If you’re a small or mid-sized business owner, you have likely been aware of the benefits of outsourced accounting services and other non-core functions of your business for some time. In general, it frees up you and your staff’s time to devote to the activities your organization performs that actually help you generate income. What is often overlooked is the fact that it can really help you cut costs as well. We’re going to take a look at some of the expenses you will incur if you retain bookkeeping personnel on staff, and how outsourcing can help reduce or eliminate them:
• Wages – Obviously, if you contract the work out rather than having a regular employee, you will avoid paying their wage expense.
• Vacation/Time off/Sick Leave – Not only do you pay regular employees’ wages; they also take time off from work. Time off, both planned and unplanned, costs businesses tens of billions of dollars annually in lost productivity.
• Payroll and Unemployment Taxes – You not only pay the employee themselves, you also have to chip in the taxes on their employment to the government.
• Workman’s Compensation Insurance – Beyond taxes, you’ll have additional governmental deductions, like that for Workman’s compensation insurance.
• Benefits – Don’t think you’re done quite yet! You’ll be footing a large part of the bill for any formal benefits your employees get, such as their health insurance.
• Work and Office Space – Each person needs a place to sit, which means another desk, another cubicle or office, and more space needed in general. In urban areas, this gets expensive fast.
• Office supplies – While not a huge expense, it still should be considered. More toner, ink, paper, and other consumables will be used with each additional person in the office.
• Software & Computer expense – Licensing for essential software products is getting more expensive with each passing year. Office and the OS alone are well about $500/machine.
• 5 hours weekly managing them – Then there is the personal time investment required by either the business owner, or a manager/supervisor. Regardless of who actually does it, time will be spent supervising the bookkeeping and accounting staff.
Choosing to go with outsourced accounting services helps you avoid all these expenses. When you factor in all the extra time you have to generate additional revenue under this model, it is little wonder it has become so popular. Call your accountant today and ask if these services are right for you.