As an Australian business grows, managing financial records can become increasingly time-consuming.
What starts as a few invoices, expenses and bank transactions can eventually become hundreds or thousands of transactions each month. At the same time, business owners need accurate financial information to manage cash flow, prepare BAS, monitor profitability and make informed decisions.
This is where outsourced bookkeeping services can provide valuable support.
Instead of hiring and managing a full-time internal bookkeeper, businesses can outsource bookkeeping tasks to an external professional or accounting team. This can provide access to bookkeeping expertise while allowing the business to scale its finance function according to its needs.
For growing businesses, outsourced bookkeeping can also work alongside accounting and CFO support.
CFO and Tax Advice provides accounting and financial services for Australian businesses, including Accounting Services and CFO Services.
What Are Outsourced Bookkeeping Services?
Outsourced bookkeeping services involve engaging an external professional or service provider to manage some or all of a business’s bookkeeping activities.
Depending on the provider and the business’s requirements, outsourced bookkeeping may include:
- Recording financial transactions
- Bank reconciliation
- Accounts payable
- Accounts receivable
- Invoice processing
- Expense tracking
- Payroll support
- Financial record maintenance
- GST coding
- BAS preparation support
- Management reports
- Account reconciliation
The exact scope varies between providers.
Some businesses outsource only basic bookkeeping tasks, while others outsource most of their day-to-day finance administration.
The Australian Government’s business.gov.au guidance on getting help for your business notes that businesses can outsource tasks such as bookkeeping when they are time-consuming or require specialist skills.
Why Are Australian Businesses Outsourcing Bookkeeping?
There are several reasons a growing Australian business may choose bookkeeping services outsourcing.
1. Save Time
Bookkeeping can consume a significant amount of time when business owners or employees manage it alongside their main responsibilities.
Tasks such as:
- Matching transactions
- Reconciling bank accounts
- Processing invoices
- Tracking expenses
- Following up unpaid invoices
- Maintaining financial records
can take time away from sales, customer service and business development.
Outsourcing these activities allows internal teams to focus on higher-value responsibilities.
2. Access Bookkeeping Expertise
A business owner may understand their industry extremely well without being a bookkeeping specialist.
An outsourced bookkeeping provider can bring experience with:
- Accounting software
- Reconciliation processes
- Financial records
- Accounts payable
- Accounts receivable
- GST coding
- Month-end processes
This can help create a more consistent financial administration process.
3. Improve the Quality of Financial Records
Accurate bookkeeping provides the foundation for reliable financial reporting.
When transactions are recorded and reconciled consistently, businesses can have a clearer view of:
- Revenue
- Expenses
- Debtors
- Creditors
- Cash position
- Profitability
This information can then support accounting, compliance and strategic financial decisions.
4. Reduce the Administrative Burden
As a business grows, financial administration can become increasingly complex.
An outsourced bookkeeping service can take responsibility for recurring tasks so that business owners do not have to manage every transaction themselves.
This can be particularly valuable when the business does not yet have enough work to justify a full-time internal bookkeeper.
Outsourced Bookkeeping vs In-House Bookkeeping
Both models can work well depending on the business.
| Outsourced Bookkeeping | In-House Bookkeeping |
|---|---|
| External specialist manages agreed tasks | Employee manages bookkeeping internally |
| Can scale with business needs | Dedicated internal resource |
| Access to external expertise | Greater direct internal control |
| Flexible service arrangements | Fixed employment commitment |
| May reduce recruitment requirements | Internal employee learns the business closely |
| Useful for growing businesses | Useful when bookkeeping workload is substantial |
There is no universally correct option.
The right approach depends on transaction volume, complexity, budget, internal expertise and how much control the business wants over its finance function.
What Do Outsourced Bookkeeping Services Usually Include?
The scope depends on the provider and the needs of the business.
Bank Reconciliation
Bank reconciliation involves comparing accounting records with bank transactions to identify discrepancies, missing entries or other issues.
Regular reconciliation can help keep financial records up to date.
Accounts Payable
Bookkeeping support may include recording supplier invoices, tracking amounts payable and maintaining an organised accounts payable process.
Accounts Receivable
An outsourced bookkeeper may also help record customer invoices, monitor outstanding amounts and maintain accounts receivable records.
Expense Management
Business expenses can be recorded and categorised so that the accounting records accurately reflect business activity.
Payroll Support
Depending on the provider, bookkeeping services may include payroll administration and related record keeping.
