Accounting is an essential part of any business, so it is important to find an accountant that fits your company’s financial needs. In order to do so, you must first weigh the costs of either outsourcing or hiring a full-time accountant in-house. For that to be accurate, we want to make sure you understand the true cost of each option.
In order to calculate the cost of hiring a full-time accountant, there are four things to keep in mind: wages, benefits and taxes, overhead, and time and effort. Wages are the most straightforward costs, but they do vary, depending on where the business is located and whether you will need a controller-level accountant or a bookkeeper.
Benefits—including health insurance, vacation, payroll taxes and retirement—are commonly used to compare your company against another when a job seeker is deciding to take a job. Though it could be difficult for a small business to compete in this area, many companies use a straight percent applied against an employee’s wages ranging from 20%-30% as part of their compensation packages.
Overhead costs are comprised of equipment, office space, supplies, and other items needed for the employee to perform their job. All this, with the addition of the time and effort it takes to hire, train, and manage the accountant, ultimately amounts to a hefty sum. Say your new accountant has a $34,029 yearly salary. With all the extra costs, as mentioned above, that increases the amount your business is actually paying up to $82,372, according to our calculations.
When you decide to outsource, you will recognize that there are no hidden costs. The client simply pays a predetermined monthly fee depending on the decided plan. Here at Basis 365, for example, we can reconcile the accounts at the end of the month, do all of the accounting, or find an alternative customizable plan fit for your business.
In that, there is no need for the client to provide benefits, pay overhead costs, or devote the extra time and effort necessary to hire and manage a new employee. Outsourcing can cost anywhere from $1,000 a month to $5,000 and above, depending on the extent of the plan. It truly is up to the client to decide which option is the most effective and cost efficient, whether that calls for an accountant, a controller, or a CFO.
While outsourcing may not be right for every business, it is worth noting there are clear, upfront costs that will not be altered by unforeseen variables. We will always discuss with you any need for additional work and the pricing for the work. We will always seek your approval before starting the new work.
If you do decide to outsource your business’ accounting, be prepared to experience long-term financial satisfaction, as well as have the upper hand amongst competitors.