If you own a small business, interested in minimizing a portion of your payroll, considering outsourcing your current bookkeeper or accountant, and someone in your family is not working, outsourcing to family may be a viable alternative for you.

Outsourcing your company’s accounting functions may result in reduced labor costs or the conversion of fixed costs to variable costs, insurance,benefits and some tax savings, etc. Before you begin outsourcing, you need to invest in a quality scanner or fax machine and maybe even a high volume scanner or fax machine,depending on the volume and frequency of documents to be scanned. Scanning or faxing is necessary because all of the source documents(i.e. bank statements,vendor bills,customer invoices, etc.) have to be sent either by email or fax to the outsourced accountant to record your company’s accounting transactions.

As a business owner or the person responsible for the financial department, you must also make sure there is a process in place to monitor the activities of the outsourcing company. An important consideration is that outsourcing may make sense, as long as a competent and independent person oversees and monitors the financial results on behalf of the small business owner.

We often read that that if you outsource, some of your business accounting functions to a foreign country, then your labor costs will decrease as compared to what you would generally pay in the United States. In these uncertain times, when small business owners are facing survival issues resulting from lost sales, skyrocketing costs, contraction, often exacerbated by family unemployment, then it may make sense to give thought to employing a family member to help with the small business accounting. By employing a family member in your house or outsourcing your accounting function with family in a distant location, rather than outsourcing to another country, you may actually help the U.S. economy, in your own way, by keeping jobs in this country. A baby step,but certainly the right one for our country. This idea works, if the owners or members of the owner’s family can learn QuickBooks, or another comparable online accounting software program. It’s helpful, if the family member has some basic financial knowledge to undertake this responsibility of entering the financial information into an online accounting software. Given the current economy in the United States, there are situations where family members are now unemployed and are now ready, able and available to help and make a positive contribution to the family business.

Quite frankly,QuickBooks Online Plus is simple enough that with proper training, most detail oriented people with common sense can handle QuickBooks, as long as a CPA or accountant is available to ask questions,and there is mechanism to allow for real time or after the fact corrections or adjustments to the accounting records.

Under either alternative, outsourcing to a foreign country or outsourcing with a family member, an accountant or CPA is the ideal person to monitor either in real time, or after the fact i.e. monthly or quarterly financial information, and to check that the reconciliation process is working and more importantly,that outsource team or family member,are doing their job.

With the proper QuickBooks Online version or any other QuickBooks version with remote access from a desktop PC, the monitoring process can be accomplished for outsourced accounting departments, whether the outsourced department is in another location or is outsourced to family.

Before making any decision about outsourcing, it is recommended that you first speak to your CPA or accountant in order to determine if whether or not outsourcing is appropriate for your particular business. The CPA or accountant can also help access the skill of the person to provide the outsourced service.

This concept of outsourcing to one or two family members may not work for a large or mid size business. However, if you own a small business, interested in effectively reducing a portion of your payroll costs, have decided or thinking about outsourcing your current bookkeeper, and someone in your family is unemployed, outsourcing may be right for you. Once again, this will work as long as the outsourced family member is properly supervised and monitored by a CPA or accountant. In the beginning there may be more time required by your CPA or accountant to train and to oversee as compared to time that your accounting professional currently spends each month or quarter. In the long run, the amount of time required by your accounting professional should diminish. Notwithstanding, some time will always be required of your accounting professional to monitor the activities of the outsourced person.