Businesses should confirm exactly what payroll-related services are included in the engagement.
GST and BAS Support
Bookkeeping can help maintain the financial information required for GST reporting and BAS preparation.
However, businesses should understand the distinction between bookkeeping and BAS services.
The Tax Practitioners Board (TPB) states that entities providing BAS services for a fee or other reward generally need to be registered with the TPB unless an exemption applies. Businesses can use the TPB Public Register to verify a practitioner’s registration.
What Are the Benefits of Outsourced Accounting and Bookkeeping Services?
For some businesses, bookkeeping is only one part of a broader finance requirement.
An outsourced accounting and bookkeeping service may combine:
- Bookkeeping
- Financial reporting
- BAS support
- Compliance support
- Management accounts
- Budgeting
- Financial analysis
This can reduce the need to coordinate multiple providers.
For businesses that need broader support, Accounting Services can complement outsourced bookkeeping.
The advantage of combining these services is that accounting decisions can be based on financial records that are maintained consistently throughout the year.
Fractional Accounting: A Flexible Alternative
The concept of fractional accounting is similar to fractional CFO support.
Instead of employing a full-time accounting professional, a business accesses accounting expertise on a part-time or outsourced basis.
Fractional accounting may be suitable for businesses that:
- Need regular accounting support
- Do not require a full-time accountant
- Want to control finance costs
- Need more expertise than basic bookkeeping
- Are growing but are not ready for a large internal finance team
For example, a business could outsource day-to-day bookkeeping while using an accountant for financial reporting and tax matters.
As the business becomes more complex, it could then add CFO Services for strategic financial planning and decision support.
This creates a flexible finance structure without requiring the business to immediately build a large internal finance department.
When Should a Growing Business Outsource Bookkeeping?
There is no single revenue threshold at which a business should outsource bookkeeping.
Instead, consider the operational workload and the amount of time your team is spending on financial administration.
You may want to consider outsourcing if:
- Bookkeeping is taking too much of your time.
- Transactions have increased significantly.
- Your records are falling behind.
- Bank reconciliations are not completed regularly.
- Invoices are not being processed consistently.
- You are unsure about your current cash position.
- BAS preparation is becoming stressful.
- You are spending more time on administration than business growth.
- You are not ready to hire a full-time bookkeeper.
Outsourcing can be particularly useful when the business needs consistent bookkeeping but does not yet have enough work to justify a dedicated internal employee.
How Outsourced Bookkeeping Can Support Business Growth
Better Visibility Over Cash Flow
Up-to-date financial records can make it easier to understand money coming into and leaving the business.
This can help management identify potential cash flow issues earlier.
More Time for Business Owners
Removing recurring bookkeeping tasks from the owner’s workload can create more time for:
- Customers
- Sales
- Marketing
- Operations
- Business development
- Strategy
More Consistent Financial Processes
An outsourced bookkeeping team can establish recurring processes for:
- Transaction recording
- Reconciliation
- Invoice management
- Expense processing
- Month-end close
Easier Financial Reporting
Accurate bookkeeping provides the foundation for financial reports.
This can make it easier for accountants and CFOs to analyse the business.
Scalable Finance Support
A business can often increase or decrease outsourced support as its needs change.
This can be useful during periods of rapid growth, seasonal changes or restructuring.
Outsourced Bookkeeping Services vs Outsourced Accounting
These terms are sometimes used interchangeably, but they can describe different levels of support.
Bookkeeping
Bookkeeping generally focuses on maintaining financial records and processing day-to-day transactions.
Typical tasks may include:
- Recording transactions
- Bank reconciliation
- Invoice processing
- Expense categorisation
- Accounts payable
- Accounts receivable
Accounting
Accounting can involve broader activities such as:
- Financial reporting
- Compliance support
- Financial analysis
- Budgeting
- Financial planning
- Business advice
A business may therefore use both outsourced bookkeeping and accounting services.
The key is to understand exactly what each provider is responsible for.
How Much Do Outsourced Bookkeeping Services Cost?
There is no single price for outsourced bookkeeping services in Australia.
Pricing can depend on:
- Number of transactions
- Number of bank accounts
- Business structure
- Payroll requirements
- Accounting software
- Frequency of service
- Level of reconciliation required
- Accounts payable workload
- Accounts receivable workload
- Reporting requirements
Some providers charge hourly rates, while others use monthly packages or fixed service fees.
