As a business owner, you want to feel like you're in the driver's seat of the business. You want to be sure everything is working smoothly. The best way in your mind to do that is to take control of all aspects of the business.
This includes your bookkeeping and accounting processes. While hiring in-house workers definitely has its benefits, the downsides cannot be ignored. There are some major problems that arise when considering in-house bookkeeping and accounting.
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Here are 4 common problems that arise with in-house bookkeeping and accounting:
1. It's far more expensive
Hiring an in-house bookkeeper or accountant is much more expensive than outsourcing. It takes a significant amount of time to recruit, screen, and onboard a new hire.
Another option is to hire a recruiter, which can run up to 30% of the employee's salary. And then there are other costs to consider, such as an employee's salary and benefits package. Not to mention the cost of training and contractual obligations.
When you outsource, you pay a single fee for a team of specialists and other benefits. The cost of services, which is much, much lower than that of a new employee.
2. Quality of work is often lower
Bookkeeping and accounting are not easy tasks. They require strong mathematical skills, extensive experience, and keen attention to detail to master.
Unless you are willing to spend big bucks on hiring a team of accounting and bookkeeping staff, you're likely to have one or two persons dedicated to the tasks.
This presents an issue in work quality. One or two bookkeepers may not have the insight or experience necessary to deliver top quality work. As a result, they are more prone to costly mistakes. And worse—without proper insight and experience, these mistakes often go unnoticed until it's too late.
An outsourced bookkeeping firm gives access to a fully trained team of experts. Teamwork and experience combined in an affordable package.
3. Outdated training
Accountants need constant training to stay relevant and useful in their roles. This includes staying updated on changing technology, as well as changing financial laws.
You may have taken great care when hiring an in-house accountant. To make sure they have the needed certifications, experience and so on. But all training becomes outdated at some point. Hence the need for constant training.
With the heavy workload of a single in-house accountant, or a small team, it can be tough to find the time for skills training.
An outsourced accounting firm has larger teams of specialists, and thus more flexibility for training their staff. These companies make it their priority to keep their teams updated on technology and laws. It's one of their biggest selling points.
4. Inability to scale as needed
You have a small business. So you reason that it makes sense to just hire one in-house accountant. After all, there's not too much going on with your finances right now.
But what happens as your business grows? Your finances start changing. And the demands on your accountant increases. This continues each time your business scales up. And therein lies the problem.
It takes a lot of time to build a qualified team of accountants. This means that your accounting needs are growing much faster than you can find employees. So the business is not able to scale as fast as possible.
Outsourcing your accounting team fixes that. When you outsource, you have the freedom to scale up or down whenever you need to. Often all that's required is a change in the package you're paying for. Simple as that.
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