Building a business or wanting to do so requires having a grasp of the significance of accounts and all aspects related to finance.
Bookkeeping is mainly concerned with the process of recording financial transactions including sales, purchases, income, receipts and payments by an individual, organization, non profit or business.
Bookkeeping matters because every transaction involving your business, matters.
Bookkeepers record financial transactions in a variety of ways, including journals, ledgers and special financial reports that show how a business has performed over a period of time. It is an important practice in order to ensure the accuracy of financial records, compliance with tax laws and to help financially prepare your business for the future.
Accurate bookkeeping is the backbone of any successful business. It’s important to not only keep track of all financial matters but to also organize your finances in a way that allows you to draw conclusions and make effective business decisions.
Having worked in this field for many years, I have observed that small businesses frequently fail because of bad bookkeeping practices which often leads to cash-flow issues and ultimately ends up in business failure.
You aren’t able to have a clear picture of your business’ cash flow if you do not have a sound bookkeeping practice. You might suffer from poor budgeting, incur overdrafts, or other financial challenges that could dry up your cash flow. Thus, the failure.
In fact, quoting Jessie Hagen of the US Bank, “82% of businesses fail due to poor cash flow management and poor understanding of cash flow”.
Bookkeeping isn’t always easy. In fact it’s often hard, time-consuming and demands (up-to-date) expertise. Consequently, many entrepreneurs in small businesses and medium enterprises are outsourcing their bookkeeping in order to accurately report their business financial transactions.
So if you are planning to, or currently running a small to medium business in Hong Kong, you might as well consider outsourcing bookkeeping. It may be the most efficient, effective and affordable option for you to take care of this important business function.
Here are 5 Top Reasons on Why You Should Outsource Bookkeeping in Hong Kong
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An Outsourced Bookkeeper in HK will Reduce your Expenses
If you use a bookkeeping service, you’ll save on payroll (and operating costs) so you can spend more on other aspects of your business growth.
The most obvious benefit of outsourcing your business’ bookkeeping is that it saves both time and money. Depending on how many employees are involved in the process, you may be able to cut back on your company’s payroll. If you’re small or just starting up a business with a limited budget, outsourcing may be much more affordable than hiring an in-house professional.
You won’t need to worry about the cost of hiring a full-time employee when you outsource bookkeeping services because it’s usually cheaper than doing it yourself or hiring someone in-house. Plus, since most companies charge by the hour instead of per project, there’s no minimum number of hours required for them to complete their work on time every week or month like there would be if they were working as a permanent employee!
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Minimizes Paperwork & Saves Time
Small businesses need to focus on the core activities related to their products or services. But they also need to manage other things like record keeping, invoicing, payroll, etc.
They often have limited human resources which may not really handle both the operations and accounting tasks. This is where outsourcing bookkeeping services can help them by saving time and minimizing paperwork.
You can save time by outsourcing all accounting tasks such as raising invoices, managing bills, payroll processing, etc. Instead of spending hours doing it yourself, you can leave it to a professional company and focus on other aspects of running your business. Also, you will get all the information in one place so that you don’t have to search for all paper works related to accounting and finance activities of your business.
This will allow you to do more work in less time so you can grow your business faster as it gives you enough time to focus on other such core business activities like sales and marketing, customer satisfaction, or product development (to just name a few).
When you outsource bookkeeping services, it helps you to avoid distractions and be more focused on your business. It will help you allocate your time and pay closer attention to the day-to-day activities of your business, rather than scanning receipts, and filling out forms.
Outsourcing bookkeeping services can give you the freedom to make valuable decisions without worrying about anything else.
You will have greater flexibility because you won’t have to worry about finding time for bookkeeping during regular office hours. Instead, an outsourced team will do the work for you at your convenience—which means less stress for your company and your paid staff.
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Cloud Based Bookkeeping with Hong Kong’s Leading Bookkeeping Software; Xero
By outsourcing bookkeeping tasks, you will be provided access to their cloud-based bookkeeping services. Cloud-based accounting systems like Xero have become the new norm for many businesses because they allow for greater mobility, accessibility and security. This is exactly the reason why we have embraced Xero as our go to software of choice for all Pinetree clients.
With Xero, you’ll be able to keep track of your business’ finances from any location a lot easier. Rather than having to go into your office every day to access your financial documents, you can view them from anywhere at any time. If you’re on vacation and need to check in on something, it will only take one tap on your phone or tablet.
This allows a more flexible work schedule and greater freedom to travel.
You may also feel more secure using a cloud-based system as you won’t have to worry about losing important documents or data breaches. All of your information will be stored in the cloud with highly secure passwords and safety features.
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Reduce Errors and Maximize Accuracy with a Specialized Hong Kong Bookkeeping Firm
Outsourcing your bookkeeping services can help you reduce errors and maximize accuracy without a training gap. This is because the bookkeeping firm will assign you a dedicated team of qualified professionals who are highly trained and skilled in their respective fields that pertain to your industry.
When you hire a professional bookkeeping service, they will ensure that every transaction is recorded correctly. These experts will ensure that all of your records are meticulously prepared and filed properly with the necessary Hong Kong government departments, which can prevent you from committing tax errors and occuring penalties.
The team will also reconcile all accounts to ensure that everything adds up. Moreover, your books will be updated every time a new entry is made to the ledger.
In addition to this, outsourced bookkeepers use state-of-the-art accounting software for bookkeeping purposes. These software platforms are equipped with a number of tools that help make the process more efficient and accurate. For example, some of these tools can automatically match transactions and can flag duplicate entries without human intervention.
Furthermore, outsourcing your bookkeeping services means you do not have to go through the hassle of training new employees if your full-time employee decides to quit or goes on leave. In the case of outsourced services, you get the same team even if someone leaves the position or goes on holiday. Thus, there will be no training gap and this will leave a little to no room for errors or inaccurate reports.
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Prepare your Bookkeeping for Hong Kong Tax Season Effortlessly
Tax season in Hong Kong is every business owner’s least favorite time of year, but it doesn’t have to be with outsourcing bookkeeping.
Most of the stress and anxiety around tax season is due to the fact that business owners are tasked with gathering all their receipts, files, and documents so that their accountants can prepare their taxes. It ends up being a huge waste of time for everyone involved.
The best way to make this process easier is by outsourcing your bookkeeping services. Having an outsourced bookkeeper means that all your financial records are organized and accounted for throughout the year.
This means that when your accountant comes calling looking for information there won’t be any frantic searching or late-night crunching. All they will need to do is ask your bookkeeper!
There are several other points that support my view on why you should outsource bookkeeping in Hong Kong.
If you need to know more, you may contact me at vinod@pinetree.hk, call us on +852 3529 2328 or visit our website www.pinetree.hk