Rather than comparing providers based only on price, compare:
- What tasks are included
- How frequently the work is completed
- Who performs the work
- What software is used
- What reporting is provided
- Whether support can scale with the business
A lower monthly fee may not represent better value if important bookkeeping tasks are excluded.
How to Choose an Outsourced Bookkeeping Provider
1. Check Their Experience
Look for experience with businesses similar to yours.
Industry familiarity can be useful when your business has specific transaction, payroll or reporting requirements.
2. Understand the Scope
Ask exactly what is included.
For example:
- Bank reconciliation?
- Accounts payable?
- Accounts receivable?
- Payroll?
- GST coding?
- BAS support?
- Monthly reports?
Do not assume that every provider offering “outsourced bookkeeping” includes the same services.
3. Check Their Technology
Ask which accounting platforms they work with.
A good outsourced bookkeeping process should integrate efficiently with your existing systems.
Consider whether the provider can work with your current accounting software rather than requiring you to completely change your workflow.
4. Ask About Security
Financial records contain sensitive business information.
Ask how documents, accounting access and financial data are protected.
You should also understand who has access to your accounting systems and how access is managed when employees or contractors change.
5. Understand Communication
Find out:
- Who will be your main contact?
- How often will you receive updates?
- How quickly can questions be answered?
- How are missing documents handled?
- How will urgent issues be communicated?
Clear communication is particularly important when bookkeeping supports BAS preparation and month-end reporting.
6. Check Scalability
Your bookkeeping requirements may increase as your business grows.
Ask whether the provider can increase the level of support without requiring you to change providers.
For example, you may initially need monthly bookkeeping but later require weekly processing, payroll support, accounts receivable management and monthly reporting.
How Outsourced Bookkeeping Works
A typical outsourced bookkeeping process may look like this:
Step 1: Assess Your Current Records
The provider reviews your existing bookkeeping setup and identifies outstanding issues.
This may include checking bank accounts, accounting software, outstanding reconciliations and existing processes.
Step 2: Connect Accounting Systems
The relevant accounting software and financial accounts are connected.
The provider establishes the appropriate access and workflow for managing the records.
Step 3: Establish a Bookkeeping Workflow
The provider establishes processes for:
- Transaction recording
- Reconciliation
- Document management
- Invoice processing
- Expense management
Step 4: Maintain the Records
Transactions, invoices, expenses and other financial information are processed regularly.
Step 5: Reconcile Accounts
Bank and other relevant accounts are reconciled to help maintain accurate records.
Step 6: Provide Reports
Depending on the service, the business may receive financial reports and management information.
Step 7: Coordinate With Your Accountant or CFO
The bookkeeping information can then support compliance, BAS preparation, financial reporting and strategic financial analysis.
How Outsourced Bookkeeping Supports BAS Preparation
Good bookkeeping can make BAS preparation more efficient because the underlying financial records are maintained throughout the reporting period.
For example, regular bookkeeping can help ensure:
- Transactions are recorded
- GST codes are applied consistently
- Bank accounts are reconciled
- Expenses are categorised
- Relevant documentation is retained
- Outstanding issues are identified
However, businesses should distinguish between maintaining records and providing BAS services.
The TPB defines BAS services as services relating to determining or advising on a client’s liabilities, obligations or entitlements under BAS provisions, or representing a client in certain dealings with the Commissioner of Taxation where the client can reasonably be expected to rely on the service.
If an outsourced provider is also preparing or lodging BAS for a fee, check that the appropriate BAS agent registration requirements are satisfied.
Outsourced Bookkeeping for Growing Australian Businesses
Outsourcing can be particularly useful for businesses experiencing growth.
As transaction volumes increase, the business may need more frequent bookkeeping and stronger financial processes.
For example:
Small business
Bookkeeping may involve:
- Monthly reconciliation
- Expense recording
- Invoice processing
Growing business
The business may add:
- Weekly bookkeeping
- Accounts payable
- Accounts receivable
- Payroll
- GST reconciliation
- Monthly reporting
Established business
The business may require:
- More detailed management reporting
- Budgeting
- Financial analysis
- Cash flow forecasting
- Finance team oversight
- CFO support
This means outsourced bookkeeping can form part of a scalable finance model rather than being viewed simply as an administrative service.
When Should You Add a Fractional CFO?
Bookkeeping is primarily about maintaining accurate financial records.
A CFO’s role is different.
A business may consider fractional CFO support when management needs help answering questions such as:
- Why is cash flow declining?
- Which products or services are most profitable?
- How much can we afford to invest?
- Can we afford to hire more staff?
