Xpitax News Articles
Outsourcing Brings Value to Bookkeeping Services
As outsourcing completes its third year, more and more firms are jumping on the Bandwagon. Outsourcing has proven itself as a cost effective way to process individual tax returns while avoiding staffing issues. Approximately 98% of the work that has been outsourced in the last three years is made up of individual tax returns. Firms have realized that outsourcing provides them an avenue to leverage their existing staff to do higher value work. Every year firms increase their comfort level with such issues as security, control and quality.
As we look forward, the next waive of outsourcing is bookkeeping. Bookkeeping by its very nature has the same issues that make outsourcing individual tax returns a necessity. Bookkeeping tends to be low gross profit margin work and it is virtually impossible to find qualified bookkeepers. There are a number of firms (including my own firm, KAF Financial Group) that decided long ago to give up their bookkeeping practices. KAF found that they were making little or no profit on their bookkeeping engagements. And with the advent of QuickBooks, clients often felt that they could do their own bookkeeping, until they received our year-end bills to clean up their mistakes!
Outsourcing bookkeeping services is extremely easy through Xpitax. You simply scan your client's source documents, provide us a list of the services your outsource team is to perform (such as all postings, bank reconciliations, monthly AJE's, specific workpapers etc.) and submit them along with the client's QuickBooks data files to Xpitax. We take it from there! If there is missing information or clarifications that are needed we transmit them to you through XCM, our workflow management solution. Once the bookkeeping is completed, we send the source document files back to you, indexed and annotated, along with the completed QuickBooks file for the month, quarter and year. The QuickBooks file is then reviewed by your in-house bookkeeper before the financials are mailed to the client. Its that EASY!
With the low cost structure of outsourcing, developing or buying a bookkeeping practice can bring new life into your practice. By outsourcing both the bookkeeping and year end tax preparation you can reap up to 50% gross profit margins per engagement. In addition, since you are looking at the information on a monthly or quarterly basis, you are shifting work from the busy time of the year (spent cleaning up their messy QuickBooks files) to what typically is the slow time of the year. Adding revenue and value to your practice.
Steve Erickson, a nationally known consultant made the observation at our recent firm retreat " Would you rather be working on high demand, less profitable and more risk exposed audit and financial statement clients or working on less demanding, high gross profit margin and virtually risk adverse bookkeeping clients?" I think I know the answer.
For more information on the next waive of outsourcing or to discuss how outsourcing may fit into your firm contact Mark Albrecht at
malbrecht@xpitax.com or at 781-303-0136.