KPMG Spark Blog
While most companies aspire to outsource their bookkeeping, many instead opt for a DIY option. Managed accounting is a viable alternative that offers more support and features than DIY software, but is just a fraction of the cost of a full-time bookkeeper. Join us as we take a look at the pros and cons of online bookkeeping software vs. outsourced bookkeeping with managed accounting.
Virtually every business owner dreams of outsourcing their books to an accounting firm, or to hire a full time, in-house bookkeeper or accountant one day. While some businesses can (and do!) benefit greatly from outsourced bookkeeping through a third-party CPA partner, this option simply isn’t a reality for the vast majority of small business owners. Many companies instead opt for what they think is the only other option: DIY accounting with the help of online bookkeeping software. While these two scenarios are the most familiar, a viable third option now exists – one that offers way more support and features than DIY software, but is just a fraction of the cost of a full-time bookkeeper. The system is called managed accounting, and businesses all over the United States are using it to save time, increase revenue, and build more financially sound companies.
Let’s take a look at the pros and cons of online bookkeeping software vs. outsourced bookkeeping with managed accounting:
As mentioned, when full service outsourced bookkeeping isn’t a viable financial option, many small business owners think they have to settle for traditional online bookkeeping software for their accounting needs. This isn’t surprising, given that it’s the cheapest option and many small business owners operate on thin margins at the early stages of their business. However, the short-term gains of saving a few dollars comes with major opportunity costs. Traditional online bookkeeping requires many hours on behalf of the business owner – or one of their employees – to maintain. Someone has to manually enter receipts and reconcile the account, designating expenses in their proper places within the system. All of this entry can add up to a lot of hours over the course of a given month.
While managing your books in-house with traditional online bookkeeping software might seem like a good idea at first, there are major opportunity costs associated with going the DIY route. After all, time is a non-renewable resource, and every minute matters when you run a business. Consumed with hours of manual data entry, most business owners find that there is little (if any) time left to actually analyze their books on a regular basis. Without time to review the numbers at a high level and identify trends, business owners may miss out on valuable opportunities to increase revenue and operate more efficiently. When it comes to accounting, it can be easy to miss the forest for the trees.
Unlike traditional DIY bookkeeping software, managed accounting offers a smart solution to the data entry onslaught that accompanies bookkeeping duties. The KPMG Spark managed accounting system harnesses the power of automation technology, software, and a dedicated bookkeeper to save business owners and their employees from the trenches of manual data entry, freeing up time for more high-value activities. The system differs from traditional online bookkeeping software in three key ways:
Automation Technology: Machine learning and smart AI reconcile your books and categorize your expenses, all with minimal input from the business owner.
Software Interface: An easy-to-use, always updated dashboard provides you with a big picture view of your financial status at all times. Customizable reports help you analyze the data and plan for the future.
People: A dedicated, human bookkeeper is assigned to your account to oversee the technology, proactively address any nuances within your business, and communicate with you to make sure everything stays on track.
These three factors add up to major time savings for business owners who invest in managed accounting. What’s more, it’s designed to easily integrate into how your business is structured. If you personally manage your books, your dedicated KPMG Spark bookkeeper will channel communication through your preferred method of contact (phone, email, or even text). If you already have an in-house bookkeeper, KPMG Spark will work directly with your employee, freeing up their time to focus on higher value activities that deliver more for your business.
The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG LLP.
This blog article is not intended to address or provide advice concerning the specific circumstances of any particular individual or entity and does not constitute an endorsement of any entity or its products or services.
Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities.
The following information is not intended to be “written advice concerning one or more Federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230. The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.
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