What You Need To Know About Outsourcing Bookkeeping & Accounting

What You Need To Know About Outsourcing Bookkeeping & Accounting

Tim Fitzpatrick
If you do not do a good job of maintaining your company books, you won't have a clear picture of the financial health of your business, not good at all. That is why I have got a special guest with me today. And we are going to jump into what you need to know about outsourcing your bookkeeping and accounting. Hi, I am Tim Fitzpatrick with Rialto Marketing. Thank you so much for taking the time to tune in. I am really excited to have with me today Amber Peoples of Atlas Services.

Tim Fitzpatrick
Amber, thanks for taking the time and welcome.

Amber Peoples
Hi. Thanks for having me.

Tim Fitzpatrick
Oh, absolutely. We're at the end of another week. It's crazy how fast these weeks go by.

Amber Peoples
Most definitely.

Tim Fitzpatrick
Don't seem to be doing much, but they still go by fast. So I'm excited to talk about this because I think a lot of people, you know, they tend to overlook the importance of it. And it's so easy to make mistakes with our bookkeeping in our accounting, especially when we're handling it ourselves, because, you know, that's not most of our expertise.

Tim Fitzpatrick
But it's really important to get it right. Right. So before we jump into it, just tell us a little bit more about you and how you guys help clients at Atlas Services.

Amber Peoples
OK, perfect. So Atlas has been around for roughly five years now. We mainly specialize in service based companies, although we do have some retail as well. We focus on making sure that the financials, the daily bookkeeping is done. So getting invoices out to customers is vital because you want to get those terms ticking. So you get money in the door, as well as making sure your bills are entered in appropriately so you can get those paid when they're due so you don't get hit with late fees.

Amber Peoples
And then in addition to that, we do monthly financials and accounting. So balance sheet profit and loss and then work with CPAs at the end of the year to make sure taxes are filed quickly and timely. In addition to accounting and bookkeeping, we also provide human resources, support and payroll services as needed as well.

Tim Fitzpatrick
Awesome. All important things. I know when I was in the distribution business, HR was always such a challenge, you know, it's just when you think you have things cooking, something pops up and having a resource that you can rely on to say, hey, how do I need to handle this situation to protect myself, our company?

Benefits of Outsourcing Bookkeeping and Accounting

Tim Fitzpatrick
Super, super important. So let's just jump into this. I mean, time is such an important resource for all of us. We can't do everything. We've got to find ways to spend our time where it's in its highest and best use. So what are some of the benefits of outsourcing, bookkeeping and accounting for businesses?

Amber Peoples
So first of all, without having a person on staff, you obviously save on some salary as well as benefits and payroll taxes. But in addition to outsourcing, you get more of an expert set of eyes to take a look at your financials. And in addition to LB's, if you outsource to a separate bookkeeping firm, then your CPA, then you're guaranteed to have two educated sets of eyes on your financials pretty much at all times.

Amber Peoples
I have some clients that want their financial center, their CPAs on a monthly basis. So that way the CPA stays engaged and can watch and just ask questions instead of just focusing at year end, rather than want them to engage at year end. So really, when the clients comfort level. That's the first benefit, is just making sure that there's educated eyes looking at your financials and also your financials are priority for us, so they're not necessarily for you if you're busy running the company day to day or, you know, servicing your own clients, as you should be.

Tim Fitzpatrick
Yeah.

Amber Peoples
If we can take some of that administration burden off of our customers, that's why we're here.

Tim Fitzpatrick
Yeah, well, I'm assuming there are a lot of business owners that just don't understand all the financial numbers. Right. So when you outsource, you've got a partner there that can break those down into easy to understand concepts, right? Here's the numbers, here's what the numbers actually mean for you.

Amber Peoples
Exactly. Accounting is essentially a different language. It's a whole different set of vocabulary words and all of that. So just having a partner ensures that we can put it in terms that the owner will understand. And that their managers can use understanding as well.

Tim Fitzpatrick
I think one of the things that you said that's really important to pull out here is, you know, in the beginning when you don't have a need for a full time accounting person. It doesn't make sense to hire somebody and honestly, even if you do hire somebody, it still makes sense in a lot of cases to outsource some of that accounting work to firms like Atlas. We run into this all the time on the marketing side where people are like, well, I've got enough going on. I'm just going to hire a fifty thousand dollar a year marketing person. And they expect that. Fifty thousand dollars, your marketing person to do one hundred and fifty thousand dollars a year work.

