Outsourced bookkeeping and accounting services are a rapidly growing trend nationwide. The economy has shifted over the past several years and companies are looking for ways to eliminate expensive administrative overhead costs.
Business owners are downsizing their offices to decrease rental fees; more and more employees are being hired on a part-time basis. Companies are now seeking to work with outsourced companies that can provide professional services at half to a third of the price it costs a company to hire employees in-house.
Businesses are now trending towards outsourcing bookkeeping and accounting services. There is a major reason for this change, cutting costs. Companies pay an average salary of $15 per hour to $30 per hour depending on ones experience for most accounting jobs.
If a company pays $15 per hour, times 40 hours per week, it will cost that company $600.00 per week. Now take $600.00 per week times 52 weeks in a year that equals $31,200 per year. Divide $31,200 per year by 12 months in a year and you will find that it costs the company $2,600 per month to pay that employee.
Wait, what about the employees matching taxes, medical benefits, vacation pay, matching 401K if any, unproductive down time, possibly additional over-time hours, sick pay, replacement costs, hiring and rehiring to fill the position, training costs, the cost of office space, desks, computers, updating software, Christmas bonuses, insurance, the cost of security, employee theft, etc. The list goes on and it often increases costs significantly.
By outsourcing bookkeeping and accounting services with a professional accounting and bookkeeping firm, you will eliminate all these costs and cut hourly costs in half. Instead of paying $31,200 per year, your costs may well be cut as much as $15,600 per year on just the hourly costs alone. When you add an employees total overhead costs and matching taxes, outsourcing the bookkeeping functions may possibly end up saving a company an additional $800 to more than a $1,000 dollars per month.
As you can see, outsourcing the bookkeeping and accounting functions, plays a significant roll in eliminating overhead costs. Yet many small companies still require the assistance of a secretary that can answer the phones professionally and handle the administrative duties. In order to keep the secretary busy, many companies may decide to have their secretaries take care of all the bookkeeping and accounting functions.
Unfortunately, turning a secretary into a bookkeeper is a big mistake; it causes problems, errors, and creates inaccuracies. The bookkeeping and accounting functions need to be accurate for reporting and management purposes. The cost of training a secretary to be a bookkeeper is another additional cost to the company.
Often, once the secretary is trained they will then seek employment elsewhere. Outsourcing the bookkeeping and accounting functions to a company who has been trained in this field eliminates the problems associated with hiring, training, and rehiring a new employee.
A company that provides outsourced bookkeeping and accounting services must keep an accurate set of books. They are also legally responsible to act in accordance with the laws governing the handling of companies’ financials.
What about outsourcing these services to a third world country? Although this may seem like a good idea at first, companies repeatedly run into several difficulties surrounding the transfer of information and the security of their financials. Communication is also a contributing factor that causes additional strains on the business.
Outsourcing bookkeeping and accounting functions to third world countries may save businesses money at first; however, businesses take a much higher risk and it could end up costing them more latter on. When mistakes are made and a company needs an accurate set of books fast and someone they can talk to right away, outsourcing these services to another country becomes a real problem.
Hiring an outsourced bookkeeping and accounting service provider within the United States eliminates these problems. Companies can still work online remotely but with higher levels of security, that if compromised, can be prosecuted within the legal boundaries of our U.S. Government. Communication, timeliness, and accuracy of information will also improve dramatically.
If your business is looking for ways to cut costs without loosing the professional services you trust and expect, consider using outsourced bookkeeping and accounting services as an alternative strategy in today’s economy.
Professional Accounting Solutions provides outsourced bookkeeping and accounting services for small to medium size businesses with 50 employees or less. Contact us today for pricing and a free business analysis at www.TheProfitExperts.com.Contact Us Today!