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Outsourcing Your Small Business Accounting Functions to Family

Todays Date: November 16, 2018

If you are the owner of a small business, who is interested in saving a portion of your payroll costs,thinking about outsourcing your current accountant or bookkeeper, a family member is out of work, outsourcing to family may make sense for you.

Outsourcing your bookkeeping functions may result in reduced salary expenses, or the conversion of fixed costs to variable costs, insurance benefits and some tax savings, etc.. Before you begin to outsource, you will need to purchase a quality fax machine or scanner. The type of fax machine or scanner is dependent upon the volume and frequency of paper documents (i.e. customer invoices,vendor bills, bank statements, etc.) to be scanned and sent to your outsourced accountant. Scanning or faxing is necessary because all of the source documents have to be sent either by email or fax to the outsourced accountant to record the accounting transactions.

As an owner of a small business or the person responsible for the accounting or bookkeeping, it’s important to establish a process by which to monitor the activities of the outsourcing company or person. Outsourcing may make sense, providing a competent and independent person oversees and monitors the financial results on your behalf.

We often read that that if you outsource, some of your business accounting functions to a foreign country, then your labor costs will decrease as compared to what you would generally pay in the United States. In these uncertain times, when small business owners are facing survival issues resulting from lost sales, skyrocketing costs, contraction, often exacerbated by family unemployment, then it may make sense to give thought to employing a family member to help with the small business accounting. By employing a family member in your house or outsourcing your accounting function with family in a distant location, rather than outsourcing to another country, you may actually help the U.S. economy, in your own way, by keeping jobs in this country. A baby step,but certainly the right one for our country. This idea works, if the owners or members of the owner’s family can learn QuickBooks, or another comparable online accounting software program. It’s helpful, if the family member has some basic financial knowledge to undertake this responsibility of entering the financial information into an online accounting software. Given the current economy in the United States, there are situations where family members are now unemployed and are now ready, able and available to help and make a positive contribution to the family business.

Quite frankly,QuickBooks Online Plus is simple enough that with proper training, most detail oriented people with common sense can handle QuickBooks, as long as a CPA or accountant is available to ask questions,and there is mechanism to allow for real time or after the fact corrections or adjustments to the accounting records.

Under either scenario, outsourcing with a family member or to a foreign country,a CPA or accountant or a skilled financial services consultant is the ideal person to monitor either the real time, or monthly or quarterly financial information, and to check that the reconciliation process is working and more importantly, that outsource person or team, are doing the right job.

With the correct QuickBooks Online or other QuickBooks versions with remote access, it is possible for your CPA or accountant to remotely monitor an outsourced accounting department, whether the outsourced department is in a distant location or outsourced to family.

If you decide to outsource, then you should speak to your CPA or accountant in order to ascertain if whether or not outsourcing is appropriate for your particular small business accounting situation. The CPA or accountant is best suited in helping you evaluate the potential skill set of the person to provide the outsourced service.

This concept of outsourcing to one or two family members may not work for a large or mid size business. However, if you own a small business, interested in effectively reducing a portion of your payroll costs, have decided or thinking about outsourcing your current bookkeeper, and someone in your family is unemployed, outsourcing may be right for you. Once again, this will work as long as the outsourced family member is properly supervised and monitored by a CPA or accountant. In the beginning there may be more time required by your CPA or accountant to train and to oversee as compared to time that your accounting professional currently spends each month or quarter. In the long run, the amount of time required by your accounting professional should diminish. Notwithstanding, some time will always be required of your accounting professional to monitor the activities of the outsourced person.

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