One of the decisions that any small business owner must make is what resources to keep in-house and which ones can be outsourced to a trusted partner. This is certainly true when it comes to keeping the financial records for the business. There are pros and cons associated with each choice. By taking a good look at what each approach can provide, you can come up with the right solution for your business.
Considering the Idea of Outsourcing
There is no doubt that choosing to outsource the accounting functions will provide some immediate benefits. You can operate with a smaller staff. That means less wages or salaries to cover out of the company’s revenue stream. There are also fewer employees who receive health insurance, pensions, vacation days, and all the other benefits that come with full-time employment.
In place of those expenses, you pay one set fee to your outsource partner each month. In return, you receive all the support that is outlined in the contract as being standard and reasonable. If you do need something above and beyond the typical accounting functions, those services are often provided at discounted rates.
Another point in favor of outsourcing is that you do not have to pay for accounting personnel to attend seminars and workshops to stay on top of the latest tax changes or new regulations about withholding. Along with the cost of those events, you would need to hire temporary help to keep things going while the staff is away. If you outsource all your accounting functions, everything stays up to date no matter what.
Are There Benefits to Keeping the Accounting in House?
There are times when it does make sense to keep all accounting functions in-house. This is especially true with the payroll. When there are changes to make, such as approving a sick day for pay, or changing the salary or hourly wage of an employee, it can be done on the spot. That helps if you want to make the change retroactive and apply it to the current period.
Most outsource partners do require some advance notice of changes to the payroll. Unless you have the change in by a certain time on Tuesday, it may not apply to the payroll calculated on Thursday and direct deposited to employee bank accounts on Friday. If the payroll is done in-house, the chance can be made immediately and the raise will be included on those Friday checks.
When it comes to determining which approach is best, the only option is to sit down and take a good look at the business model. Compare the costs and the conveniences of each strategy, and determine which one will help the business remain financially stable and allow room for growth. Remember that as the business does grow and your needs change, there is always the chance to take a second look.
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