Outsourcing Business Systems and Accounting

Why You are Leaving Money on the Table if You aren’t Outsourcing Business Systems

When it is time to hire new talent, should you bring on a new employee or look for ways that the services can be outsourced? As a business owner, it can be a lot of work to manage employees and contractors. So, you need to be sure that you have solid systems in place to help you maximize your results.

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Changes in Hiring Trends

For many years, companies depended on a staff of in-house employees to complete their work. But, times have changed, and many businesses outsource some of their operations. Outsourced talent can be beneficial for many reasons. In today’s workplace, it is wise to consider what benefits your company could experience by doing so.

The problem is that some employers are nervous about the idea of bringing in outside talent. If the contractor isn’t employed by the company, will you lose control of the quality of work and the project outcomes? Not necessarily. The truth is that outsourcing might be the solution that you need to take your results to the next level.

When companies start to see the benefits of outsourced talent, they start to make the change to integrate more contractors and hire fewer direct employees. If you haven’t caught the vision, then we want to help you see why it might be smart for you to incorporate these changes into your organization.

Save Money with Outsourced Talent

It is easy to forget how much a single employee can cost your company. You might look at the salary and see the base wage that is spent on that individual. But, you also need to consider other employment expenses that can add up over time. It can be difficult to calculate all of the expenses since there are so many factors that increase the cost of doing business when you bring on another employee.

The costs of hiring an employee can include a variety of expenses, including:

  • Salary
  • Employment Taxes (Social Security, Medicare, FUTA, State Unemployment)
  • Worker’s Compensation Coverage
  • HR Management
  • Office Space
  • Health, Vision, and Dental Insurance
  • Retirement Savings Accounts
  • Computers and Equipment
  • Onboarding and Training
  • Paid Time Off
  • Recruiting Expenses
  • Cost of Payroll Processing Services
  • Legal Fees
  • And More

As a general rule of thumb, you can expect to pay 10% on top of the employee’s salary for taxes. Then, the other non-tax expenses still need to be added on top of this figure. Not only do you need to meet regulatory requirements, but you also need to be sure that you are providing the benefits that many employees expect.

Instead of increasing your overhead by paying for all of these expenses, a cost-effective solution may be to bring on a contractor who has the experience that you need. You can save the 10% cost for employment taxes because the contractor is required to manage their own withholdings and other taxable expenses.

Since the contractor doesn’t work in the office, you may not need to provide office space, equipment, supplies, or any of the other miscellaneous tasks that can add up over time. Additionally, you can save the money that would have been spent on benefits such as Paid Time Off, health insurance, and more.

Maximize Output and Manage Payable Hours

Hiring an employee means that you will need to pay them for every hour that they spend in the office. But, a contractor is only paid when they are performing work that applies to your project. For example, when employees take paid breaks or spend time talking to coworkers instead of completing the required tasks, you are still paying them for the hours that they are in the office. On the other hand, a contractor will charge either a flat fee for the service or they will stop billing if they step away from the project.

Many times, employees are engaged in a variety of tasks during the day. When you are paying an hourly rate, you will be spending the same amount of money if the person is filing paperwork or working on complex data analysis. There are often times when employees are hired to work full-time, but they can complete their responsibilities in 25 – 30 hours during the week. The other 10 – 15 hours are spent on menial activities to fill the time.

When you hire a contractor, that person brings a specialized skill set that will be used, without the need to pay for busy-work to fill the rest of their time. You can pay a certain amount for a specific number of hours each week, and the contractor spends the rest of the week working for other clients. As a result, the contractor can maximize their income, and you don’t have to bear the burden of paying a full-time salary for that person.

Leveraging Business Results for the Future

Another financial factor that needs to be considered is the way you are leveraging results to create future success. One reason you might be leaving money on the table is that you are spending your time on busy work instead of business management.

Business owners carry many responsibilities throughout the day. It is common for an owner to be involved in employee management, product development, and data entry during different times of the day.

But, you need to consider the best use of your skills and how you can increase your personal performance. If you are spending a part of your day on busy work that could be outsourced, then you are possibly stunting your business by spending your precious time on other more profit-generating activities.

For example, how much time do you spend on things such as data entry, payroll processing, and filing paperwork? These tasks are important to maintain the organization of your company. But, they are things that can be outsourced to specialists so that you can focus on the higher priority tasks. As the owner of the company, you shouldn’t be wasting your time with the busy work!

Some business owners continue these tasks because they don’t want to bring on the burden of another employee. In the above example, it can seem like an expensive solution to bring in a full-time employee to handle financial tracking, bookkeeping, and reporting. Instead of doing so, you should consider the benefits of an outsourced contractor. A qualified contractor is an expert at their craft. The efficiency of their work will likely result in economic savings to your business, resulting in less overhead. You can be selective about a contractor with the specific skill set that you need, and you can improve your business’s systems and operations.

Better Skillset, Better Results

Contractors have the advantage of working on multiple projects in the same industry, giving them a specialized skillset that can’t be gained by working for a single employer. These skills can amplify the results that you get from the work that is completed.

To share an example, consider the benefits of hiring a bookkeeping or accounting service for your company. If you encounter a financial situation that needs to be addressed, the contractor is more likely to have the necessary knowledge from work that has been done on other projects. In comparison, an employee might not have the same depth of knowledge and experience compared to the contractor.

The best way to maximize your future results is to be sure that you construct a team of people who are working together in a synergistic way. Contractors will often give you the opportunity to test their services, allowing you to move on to another option if it isn’t working out. In this scenario, you don’t have to worry about unemployment costs or severance pay that might be required if you were letting go of an employee.

Financial Benefits for Your Company

As you can see, there are many reasons why you should consider hiring contractors instead of employees. Not only can you save money by cutting out the excess costs of an employee, but you can also infuse your business with new talent that can propel you to future success. If you want to take advantage of these benefits, then you need to look for ways that you can use outsourced services instead of hiring employees.

Are you interested in learning more about how you can benefit from outsourced accounting services? Here at Easier Accounting, we have optimized our systems to help people like you. By focusing on accounting services for entrepreneurs, small businesses, and start-ups, we can bring the specialized skills that are essential to help your financial success.

We invite you to contact us to learn more about the ways that we can help your company. Don’t rush into the decision to hire a full-time accountant for your company. Instead, we encourage you to talk to us so that you can see the benefits that are available from outsourced accounting. We are here to help!

Call our team at Easier Accounting to ask questions and get information about the services that can be customized to match the needs of your organization: (888) 620-0770

 

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