Tim Fitzpatrick
It's not going to happen, you know. And so even if you do have a need where you need somebody to handle that, the more tactical day to day stuff, outsourcing some of the higher level work to somebody like Atlas makes a lot of sense because then it's you can still oversee what's happening at the employee level of the business, but you can also guide that person, whereas the business owner and a lot of cases, if they're outsourcing the accounting and it's not their expertise, they're not really sure how to manage that accounting person they just hired.

Amber Peoples
Exactly. So at Atlas, we do offer a variety of options. So we have multiple clients that want us to do everything from A to Z and then others that just want us to pop in once a month to their financials. Take a look, see if their internal bookkeeper, if everything looks good, if everything reconciles and then produce the financial statements because it's not that person's expertise. And then also with outsourcing bookkeeping, if you do have one person on your staff, if that person's out on vacation or sick or something, your accounting comes to a halt.

Tim Fitzpatrick
Yes.

Amber Peoples
Atlas is myself and then I have three members on my team. So the four of us together work on all the clients. So that way we all can cover for each other. If we're out. I deal with every single client. I am the last set of eyes that looks on the financials. That way we can also have multiple people around.

Tim Fitzpatrick
Redundancy is a good thing. So let's take one step back, right. So I totally get the benefits. Like I said, we see that on the marketing side. Outsourcing, not if not all certain aspects of your marketing is super, super helpful for a lot of businesses. What are some of the signs, though, that in the beginning that I may need to think about outsourcing my bookkeeping accounting?

Amber Peoples
A lot of it is if you are doing it yourself and it's getting too overwhelming, that's a big sign. Also, if you do have somebody on staff right now and you just don't have trust or faith in their work, that's usually an obvious sign that you need to replace that employee. So a sign that you may want to look into an alternative just so that way you're getting the expert to do the work that needs to be done.

Tim Fitzpatrick
Yeah. Do you find sometimes our clients running into money management issues or accounts receivable issues, AP, those kinds of things? I mean, are those types of problems surfacing as well?

Amber Peoples
Yes, even more so now with quarantines and offices being closed. I'm seeing a lot of struggles with mail piling up at the offices for some clients. And the bookkeeper that they have, just can't make it to the office to go through the mail. So then bills are late. The checks aren't being deposited. Yeah. And then also, you know, just having issues with just working remote.

Tim Fitzpatrick
Yeah. Well, and if things aren't being done timely, then the financial reports that you're getting aren't accurate.

Amber Peoples
Right. And they're not being able to be produced timely either. So you're not having the reports in a timely manner in order to make adjustments to the business as needed or other management decisions.

How Bookkeeping and Accounting be Personalized

Tim Fitzpatrick
Got it. Yeah. Makes perfect sense. So what about, you know, how can bookkeeping and accounting services and reporting be personalized for clients? I'm assuming some clients. Before they outsource, have a little bit of a hang up of, gosh, how is this going to be personalized for my business?

Amber Peoples
So several industries have specialized software that they use. We have clients currently that are in the landscaping industry, the software as a service, and multiple clients have various different CRM tools that they use for time tracking, for reporting and such. And me and my team are able to gain access and learn those systems so we can actually support not only their financials, but we can also support their CRM systems and pull the data ourselves. So it's not just working with Quickbooks or whatever. We're also able to dive in deep and get a feel for their business.

Tim Fitzpatrick
Yeah. So if somebody is thinking about outsourcing. I'm assuming it's a good question to ask would be how can you personalize your service based on my particular needs?

Amber Peoples
Exactly. So some of our clients, like I said earlier, they want us to do everything. So that includes I receive at my office their mail. I deposit checks for them, I receive their bills for them, all of that. So that way they can focus on what they do best, which is servicing their clients. And then other clients like to have control of their mail. So they have it sent to their offices, which either are fine.

Amber Peoples
And so they like to see the physical checks and take it to the bank themselves and then just.

Tim Fitzpatrick
Got it. If I'm looking at outsourcing I know there are a lot of companies where it's kind of like we've got package one, two or three. Should I have any concerns about that type of offering?

