An option that most businesses consider is hiring someone to handle these tasks. However, hiring in-house staff is not the most practical option for small businesses and startups. Having an employee on their regular payroll can cause a serious hike in their expenses. For such businesses, a much more ideal and affordable solution could be to outsource. According to Forbes, outsourcing accounting and payroll functions not only makes a business cost-effective but also offers numerous other advantages that can keep it competitive and efficient.
Here are some benefits that outsourced accounting services and payroll can bring to your business explained comprehensively by JFDI Consultants:
1. Bring Down Operational Costs
Reduced operational cost is one of the most compelling reasons for outsourcing accounting and payroll functions. Compared to hiring full-time employees for these jobs, outsourcing them can be extremely cost-effective as companies can be spared from paying salaries and employer taxes. Furthermore, outsourced accounting services are tax-deductible.
Currently, the average annual salary of accounting and payroll managers is $104,000 and $46,000 respectively. In addition, the payroll taxes amount up to 12% of the salary. Adding up the figures, a company typically has to pay over $160,000 annually to have in-house accounting and payroll managers. On the other hand, outsourced accounting and payroll services offered by JFDI Accountants start at as low as $500 per month.
As a result, outsourcing accounting and payroll functions can save companies as much as $150,000 annually, which is quite a substantial amount for any small or startup business.
2. Work with the Experts
Outsourcing to a firm that is entirely dedicated to accounting and payroll management means working with the experts in the industry. With their extensive experience, these professionals know accounting and payroll processing inside out and are well-adept at handling problems and challenges. Moreover, these experts are also aware of changes in government tax and compliance regulations, ensuring that there are no processing mistakes.
In comparison, if entrepreneurs decide to manage these tasks on their own, they have to give up a lot of their precious time. They are also prone to making mistakes that can lead to penalties charged by the IRS. According to the IRS, every year more than 40% of small businesses pay over $800 individually in penalties due to improper or late payments and filing of their taxes. Alternatively, hiring professionals in-house with the same level of expertise can be unaffordable for most companies. In most cases, companies hire less experienced professionals and have to deal with low quality of work and turnover issues.
The professional team at JFDI Accountants has extensive experience and knowledge of tax laws and regulatory mandates on local, state and federal levels. With outsourced CFO services and payroll management, companies can rest assured that they will be getting reliable and effective long-term solutions for their needs.
3. Focus on the Core Competencies
Accounting and payroll functions can take a lot of time to be completed. Perhaps it is time that small business owners or founders of startups can’t afford to spare? Devoting a huge chunk of time to these activities month after month results in entrepreneurs losing the focus from what matters the most – their core business function. When the core function of a business is neglected, its performance and profits both suffer.
Outsourcing leaves business owners with enough time to focus solely on technical and strategic business matters that can improve the bottom line. It also saves them from dealing with lengthy recruitment processes and turnover issues associated with in-house staff. Outsourcing contractors usually offer month-to-month no-strings-attached service agreements that can be arranged according to a business’ needs and convenience.
4. Get Enhanced Security for Your Data
Financial and payroll data of a company is extremely critical, making its security a major concern. When it comes to such data, there are always certain risks such as identity theft, tampering with or sabotaging company records, and funds embezzlement. Managing unbreakable safety and security of such data when using an in-house accounting or payroll software can cost a business huge sums of money on a regular basis.
From maintaining backups to updating security software regularly, entrepreneurs need to give constant attention to the entire process or risk compromising the confidentiality of their data. Trusted outsourced solutions can save businesses from worrying about safety and security of their crucial business data. Backups, security software and everything else that is needed to keep a business’ data safe is a part of the service provided.
Considering all the advantages it has to offer, outsourcing accounting and payroll functions definitely makes good business sense. Contact JFDI Accountants today to find out if outsourcing is indeed the best solution for your business.