3 Pitfalls of Big Online Bookkeeping Services

Many small businesses seek online bookkeeping services when they first start. And for many companies, those big platforms are perfect as they get going. But a lot of business owners find that those services don’t support them as they grow.

At Fisher Bookkeeping, our staff is here to serve no matter which stage of business you are in at the moment. From establishing accounting systems to providing CFO services, our team can help you keep your company’s finances in line. We have staff in Portland, OR, outside Lexington, KY, and in Barrington, IL, to keep up with our clients’ needs nationwide. Schedule a free consultation to learn more.

Growth Demands Change

Does this situation sound familiar? Your company has seen fantastic growth over the past year or so. Perhaps you’ve recently received investment funds, allowing you to grow and expand, and things are looking up. 

You’ve added several new employees who are doing phenomenal work. You’re enjoying a solid book of business, and new clients are coming in consistently to keep you and your staff busy. However, now you feel like your online bookkeeping platform isn’t keeping up with your needs.

Online bookkeeping services are often a great starting option for businesses.

This is a common issue because company growth and change naturally create shifts in your finances. Those shifts might mean that you’ve outgrown the big-box bookkeeping services. 

Sometimes, however, entrepreneurs stick with these platforms too long because they aren’t sure what to do next. When all of your data and financials are in a specific system, you may feel stuck even when it’s no longer a great fit.

The problem is that the big online services carry some pitfalls for your company as you grow. So it’s important to know what the potential issues are and when to make a change.

Pitfall #1 – Insufficient Customization

Big online bookkeeping services are most appropriate for solopreneurs that don’t experience much change. Their design is for simple, straightforward companies without complicated reporting and tracking needs. When your business grows and expands, it moves beyond a simple money-in, money-out setup and requires more sophisticated bookkeeping options.

These services offer little or no customization. For example, their profit & loss statement reporting may not reflect your business accurately. They may only provide broad categories for your expenses and income that don’t fit your needs as you grow.

Eventually, you need more than most big-box bookkeeping solutions can offer.

If customizing is available, you may have to pay much more for it. For example, many online accounting packages do not include payroll. Once you start adding employees, you’ll have to pay extra for that service. If you hire part-time, freelance, or contract employees, they may not fit into the preset system of a big bookkeeping platform.

The lack of customization also comes into play when you need to address the needs of your specific industry. Unique, niche businesses are unlikely to find the specificity they require. You will have to fit your company’s books into their system and thor preset categories. 

Pitfall #2 – No Support for Rapid Growth

Once you receive your first round of investment funding, your trajectory can change to a steep incline. You move out of survival mode and into growth mode. This type of funding requires more in-depth financial reporting, and your “starter” bookkeeping services are unlikely to keep up with the needs.

Online bookkeeping services may not be able to keep up with your needs when it's time to talk with investors.

Before receiving investor support, you need to have higher-level reporting and money management. You’ll likely be hiring employees or contractors such as a business manager or chief financial officer, and your bookkeeping service must be able to account for these changes. If they cannot, then you will need to invest in a separate payroll system.

Additionally, the big-box online services generally can’t handle Profit First accounting or complex systems. Businesses using the Profit First method require additional categories and accounts, and the bigger services usually don’t support this specialization.

A sign of healthy growth in a company is having robust systems that can support you for the long haul. Investors and partners are looking for strong, established processes, not temporary “good enough” fixes.

Pitfall #3 – Significant Bookkeeping Knowledge Required

Big online bookkeeping services heavily utilize a one-to-many model. That is, you’re unlikely to have much one-on-one help from their support desk. These platforms generally require users to have a good understanding of bookkeeping practices or the capacity to learn on their own.

If you don't have a good amount of bookkeeping knowledge, big online services may be too challenging. 

They may provide FAQs and guides on their website, but you must still navigate those yourself. You or your staff will need the time to figure out your question and then read through the guides to find an answer that fits your business. (Bonus pitfall – sometimes the appropriate answer simply doesn’t exist!)

Carefully consider your and your staff’s bookkeeping and technical know-how. Do you have a good understanding of accounting, money management, and forecasting? Do you have the capacity to pursue answers on your own when needed? Are your time and energy better spent elsewhere? (In almost every case, the answer is a resounding “yes!”)

Bookkeeping requirements frequently change, especially as your company grows. Spending time and energy navigating an insufficient accounting solution takes you away from effectively running your business. 

Moving Away from Online Bookkeeping Services

Lower-cost online starter services have a place and can work for some small businesses. However, they come with limitations and pitfalls that will become obvious as you grow. 

Outsourcing your bookkeeping to an expert will give you the robust reporting you need.

When you outsource your bookkeeping to an expert, you’ll get customized support for your specific business needs. As your company grows, shifts, expands, or takes on new partnerships, your outsourced expert can keep up with the expectations. 

Customized “offline” bookkeeping means you will have a person to talk to about your company’s growth and changes. You will have access to reporting that accurately reflects your company’s finances and supports your goals. Most importantly, you can funnel your time and energy into your business without the frustrations and distractions of an inadequate bookkeeping system. 

Whether you are establishing bookkeeping services for the first time or need to move away from a big online provider, Fisher Bookkeeping can help. Our experienced team is adept at working with funded startups and growing companies to ensure you are compliant and in a position to meet your financial goals. If you want customized, personalized support, reach out to schedule a free consultation.

About the Author Barb Fisher

Barb is the CEO of Fisher Bookkeeping, an outsourced bookkeeping consultancy that provides small businesses with a full-service financial department. Her favorite aspect of work is to break down the accounting to meaningful bits, so entrepreneurs can make a powerful difference in their own business. She's also a power lifter (squat: 215, DL: 270).

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