Amber Peoples
Those offerings make sense for the bookkeeping customer, for a company, because they're trying to expand their business base and if they can keep services within certain boxes. And they can grow their business in that way. Atlas Services, we like to personalize our service for each customer based on their needs. That way they're receiving the types of services that they need specifically. Each and every one of our clients has a different look and feel of their financial packet every month based of their industry and their needs. Some of them are a lot larger. Some only want a couple of basic reports, somewhat very deep dive information.

Tim Fitzpatrick
So if I've got more general needs something like that may work, but if I've got specifics, it's going to be really important for me to ask those questions upfront to make sure that that provider is going to be able to meet those needs.

Amber Peoples
Exactly. You need to make sure that the needs are your needs are being met first and foremost instead of making sure your needs fit into their box.

Tim Fitzpatrick
Yeah, got it. OK. And I think one of the things that you said earlier that's really important, too, is I mean, one of the main reasons I think to outsource is to make sure that you get the information that you need, you know, and get the expertise to say, hey, here's the financials, here's what they mean. Here's what we're seeing. You know, you're in good shape or, hey, this is you know, this ratio is going up a little bit.

Tim Fitzpatrick
Nothing to be concerned about right now. But it is something that we want to keep an eye on as we continue to move through whatever the rest of the quarter, you know what I mean? And without that information, you can't make business decisions that are going to be beneficial for the company.

Amber Peoples
Exactly. Accounting is essentially a different language. So you have to learn all those vocabulary words and all of that. But having a partner team with you to explain it in your terms makes a lot more sense. And then also for your financial statements, also, you can personalize the look and feel of them. The numbers are going to be the numbers no matter what they are. But we can change how they're labeled, slightly so that way it makes more sense.

Alternative Budgets or Plannings Because of COVID

Tim Fitzpatrick
Yeah, got it. OK, cool. That's awesome. I love that. Thank you for that. It's kind of tough to have a conversation nowadays without talking about COVID and this whole pandemic that we're dealing with, what are some alternative budgets or plannings that should be done because of what's happening right now and what we're dealing with.

Amber Peoples
A lot of my clients I'm having conversations with them essentially about we label it kind of a Plan B. Unfortunately, a lot of clients have seen a reduction in revenue. So just knowing once we hit, if we're going to continue to be on this slope, if we have a certain percentage of revenue down, what are the cuts that we need to make? And it's not just necessarily employee cuts, but whether other expense cuts do we need to make in order to ensure that the company is around for the long haul to do this?

Amber Peoples
And then and I mean, that's just as important as having a typical budget, but also being able to kind of take your budget that you were forecasting for 2020 may not actually be any good anymore. Right? Kind of taking that original budget and changing the forecast so that you can read, look at everything and just understand and kind of project where you're going is vitally important right now, because with all of that, that money is gone or the time frame to apply for it's gone now. It's planning for forgiveness for that loan and making sure you have everything for after that to get through these next six months.

Tim Fitzpatrick
Yeah, well, and so it sounds like it's really important to have somebody on your team to outline kind of these waypoints where if you reach this waypoint, we need to start looking at these aspects of your business and start making changes. It doesn't mean that we need to make those changes quickly and you don't freak out about it.

Tim Fitzpatrick
It just means we're keeping an eye on these things. If we hit this threshold, this is what we need to do. If we hit this next threshold, this is what we need to do. But burying your head in the sand and ignoring it is not going to help. So having those thresholds of if this happens, this is what we need to do.

Amber Peoples
Exactly. So then and then when that threshold does hit, it takes a lot of the emotion decision making out of the picture. You've had time. You've had hopefully at least a few weeks or months to understand and it's always changeable. Actually your reaction. But then you can actually see and come to the conclusion these are the decisions we need to make. And these are the priority decisions. I mean, it might be at first the owner starts taking less of OK, right.

Amber Peoples
But everybody has to make a certain amount in order to have a living. Yes. And then once that threshold is met, then we need to make this cut or this other cut. And like I said earlier, it doesn't have to be employees, but we can also make decisions based on other expenses.

Tim Fitzpatrick
Yeah. You know, it's early on in this pandemic. I read an article I thought was fascinating. And this is really more along the HR line of things. But it was a camera, the name of the company, but it was a merchant processing company. And when this thing hit, I mean, like literally overnight, their revenue dropped like 40 percent. And they were like, OK, if we don't make some tough decisions right now, we do not have a very long runway here.

