Financial Glossary
Outsourced bookkeeping
Outsourced bookkeeping is the delegation of a company's transactional accounting functions -- recording daily income and expenses, reconciling bank and credit card accounts, managing accounts payable and receivable, processing payroll, and producing monthly financial reports -- to an external firm or contractor rather than an in-house employee. The outsourced provider works within the company's accounting software (commonly QuickBooks Online or Xero) and delivers clean, reconciled books on a defined close schedule. Cost is typically lower than a full-time bookkeeper for small and mid-size businesses, and quality scales with the provider's specialization in the client's industry.
Problem & Application
An STR property management company managing 35 properties across three states attempts to maintain books with a part-time office manager who lacks accounting training. By Q3, reconciled bank statements are three months behind, two owner distribution payments were recorded incorrectly in QuickBooks, and the company cannot produce a clean P&L for its lender's annual covenant review. Transitioning to an outsourced bookkeeping firm that specializes in STR operators brings current-month close within 10 business days, establishes a standardized chart of accounts for property-level tracking, and produces monthly financial packages suitable for lenders and ownership review. The annual cost of the outsourced service is roughly 40% less than adding a full-time bookkeeper, while delivering better output and eliminating single-point-of-failure risk.
In Short
Outsourced bookkeeping provides businesses with cost-effective, accurate financial management, allowing them to focus on growth and core operations.