Outsourcing Your Accounting Could Save Your Business $30,000
As your business grows, there are a multitude of new problems you’re going to face. The most obvious are time management, maintaining client satisfaction and staying organized. For most business owners, though, staffing is the biggest hurdle he/she will face while running their business. One of the most important areas of any company is the accounting and finance team.
Although hiring an in-house accountant is a common choice, it may not be the best option for your company, especially when you consider that many tasks can now be done remotely, at any time and any place.
Here are three reasons outsourcing your accounting work makes more sense than keeping the job in-house:
#1: Outsourcing Actually Costs Less
Let’s look at a scenario where a company hires an accounts payable clerk for $50k/year base salary instead of outsourcing the role for $60k/year. Assume the company also pays a recruiter to find top talent. At first, it seems logical to go with an in-house employee instead of outsourcing. However, there are many additional costs associated with an in-house employee (please refer to the chart below).
As you can see, hiring an in-house employee for your company can cost you up to $30,000 more per year than what you would spend by outsourcing the role. Also, hiring in-house won’t just take a massive hit on your pocket book, you will also have to consider the time you will spend on an employee. Payroll administration, HR, training, etc.; these are all things you have to worry about when you hire your own employee.
By outsourcing, all you pay for is the work—nothing else.
#2: Outsourcing Provides Continuity
Consider the following example: You’ve hired the perfect candidate for your position and, at first, they’re everything you thought they could be (and more). Your customers love them, they do great work and you have time to focus on growing your business even more (instead of being bogged down by the day-to-day minutiae of running a business). Sure, you’ve spent a lot of time and money on them, but it seems like it was worth it.
Then, one day, your employee quits. All of that time, money and effort you’ve invested in them is gone and you now have to go out and hire a new person to fill their shoes. It may take weeks (or even months) to hire someone else and you’ll have to train them. What sort of effect is this going to have on your operations? How long is it going to take your new employee to be as competent in their role and familiar with your clients as their predecessor?
By outsourcing, you have moved the burden from you to the contractor. The majority of outsourcing companies will have more than one employee working on your job. So, if one of their employees quits, they have others who are equally as comfortable with your needs to fill in and take their place. The knowledge of your company’s needs won’t disappear if one of their employees decides to quit.
#3: Outsourcing Keeps You Competitive
Let’s say you’re lucky and are able to keep an employee with you for 10+ years. Sounds great, right? Maybe not.
Although you’ve avoided the problem of employee turnover, you’ve opened yourself up to a different one entirely. See, because your employee has stayed at the same job for over a decade, they will most likely know only one way of doing things: the way he/she has been doing them for the 10+ years they’ve been working for you. Even though things inside your office have remained constant for over a decade, things outside your office have likely changed dramatically. Technology has evolved and better, more efficient processes have surely been developed. By not keeping up with a forever-evolving world, you’ve sacrificed your company’s ability to remain competitive.
Any worthwhile contractor will see a wide array of businesses and stay up-to-date in their field through continuing education and conferences. Because of this, it’s in their best interest to constantly implement the best technology and systems available for your company. It’s impossible for a business to stay competitive if it is using antiquated systems and processes. Luckily, a contractor will handle this for you, meaning you will be able to concentrate on “the big picture.”