How Much Does it Cost to Outsource Your Accounting & Bookkeeping?
The typical cost of outsourcing your accounting and bookkeeping can range from $500 to $5,000 per month for small businesses. There are a wide variety of factors to consider to determine the price to outsource the accounting for any business. Although this may appear complex or intimidating, the accounting partner you are talking to does this every day and should be able to simplify the scoping process and perhaps make it a bit fun. Change can be scary for some and exciting for others.
The obvious goals are to add skillsets you didn’t have before, save money, or improve systems or internal controls.
Your ultimate goal should be to find the right partner for you that fits your culture and is the best fit for your business.
Outsourcing your accounting
can save you 40% – 60%.
What Factors Impact the Price of Outsourcing?
For some industries revenue may be the one of the key indicators of scope for pricing. The more revenue you have, the more work your accounting team will need to perform. This isn’t always the case, take a funded startup that’s pre-sales. There still may be a lot of work with no revenue on the books.
Industries tend to have common needs and inherent complexities in the business model. Professional services need to really understand job costing to excel which has specific accounting requirements. Ecommerce businesses required inventory-based accounting and need to be build to scale.
Employees can be an indicator of volume or complexity. Some businesses need a lot of people to grow and others that may grow rapidly with very little human resource needs.
Handling the accounting for a customer is not a one-size-fits-all package. Pricing will require an understanding of what you want your accounting partner to do for you? Aside from coding bank activity, you may want to outsource stand-alone functions like:
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Sales Invoicing
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Accounts Payable
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Payroll Processing
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Budgeting / Forecasting
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Financial Analysis
Although the goal is to automate the accounting function as much as possible, it’s still a human-based service. The more work needed, the more time it takes to complete it. The location of your team can dictate your price. Outsourcing can be onshore, offshore or a combination of both.
Naturally, an onshore team will cost more than an offshore.
A combination of both, a blended partner, will provide the benefits of both while mitigating most of the concerns about offshoring. This is generally the most cost-effective solution for what you get.
One of the primary advantages of partnering with an outsourcing accounting company as they can dial in the exact level of skill set for each role you’ll need at any given time. As your accounting needs ebb or flow, we can ramp up or down each level on the fly. That’s virtually impossible when you hire a team.
An additional benefit to small businesses is they do not need full-time employees for all of the roles in an accounting department. It’s impossible to hire a percent of this and a percent of that. You either need to over-hire (wasted money) or under-hire (lacking skills).
Outsourcing the accounting function is the most cost-effective way to scale your business.
