Whether to use an in-house or outsourced accounting team is an age-old debate.
We’ve wrote about it in the past and we still hope more business owners take the time to weigh their options. The true value of an outsourced accounting team is a way under-rated and an untapped resource for many small business owners.
Finding the right partner for your small business accounting needs may seem like an extremely demanding task. For this reason, it becomes very tempting to just hire someone in-house. Although this may seem like the easier and more convenient option, your business may be losing out. Evidently, what appears to be ‘convenient’ becomes a costly delusion.
“If you deprive yourself of outsourcing and your competitors do not, you’re putting yourself out of business.”
LEE KUAN YEW
In this post, we explore seven reasons why it makes sense to partner up with an outsourced accounting team for your small business accounting needs.
DIFFERENT WAYS OUTSOURCED ACCOUNTING SAVES YOU MONEY
#1: Full Time Salaries versus Monthly Retainer Fees
A full time in-house accountant will cost you anything from R20 000 per month. On the other hand, a monthly retainer fee at an accounting firm may cost you anything from R4 000. Keep in mind that instead of paying several people in an in-house accounting department – you pay one company. This has the following benefits:
- Lower employee costs
- No training costs
- No additional responsibilities towards employees including:
- Employee taxes
- Employee benefits and contributions
- Additional staff policies and structures
#2: Avoiding Harsh Penalties and Interest by Staying Compliant
The cost of non-compliance to legislation in South Africa should not be underestimated. An example includes the penalty for late/wrong submission/payment of employee taxes: A whopping 10% of the total amount payable with interest accruing daily at a further 10%. In the end, these additional costs add up and can be avoided by trusting someone else with the accurate and timely administration thereof.
#3: The Value Of Time Better Spent Elsewhere
Any business owner becomes jittery when they realise they are spending too much time on the admin aspect of their business. William Harris writes: “The most painful mistake I see most inexperienced entrepreneurs make is not delegating tasks effectively.” Therefore, when outsourcing your accounting function – you have more time to:
- Focus on long-term and strategic growth of your company
- Communicate with clients and improve customer service
- Research new profitable ventures
ACCESS TO A PRECIOUS LIST OF RESOURCES
#1: Pride Yourself on Utilising the Latest Technology
Accounting firms already have the technical systems in place to ensure that their clients’ financial processes are functioning seamlessly. Modern accounting software like Xero and Sage also give you access to your records at any time. It instills a nice level of transparency between your and the accounting firm you choose.
2# Access to Expert Advice
An outsourced accounting solution gives you access to a full accounting department with experts in various fields. The accounting firm has the hub of knowledge and should provide you with the added financial advice to grow your business.
3# Better Decision-Making
Outsourcing your accounting ensures that you have up to date, accurate and relevant information at hand when you need to make important financial decisions. Your monthly reports, financial statements and other important financial information become an aspect of your business that you can rely on.
EASE OF MIND AND ALL-ROUND COMPLIANCE
Companies in South Africa have a vast level of different compliance matters to consider and unfortunately, it’s not something you can brush off. Workmen’s compensation, employee taxes, annual returns and maintaining the correct company details with the CIPC are all matters which shouldn’t keep you up at night.
Accounting firms specialises in keeping clients compliant in most aspects of legislation applicable to your company. Your business gets covered with extensive knowledge on new laws and regulations, new trends and important information.
A solid accounting solution is one of the essential foundations to guarantee success. The time you spent today in finding the right outsourced accounting partner – could save you significantly in the future.
Do what you do best, and outsource the rest.
– Peter Drucker
Scoot over to our contact page to find out about our small business accounting solutions for your business.