes.

We recommend that you add a strong confidentiality and security clause. Add restrictions on how the service can use or disclose your data. Clarify ownership of any intellectual property created during the course of service, too. Of special importance with outsourced partners, you must specify the jurisdiction whose laws will govern the interpretation and enforcement of the agreement.

Once signed, you can prepare your financial documents for a smooth transfer to a new bookkeeper. You’ll need to give them access to not only your expenses but also copies of your previous tax returns. Using accounting software can expedite the data transfer process. Of course, you can make digitizing your paperwork their first task. Then they can work on reconciling statements to get everything matched up before you move on to new transactions. 


Common Mistakes to Avoid When Outsourcing Bookkeeping

A girl biting down on a pencil as she looks at a laptop screen.


Overlooking the importance of clear communication

We believe that clear communication is always essential for successful business operations. In the world of outsourced bookkeeping, it rings very true. Without clear communication with outsourced partners, they might misunderstand your unique processes and requirements. This can lead to inaccurate work and thus, misrepresentation of your financial data. That can be dangerous. At the very least, you will miss the benefit of a bookkeeper’s valuable financial insights into your goals and challenges. This limits your ability to make data-driven decisions for business growth.

Clear communication upfront is key. Unclear or delayed instructions about transactions can lead to late data processing, errors in categorization, and missed deadlines for reports or tax filings. Both sides can end up frustrated and waste much valuable time clarifying issues and correcting errors that can be easily avoided. 

Neglecting to set and review key performance indicators

KPIs are crucial for streamlined bookkeeping outsourcing. They give you a standard measure of performance to assess the accuracy, efficiency, and overall value you’re getting. Tracking KPIs over time helps you to identify areas where bookkeeping processes might need to improve. This way, you can ensure that everything aligns with your needs, even as they evolve. 

KPIs also help you verify the contributions of a bookkeeping service to your agency’s financial goals. These goals might include streamlining tasks, improving financial reporting accuracy, and gaining better insights. Data-driven insights from KPIs help you to identify opportunities for optimization, or know when to seek alternative solutions.

Key Performance Indicators for outsourced bookkeeping include:

  • Percentage of transactions recorded correctly 
  • Consistency in financial report delivery by agreed-upon deadlines
  • Responsiveness to inquiries and requests 
  • Timeliness of discrepancy resolution or error correction 
  • Cost-effectiveness compared against value delivered in terms of accuracy, efficiency, and strategic insights.

Underestimating the value of a culturally aligned partnership

Cultural alignment can be a game-changer when outsourcing bookkeeping. When a company overlooks cultural fit, several issues can arise. Communication barriers are the most obvious problem that stems from cultural differences. Communication styles might be misinterpreted, for instance, disrupting the flow of instructions and expectations.

Cultural norms can influence work styles and preferences, too. When these don’t align, the result is often friction that can lead to stress and damaged relationships. For instance, different cultures can have varying perceptions of deadlines and time management. Your government may uphold a more fast-paced, strict environment while the bookkeeping service is more conservative and detail-oriented. If this leads to missed deadlines, you will inevitably feel the financial repercussions.


Frequently Asked Questions

How can I ensure the security of my financial data with an outsourced bookkeeping service?

You cannot realistically eliminate all risk factors, even if you take bookkeeping in-house. However, you can minimize risks to your sensitive information with the following steps.

First, make sure that the bookkeeping service you hire implements the highest data security protocols. This includes data encryption (at rest and in transit), controls to restrict unauthorized access, and regular security audits.

Second, check that the service complies with all the relevant data privacy regulations in your location and the service’s location. These may include the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).

Third, ask about how the service handles recovery in case of cyberattacks, natural disasters, hardware failures, etc. Ask also about how they secure any stored physical copies of your financial documents.

Are there industry-specific bookkeeping outsourcing services, and how do I find them?

You can find industry-specific services that specialize in bookkeeping for various sectors. These services understand the unique financial aspects of your industry and can tailor their bookkeeping solutions to your specific needs. For example, you can approach a service like EcomBalance for help with bookkeeping within the ecommerce industry.

To find a service for your needs, we recommend tapping into your network. Word of mouth from trusted associates is still the best way to find reliable help. These services are also more likely to be familiar with the financial nuances of your business niche.

You can also find a bookkeeper by searching online by industry or checking popular freelance websites for providers with the right experience. You can use marketplaces like Upwork, Fiverr, or FreeUp. Note, however, that they don’t all provide the same level of support or security.


What Is AccountsBalance?


AccountsBalance is a monthly bookkeeping service specialized for agencies & SAAS companies.

We take monthly bookkeeping off your plate and deliver you your financial statements by the 15th or 20th of each month.

You’ll have your Profit and Loss Statement, Balance Sheet, and Cash Flow Statement ready for analysis each month so you and your business partners can make better business decisions.

Interested in learning more? Schedule a call with our CEO, Nathan Hirsch.

And here’s some free resources:



In Summary

Outsourcing bookkeeping can be a strategic solution for businesses of all sizes. It can help to streamline financial operations, save costs, and give you valuable insights. AccountsBalance founders Nate and Connor firmly believe in outsourcing because they lived it. Without the help of outsourced bookkeepers to take care of their books, their businesses would have been a mess. Yes, before this newer company was born, they ran several other businesses that grew because of outsourced help. Now, you can tap into their decades of experience to get the best service and business tips. Engage your own outsourced bookkeeper today, or join Outsource School to learn more about running a business with VAs.


Want help with your bookkeeping? We make it easy. Get startedSpeak w/ a Founder, or Schedule a Callback

Recent Posts

Julia Valdez

Julia Valdez

Julia is a career freelancer and agency owner turned coach for those seeking abundance and victorious living. A professional teacher and decades-long lover of the art of words on paper and the stage, she loves sharing actionable advice on life-changing topics. When she’s not helping freelancers and other small business owners grow, you can find her sharing lots of laughs over little crazy things.

Want better bookkeeping?

Grab our 10 Step Entrepreneur Bookkeeping Checklist & get started on the right foot.

Leave a Reply

Your email address will not be published. Required fields are marked *

Exclusive finance guide

Want better bookkeeping?

It's possible! Subscribe below & we'll send you our Bookkeeping Packet. A pack of resources to teach you about bookkeeping.

You’ll get our Entrepreneur Bookkeeping Guide, our Monthly Finance Meeting Agenda, & a few surprises!