7-minute read
Did you know that 38% of companies outsource their accounting functions?
Is your staffing agency part of the 62% that still spends money on in-house accounting? If so, you might be missing out on some valuable advantages. You're probably also paying more for your agency's accounting than you need to.
To make sure your agency stays competitive and profitable, you always need to be looking for ways to reduce overhead costs and improve processes. Outsourced accounting is one of the ways you can achieve both of these things.
Keen to know whether your staffing agency should outsource its accounting? Keep reading to find out.
Outsourced Accounting Services Are More Cost-Effective
One of the attractive advantages of outsourced accounting services is they are usually more cost-effective.
Inhouse departments come with a boatload of hidden expenses. These include things like:
- Onboarding costs
- Training
- Office overheads
- Payroll expenses
- Employer share of taxes
- Paid leave
The general rule of thumb is that employees cost between 1.25 to 1.4 times their salary after benefits, taxes, and payroll expenses. That's not even including hidden expenses like training or office overheads.
What's more, not only do employees cost more than you think, but sometimes they aren't fully utilized. For instance, if you run a small staffing agency, you might end up hiring both a bookkeeper and an accountant. Only to find that you can't fully use them.
With outsourced accounting services you only have to pay for what you need. You can also reduce overhead costs and payroll expenses. All combined, this can equate to some substantial savings and improve your ROI.
According to statistics, 90% of businesses that use outsourcing enjoy an ROI of 25%.
Your Get Access to Expert Knowledge
Besides being more cost-effective, another of the differences between in-house accounting vs. outsourcing is that you get access to cumulative expert knowledge.
One of the accounting mistakes that some staffing agency owners make is thinking they don't need CPA-level expertise. Although you might not need a CPA on your payroll full-time—being able to have the services of a CPA on hand can be invaluable.
They carry out tax-related processes for you. They can also help you conduct savvy tax planning, and provide ad-hoc reporting.
If you choose to outsource accounting for your staffing agency, you'll get access to pooled knowledge and experience. When you hire an accountant in-house, you're solely reliant on that individual's knowledge and experience.
Outsourced Accounting For Staffing Agencies Is Easily Scalable
Are you growing your staffing agency? Outsourced accounting services are ideal for businesses that are in the midst of scaling.
Scaling any type of business can be challenging, and your accounting function is often one of the most tricky to scale. As your staffing agency grows, so will the volume of your transactions, payroll, etc.
There will come a point where this is too much to handle for your existing financial staff. Yet, if you hire another employee, there might not yet be enough work for them.
What's more, hiring new staff members takes time and money.
In contrast, scaling up your needs with outsourced accounting services is easy. If your needs expand, your accounting services provider will easily be able to accommodate these.
Additionally, if your needs shrink, so will your monthly accounting costs. If you handle accounting in-house, the only way to downscale your accounting department is to let go of some of the staff.
Better Compliance and Controls
Outsourced accounting can also ensure your staffing agency achieves better compliance and controls.
Accounting professionals have to stay up-to-date on the latest regulatory changes and requirements. Part of their job is staying in tune with what is happening in the industry—and carefully monitor any relevant law or regulation changes.
Outsourced accounting services also often have tighter control measures than in-house accounting functions. Having a third-party handle your accounting is usually far more secure than having it entirely in the hands of one or two people within your agency.
Increased Focus on Core Operations
One of the most impactful benefits of choosing to outsource accounting is that you'll be able to regain time and focus for core operations.
Even if you hire a competent team of financial staff, you'll still need to manage them. Ultimately, you are also responsible should mistakes occur.
With outsourcing, you don't have to manage this set of staff. Everything is streamlined and requires as little time from you as possible.
According to reports, 88% of surveyed businesses owners report that they have more time to focus on their business after switching to outsourced accounting services.
Better Insights and Increased Revenue
Lastly, outsourced accounting can also give you access to better insights and increase your revenue. Approximately 50% of business owners worry less about mistakes when using outsourced accounting.
Fewer mistakes mean fewer complications and more accurate reporting. More accurate reports lead to better insights.
What's more, gaining the outside perspective of a professional can give you new eyes into your business. This can lead to better business decisions.
Outsourced accounting professionals working with many businesses, often in the exact same industry. Because of this, they might be able to alert you to trends and developments they see in other agencies.
Roughly 30% of businesses that outsource accounting receive advice that helps them to increase revenue. This same percentage also report feeling more prepared to make business decisions.
Are You Looking to Outsource Accounting For Your Staffing Agency?
Were you on the fence about whether to outsource accounting for your staffing agency? Outsourced accounting services offer many advantages over traditional in-house accounting.
These include substantial cost savings, easy scaling, and access to expert knowledge. What's more, you can also win back valuable time and focus to dedicate to the core operations of your agency.
At AdminAssist, we specialize in accounting for staffing agencies. With over 60 years of expertise in staffing industry financials, we turn complex services into simple processes.
Ready to streamline your back office and accounting functions but unsure of the costs? Use our cost savings calculator to find out how much you can save with our outsourced accounting services.