Tim Fitzpatrick
And the owners and the leadership of the company made what I think is a really great decision where they said, look, we can't make this decision in a box. We're going to put this out to all of our employees. Here's the situation, here's where we're at, what recommendations do you have and what can you do to help? And every single one of the people in that company took a voluntary pay cut, some more than others had the capability to take more than others, but everybody did it.

Tim Fitzpatrick
And that freed up the room that they needed and gave them a significant lead, larger runway to work through this, which I thought was really, really, really interesting, because it's I think the first instinct for a lot of business owners in this situation is to cut employees. I get it because it's one, if not the, it's one of the largest expenses we all have. But without our employees, we can't get a lot done.

Amber Peoples
Exactly. Yeah, and I actually have a client that every single person on their staff took a 25% pay cut. Yeah. And that was just tremendous to see all of them. There wasn't fighting, there wasn't arguments. They just did it. So it was for the betterment of the company. They knew that if they did that now, if they made the sacrifice now that they will still have a job later. So it just made it so that way they could continue to operate. And unfortunately, I have seen other I've had one other client of mine did unfortunately have to close their doors. So they just were unable to a lot of their clients were government agencies and parks.

Tim Fitzpatrick
I mean, think about how that client's employees felt though, when the decision wasn't like, you know, slammed down their throat. It was, hey, here's where we're at. What can we do as a team to make it through this? That is a much better environment to be in than an environment where people are going to work and they're like, oh, crap. Is today the day that I'm going to lose my job?

Tim Fitzpatrick
You know, I mean, there's going to be very poor engagement in an environment like that, bad productivity. Whereas, hey, those people aren't stoked about taking a 25% pay cut, but at least they feel like they are an environment where they are all in this together and they're going to work through it. And that hey're going to have much better productivity, much better engagement, retention. All of those things are going to be much, much better.

Amber Peoples
Exactly. Yeah. And it's just having those conversations with the staff, they don't need to be privy to all of the details and all the behind the scenes. But just getting some input and some discussion is actually very, very vital. But over time, you can also have discussions behind the scenes to set different marks and thresholds.

Tim Fitzpatrick
Right. Yeah, because, I mean, if you don't give your team enough information, you're just leaving things up to them and what they think is going on. And that's just not a good place to be.

Amber Peoples
Rumors are bad.

Tim Fitzpatrick
Yeah, they're very direct.

Amber Peoples
They will take all the productivity and suck the life out of it. So at least keep employees happy and engaged, that's step one to ensuring everything can continue and get back to normal.

Tim Fitzpatrick
Yeah. Yeah. And feel like they, they know what's going on. Feel like their opinion is valued. And I know that as far as our businesses grow as business owners, initially, we're very much our feeder on the street. But as our business grows and we hire more people, we're not at that. Our feet are not on the street anymore. And it's very easy to become detached from that. And so, I mean, it's really important to get the feedback from our team members that do that are talking to customers more and have a better pulse of what's going on day to day.

Amber Peoples
Exactly. And even if it's not, you're not asking every single employee their feedback. It's getting some feedback from managers because they're the ones that are going to be hearing it from every level of the company.

Conclusion

Tim Fitzpatrick
Yeah, yeah, absolutely, you got to have enough information to make good decisions. So that's awesome. Amber, I really, really appreciate the time. We've covered some great stuff and thank you for that. Where can people learn more about you and Atlas?

Amber Peoples
Our website is atlasadminservices.com. If you click on the I think I can't remember the title of the link right now, but there is a link on there so you can find my photo on there has a little bit about me. And also it has a link to my LinkedIn page as well, a little bit more feel for my background, but then also email address and phone numbers on the website as well.

Tim Fitzpatrick
Cool. If you've been thinking about outsourcing, bookkeeping, and accounting head on over the Atlas Admin Services, talk to Amber. I know and have confidence that they will get you squared away and help you accomplish what you need to accomplish. Thank you so much for tuning in. I am Tim Fitzpatrick with Rialto Marketing. If you want to gain some clarity on where to focus your marketing efforts right now, head on over to our website at rialtomarketing.com

Tim Fitzpatrick
That's R-I-A-L-T-O marketing.com. Just click on the get a free console button. I guarantee you you'll get a ton of value from it and walk away knowing exactly where you need to focus your efforts next. And just remember, marketing your business shouldn't be a challenge. All you need is a plan. Till next time. Take care.