Many startups face an inflection point where they must decide whether to hire an in-house finance department or outsource to a third party. While both options have their pros and cons, outsourcing accounting and finance functions can prove to be much more cost effective.
Outsourcing your accounting needs functions exactly how it sounds. Essentially, you'll hire a firm or agency to handle your bookkeeping and finance functions in lieu of hiring a full department. Often times, companies outsource one specific function of the accounting picture (AR, AP, payroll, etc.) You'll then typically pay either an hourly or fixed rate for the services rendered. Regardless, there are plenty of benefits to outsourcing:
More experienced accountants
Time management benefits
Reduced overhead
Reduced labor cost
Less work required
These are just a few of the great perks to outsourcing accounting and/or bookkeeping. The list goes on, especially if you find a partner that you can rely on.
However, there are cons to outsourcing accounting functions, especially if you aren't careful in the hiring process:
Many firms charge unreasonably high fees
Some firms do not properly vet accounting staff
Lack of transparency in financial reporting
At Plymouth Wright, we carefully vet each of our accountants before bringing them onto our (and ultimately your) team. We have a rigid interview process to ensure that our clients get the absolute best service possible. Ultimately, however, what sets us apart is our commitment to integrate into your company culture. To us, you are not just another client.
When to seek accounting outsourcing
Ultimately, the decision to outsource accounting depends on the specific needs of a company. If you're in need of short-term assistance (temporary placement), then outsourcing may be right for you. Additionally, if you want to bring on experienced staff without the cost and commitment of hiring employees, outsourcing may be a good fit.
To learn about how we can help support your growth, please reach out.