Outsourcing and hiring within each have their benefits.
Let's start with hiring within. Hiring a bookkeeper/accountant on staff means you have someone in your office at least part-time. This gives you face-to-face time all day to discuss the handling of your books, your payroll, or your customer invoices. For some businesses this makes sense. A business with a significant amount of transactions, such as customer invoices, or multiple segments and accounts need someone to be hands on day-to-day. And then there's the comfort factor of seeing someone sitting at a desk in your office.
Then there's the downsides to hiring an on-staff bookkeeper/accountant. Do you have a physical desk for them to sit at, that affords some measure of privacy so not everyone can see your bank account being reconciled? How about a computer, a mouse, a keyboard and at least one computer monitor?
Let's think about their salary, a part-time bookkeeper is at least $35,000/year, plus payroll taxes on top of that. An accountant with at least 1 degree in accounting is at least $60,000/year and a CPA is at least $90,000/year! And then there's the benefits they'll be asking for. Cha-ching?!
And how do you even decide between a bookkeeper, an accountant or a CPA? (Let me stop you right there, we can have a discussion to figure out which one is right for your business if you're truly ready to hire a staff person and I'll be happy to help with the process) Their level of experience weighs heavily on what kind of services they're going to provide and what kind of assurances you're going to need about the measure of analysis you'll want on your books.
Now, how about outsourcing... This is a great option for the independent business owner in the modern work environment. Many larger companies are recognizing the ability to be fully functional with out an employee at their desk, whether simply working from home in the same city or working out of a satellite office in a whole other state. Face-to-face communication is easily replaced by many opportunities for communication including the phone as well as instant messenger options.
Outsourcing also provides the independent contractor relationship that is so beneficial at tax time. A 1099 to document the fees paid at year-end, and all other benefits are waived in this relationship. No management healthy benefits or payroll taxes every 2 weeks. Fees paid are negotiated by set monthly services or can be hourly with time reports submitted at the end of every month. This nearly always means a reduction in fees versus salary costs because you're only paying for the work being done, not obligated to a salary regardless of the amount of work being produced. This also benefits cyclical businesses that rely on hourly services so the amount of work needed in December may vary compared to June.
Outsourcing provides a level of continuity because the vendor-client relationship is mutually beneficial to both parties. The outsourced individual will get to customize their work hours and is responsible for their own computer, monitors, and desk. Where as the business owner can only focus on their deadlines for their business and not have to worry about any additional cash outlay for those physical assets. Deadlines between the parties are negotiated based off of demand and need without violating any independent contractor qualifications for tax time.
As for hiring a bookkeeper, an accountant or a CPA, it's going to come back to what services are you ready to pass off to someone else to manage and what level of certainty do you need in that work. I would love to have that discussion with you and will honestly help give you my opinion. I don't believe in signing up with a customer unless it's truly the right fit for both of us. And if you think you're ready to hire your own staff person, I would be more than happy to help you get through that process.
Give me a call or email today and let's get that discussion going!