Should I Outsource?
More and more business owners are open to outsourcing parts of their business functions as it is more cost-effective. However, they consistently question whether to outsource their financial department. Questions relate to; the main difference between bookkeepers and accountants; whether they would be beneficial to outsource their company’s bookkeeping, accounting, or both; and determining which is more cost effective – in-house bookkeeping/accounting or outsourced?
We believe that outsourcing could be the optimum way for any business to handle their bookkeeping and accounting needs these days. It’s also the very best way for small businesses to see rapid and successful growth based upon our experience seeing many successful examples in entrepreneurs’ world.
For starters, they can’t afford to hire an in-house person, especially for professional services such as an outsourced CFO, law firm, consulting etc. Outsourcing can help run any business more efficiently. It also frees up the company’s main team to focus on processes that can generate sales and gives them the ability to allocate company resources to areas that bring more value to the business as a whole. In addition, outsourcing can assist any business to reach more potential buyers and increase inventory production, while also bringing about major improvements in the digital-retail experience.
Best of all, business owners get more guidance and expertise for their money, along with improved peace of mind due to getting bookkeeping and accounting support that is both reliable and responsible.
Which is more Cost-Effective – In-house or Outsourcing?
It is time to delve into the meat of the matter, which is, of course, money. Business owners can hire a bookkeeper, accountant, or both in-house to keep up with all of their accounting issues. However, it’s important to understand that outsourcing is always cheaper than in-house. One of the main reasons is that in-house employees will cost an additional 20 percent above the actual hourly or salary cost. In addition, in today’s business world, when somebody is hired for these positions, the company could end up paying for 40-hours a week when their productivity is probably only somewhere between 20 and 30-hours per week which is a waste of money.
What’s the Difference Between Bookkeeper and Accountant?
There’s a misconception that accounting and bookkeeping are one and the same. Both work at assisting business owners with their business finances, however, there are several significant distinctions between what bookkeepers actually do as opposed to what accountants do.
Even the terminology is quite literal. Bookkeepers basically just keep the books for the purpose of retaining documentation for all transactions. On the other hand, accountants are actually part of the process of dealing with bills and invoices as well as report-generation and analysis. Often, the accountants and bookkeepers work together as a team. Bookkeepers operate with their feet on the ground to record expenses correctly, while accountants manage books and provide the business owner with financial data to run the business. High-level accounting work may involve financial analysis, various business reports, business process design and build etc. At DeepSky, we provide outsourced CFO services and outsourced accounting services to give you all the financial literacy you need for management.
How Much Does Outsourcing Accounting Cost?
Accounting Budget Based on Level of Service
This question depends on what level of service that business owners could expect and for how much.
- A basic fee of $500/month: A basic set of books for getting your tax return done.
- Pro: File tax
- Con: No value for management
- $500-1,500/mo: Automated book/Accounting Service
- Pro: A good set of book
- Con: A lot of back and forth
- $2,000 – $6,000/mo
- Pro: A good set of books, more hand-holding. The more money you pay, the more strategic services you’ll get, including what metrics are currently being tracked, what numbers we’re looking at, and what reports are being generated.
- Con: Higher price
Bonus: How to Find a Suitable Outsourcing Services Provider?
Business owners should seek out an outsourcing firm that Biophilic Design Principles and Examples will always speak to you in plain text, especially the ones that require expertise. Outsourced CFO service, for example, we know all too well that accounting/numbers can often sound like a whole lot of gibberish to you and it’s in vain if we fail to communicate the numbers to our client.
At DeepSky, we always want all of our clients to feel free to tell us that they simply don’t understand something. If you buy into outsourcing, and you are excited about finding a partner to grow your business, find a partner that will hand-hold you throughout the process, and will hold you accountable.
Contact us today or give us a call at (949) 200-6829.