All about outsourcing your business finances
When a small business is just beginning many business owners feel overwhelmed by the many demands that they have on their time and energy. Besides all of the day to day operations of your business, owners find that they must manage all of the finances of their business, as well. This can include everything from bookkeeping to paying taxes. However, as your business gets larger the business finance functions will get larger and more complicated also.
This leaves many business owners trying to decide what options they have in order to best manage their business finances. One of the most commonly considered options is using outsourcing. However, there are different factors that you should first consider. Here are the factors to consider when trying to determine if you should outsource your business finances-
- What are the overhead costs?Most business owners think that when they need additional bookkeeping help they should hire in house employees. However, business owners need to realize that any full time employee can cost their business up to 30% more then just their wages. This is because there are certain overhead costs that come with hiring an employee. This is why outsourcing can be a cost effective option to consider. It is also important to realize that not only will you need to hire an employee to manage bookkeeping but you will also need to provide them with the appropriate software. This can be a considerable cost, as well. If you decide to outsource your bookkeeping the firm that you hire should have all of the needed software. In addition, to software costs you should factor in training cost as well as retraining costs if the employee needs considerable time off or decides to suddenly leave your business.
- Can you keep up with the technology? The reality is that like most other fields business finance is highly tech driven. This means that it is dynamic and savvy business owners need to be able to respond with a change in technology. Many smaller businesses cannot afford a technology change every time something new emerges in the field of business finance. You can avoid having to take on this cost if you decide to outsource the finances of your business to someone else. Many business owners report that this is one of the major benefits to outsourcing.
- How much money will you save? Savvy business owners know that everything they do should add to the profitability of their business. You need to have a clear idea of exactly how much money you will save by outsourcing your business finances. This figure should then be compared against what it would cost to take care of the finances, in-house. Keep in mind that the needs of every business are highly unique so what is right for the business down the street may not be right for your business. You should get several different quotes from multiple outsourcing firms before you make a final decision. Keep in mind that the quote will be work driven meaning that the more functions that you want to turn over to them the higher the price they will quote you.
- How much time will you save? In business the old adage of "time is money" really is true. If you are spending time on a particular function than the cost of that time will have to be taken away from doing something else. This makes it crucial to determine how much time you will save by outsourcing your business finance function. Remember, that the more time you have the more you can dedicate to making your business profitable.