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Do you need to outsource your business finances?

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When a business, is in its initial stages of development, the business owner often finds himself wearing a large number of hats. If you are a business owner of a new business, you may not just be running you business, but also managing all aspects of the business finances. This can be anything from paying the taxes, to keep the books. However, as most businesses grow, business owners find that they don't have time to take care of all of these business finance functions. This brings up the question of outsourcing. Business owners should carefully consider the following factors when asking themselves, "Do you need to outsource your business finances?"

  • The overhead costs-When some business owners reach the above described stage in their business, their first inclination is to hire an employee to handle some of these functions. However, it is important to realize that hiring a full time employee may cost your business up to 30% more then just their salary. This is due to the overhead costs that are inherent in having employees. This is what makes considering using outsourcing so important. Another cost to bringing in a full time employee is the cost of software that you will need to manage your business finances. This can be a considerable cost, depending on the type of software that your business needs. If you choose to outsource your business finances, then the company you hire will already have the software they need to get the job done. In addition, to purchasing software, you should take into account that there most likely will be training costs, on how to use it. This can also be an expensive proposition if the employee you train to handle the books suddenly leaves and you have to start over with someone else.
  • Think about the technology-Business finance is a dynamic and ever changing filed. Companies that make their living by doing outsourced work will have to have the latest in technology. Many times businesses (especially those that are smaller) cannot afford to have the latest in business finance technology. Outsourcing this type of work give them the benefit of the latest technology, without having to shoulder the cost of it. This can be a major benefit to using outsourcing, for your business finances.
  • Figure out the savings-If you are considering outsourcing you will need to figure out exactly what the cost savings will be, versus managing the business finances, in-house. The answer to this will be dependent on the business finance needs, of every individual company. Keep in mind that an outsourcing company will have to take a look at what business finance functions that you want outsourced, and then they will have to offer a quote. Remember, that the more business finance functions you want to outsource, the higher the price, for the work will be.
  • Consider the time saved-Another important aspect to consider when you are thinking about outsourcing your business finances, is how much time you will save. The amount of money you will save, should not the only determining factor. Remember, that any time that you free up for yourself, can be used to work on other money making aspects of your business. You should figure out as closely as possible, just how many hours you devote to handling the finances of your business. You will then see if the time you save, will be worth the money that you will pay the outsourcing firm. This may or may not be the most effective use of your time, but it certainly should be considered before making this decision.
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