- What will cash flow look like over the next 12 months?
- Should we raise capital?
- Are we ready to expand?
- What KPIs should management track?
At this point, the business may benefit from adding CFO Services alongside bookkeeping and accounting.
This creates a potential finance structure:
Bookkeeping → Accounting → CFO
Each level addresses a different business need.
A Scalable Finance Model for Growing Businesses
A growing Australian business does not necessarily need to build a large finance department immediately.
Instead, it can gradually increase financial support as the business develops.
Stage 1: Bookkeeping
Focus on:
- Transaction recording
- Reconciliation
- Invoices
- Expenses
- Financial records
Stage 2: Accounting
Add:
- Financial reporting
- Compliance support
- BAS support
- Financial analysis
Stage 3: Fractional CFO
Add:
- Cash flow forecasting
- Financial modelling
- Budgeting
- KPI analysis
- Strategic planning
- Board reporting
- Business performance analysis
This approach can provide access to the right level of expertise without immediately building a large internal finance team.
Questions to Ask an Outsourced Bookkeeping Provider
Before signing an agreement, ask:
- What bookkeeping tasks are included?
- How frequently will my accounts be updated?
- Are bank reconciliations included?
- Are accounts payable and accounts receivable included?
- Is payroll support included?
- Is GST coding included?
- Does the service include BAS preparation or lodgement?
- Which accounting software do you support?
- Who will manage my account?
- How quickly will questions be answered?
- How is financial information protected?
- Can the service scale as my business grows?
- What happens if additional work is required?
- Are there separate charges for year-end or BAS-related work?
These questions can help you compare providers based on the actual service, rather than the advertised price.
Frequently Asked Questions
What are outsourced bookkeeping services?
Outsourced bookkeeping services involve engaging an external professional or business to manage some or all of your bookkeeping activities.
This can include transaction processing, bank reconciliation, accounts payable, accounts receivable, expense management and other financial administration.
Is outsourced bookkeeping suitable for small businesses?
Yes.
It can be useful for businesses that need bookkeeping support but do not yet require a full-time internal bookkeeper.
It can also allow a business to increase its bookkeeping support as transaction volumes grow.
What is the difference between bookkeeping and accounting?
Bookkeeping generally focuses on recording and maintaining financial transactions, while accounting can involve broader activities such as financial reporting, compliance obligations, analysis and financial advice.
What is fractional accounting?
Fractional accounting involves accessing accounting expertise on a part-time or outsourced basis rather than employing a full-time accountant.
It can provide a flexible option for businesses that need more support than basic bookkeeping but do not require a full-time accounting employee.
Can outsourced bookkeeping help with BAS?
Yes, outsourced bookkeeping can help maintain the financial records used for BAS preparation.
However, businesses should confirm the provider’s registration and authorised scope if they are also providing BAS services for a fee.
The TPB’s BAS services guidance explains what constitutes a BAS service and the registration requirements that can apply.
When should I outsource bookkeeping?
Consider outsourcing when bookkeeping is consuming too much time, records are falling behind, transaction volumes are increasing or the business needs more consistent financial processes.
Can outsourced bookkeeping scale with my business?
Yes.
One of the potential benefits of outsourcing is that the level of support can be adjusted as the business’s transaction volume and financial requirements change.
Final Thoughts
Outsourced bookkeeping services can give growing Australian businesses access to financial administration support without immediately building a large internal bookkeeping team.
The potential benefits include:
- Saving time
- Accessing specialist expertise
- Improving financial record keeping
- Reducing administrative workload
- Supporting accurate financial reporting
- Creating a scalable finance function
However, businesses should look beyond price when choosing a provider.
Consider the provider’s experience, technology, scope of services, communication, security and ability to support your business as it grows.
If the provider will also prepare or lodge BAS for a fee, verify that the appropriate BAS agent registration requirements are met. The TPB Public Register can be used to check registered tax and BAS practitioners.
For businesses that need more than bookkeeping, CFO and Tax Advice provides broader Accounting Services and CFO Services that can complement outsourced bookkeeping.
A scalable finance structure can allow a business to move from basic bookkeeping towards reliable financial reporting and eventually strategic financial leadership as its needs develop.
Looking for outsourced bookkeeping support? Start by defining which financial tasks you want to outsource, what reporting you need and how much support your business is likely to require as it grows.
If you would like to discuss your bookkeeping and accounting needs, book a meeting with CFO and Tax Advice to explore the right support for your business.
.
