As your business grows, your financial administration needs become more complex. From organizing and filing taxes to managing document storage to making sure bills are paid on time, it can become too much alone. Eventually, you find yourself doing a juggling act — running the company and managing the finances (even if there are some things you may be missing).
This can’t be a long-term solution, and you’re aware that you need help in the form of hiring for financial services. But the problem is, hiring help costs money.
How do you know which route is the most cost-effective and worth it? Outsourcing financial services or hiring an internal team? We’re going to break that down for you here.
The Cost of Hiring an In-House Accounting Team
Hiring an in-house accounting person or team may bring with it some perks: complete control over staffing decisions, more personal relationships, and the ability to decide what technology the staff uses. But, this approach also generates a handful of costs that could otherwise be avoided with outsourcing:
- Paid time off
- Payroll tax
- Health insurance
- Workers’ comp.
- Sick days
With all of these in mind, the 2019 median pay for an accountant, according to the Bureau of Labor Statistics, was $71,550 per year.
And that’s not even including other costs required to support them daily, such as training and development, office upkeep, investment in software and tech, an IT team, and time spent managing them. After all, time is money — and having an internal team costs a lot of time.
The risk associated with hiring an internal team also isn’t worth it to many business owners. By hiring one or more internal employees (who could just be self-taught with little to no experience), you may be risking the costs associated with:
- Fraud and embezzlement
- Unreliable financials
- Employee turnover
- Lost productivity
To many, these risks are not worth it. The unpredictable isn’t worth your business’ success. Now, let’s talk about the other side of the coin.
The Cost of Outsourcing Your Financial Administration Services
Outsourcing your financial services means a more hands-off approach to your business finances, but it also means you’re able to trust who you’re handing it off to. Hiring an outsourced team looks like this: access to seasoned and trained personnel who take care of every aspect of business finances in the most compliant, organized way.
Hands down, outsourcing your accounting needs is more cost-effective. Not only are you getting an entire team of experts at your disposal (rather than just one or two), the fees are considerably lower than in-house bookkeepers, starting around $400/month, on average.
Ultimately, outsourcing eliminates the above costs associated with paying an internal employee — and it eliminates the risks. Other reasons it’s worth it:
- You can rely on expertise
- Outsourcing is flexible and scalable to what you need
- You only pay for what you need
- You regain the ability to focus on core business functions
- You see a higher return on investment
- Your outsourced team is 24/7 — not 9 to 5
- You can trust in the increased data security
Where to Direct Your Spend
Which option gives you more peace of mind? Take some time to think it over and look at the numbers. We hope this helped you see the truth behind the costs to feel more confident in your next steps.
To further explore what outsourcing may look like financially for your business, please reach out to us.