Staffing Agency Tips: How to Lower Overhead Costs by Outsourcing Accounting

AdminAssist August 4, 2021
7-minute read
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The workforce is in major transition. It isn't only traditional office workers becoming remote workers. It also isn't only the temporary hiring of independent contractors — freelancers.

Right now an automation revolution is occurring. This revolution may cause up to 375 million workers to change their occupational categories. Granted, this estimate is for 2030, but that's less than ten years away now.

Automation in professional jobs, management, and executive positions continues to advance. Until then, human hands need to be on deck and it's getting more expensive every year.

No doubt, you're looking to lower overhead costs and increase your ROI. Outsourcing can dramatically reduce overhead costs over an in-house backroom staff.

Keep reading to find out how.

What Is Outsourcing?

It isn't the elimination of your need to manage the department or service you're outsourcing. Any time you buy a service like graphic design, accounting, copywriting, or IT, you're hiring an independent contractor.

Most large corporations and governments are vertically integrated organizations. This means that they handle almost every task from raw materials to end product, sales, and distribution.

Still, many vertically integrated organizations prefer to outsource certain tasks. These tasks are too costly or too much of a distraction from their main goal. As a staffing agency, you know this all very well.

Rather than perform the whole hiring service themselves, they use you (and thereby outsource their hiring process). This is an example of "process-specific outsourcing."

The types of outsourcing many businesses take advantage of are:

  • Manufacture outsourcing
  • Operational outsourcing
  • Process-specific outsourcing
  • IT outsourcing
  • Project outsourcing
  • Knowledge process outsourcing

Operational outsourcing is supply, distribution, repairs, and the like. Process-specific outsourcing is a service performed by third-party service providers. These services are things like customer support, bookkeeping, accounting, and engineering.

Knowledge process outsourcing involves a complex task. This task might need licenses or special uncommon experience of a select few to complete. Knowledge process outsourcing brings in a specialist you can't train because you don't have the expertise to start with.

Project outsourcing happens when you bring in freelancers to help finish a project. This would be a project you don't have the time or resources to complete on time otherwise.

Location, Location, Location

There are three specific kinds of outsourcing by location, as well. These three kinds of outsourcing are:

  • Offshore
  • Nearshore
  • Onshore

Manufacturing is usually taken care of by offshore outsourcing. This is because wages and manufacturing infrastructure tend to be less expensive in China and other Asian countries. Customer service centers are often outsourced to India or the Philippines due to higher English proficiencies and lower costs.

Nearshore outsourcing is a different country in the same region as the headquarters. Onshore is within the same country as the headquarters.

Considering the size of the USA, nearshore outsourcing may be closer than onshore.

For example, a New York company may outsource to a Toronto one and it's considered nearshore. Otherwise, outsourcing options could be in California or Washington state. They're a much greater distance away though it's technically "onshore."

Why Does Automation in Outsourcing Matter?

The change to automation will affect the United States, China, India, and Japan the most, but also create new jobs.

Automation is occurring in several industries other than manufacturing, such as call centers and customer service. As wages increase overseas on outsourced jobs, the next place to go to is automation through robots or AI.

Why are we talking about how automation will affect job markets in ten years when we're supposed to be talking about the benefits of outsourcing?

Because you can benefit right now by automating your accounts department. The easy button for staffing firms is already here.

Automation doesn't mean unsupervised. Automated accounts services have talented accounting professionals with decades of experience controlling quality every step of the way.

Warehouse automation and manufacturing automation have been going on for decades but continue to be supervised. This is also true for accounting and bookkeeping outsourcing involving automation.

Automation reduces errors in accounting and speeds up the process. Greater AP and AR control are within your grasp, outsourcing accounting services that leverage automation.

General Benefits of Outsourcing

In outsourcing your accounting, payroll, and invoicing you get the benefits of:

  • Lower costs than in-house staff
  • Promote growth through core task focus
  • Keep your operational control
  • Flexibility in your own staffing needs
  • Scalability
  • You can focus on developing your internal staff
  • Reduce headquarters or office space and equipment
  • Reduce waste
  • Increase efficiency
  • Greater access to better talent

It takes on average 42 days and costs more than $4,129 to onboard a new hire. Don't get new hands on deck for every necessary company position. This is especially one as important as bookkeeping and accounting.

Vertical integration is expensive and involves massive responsibility and increased management. Redirect your focus to your business's core functions and personnel. Develop your best employees and make a plan of succession as you grow.

One of the best boons for outsourcing is having an expert who is dedicated to the industry at your fingertips.

As is true in IT and graphic design, the best talent isn't usually freelancing, or working for a company, but works for a design studio. Outsourcing your payroll, invoicing, and accounting gives you access to the most talented work pool.

lower overhead

Everyone is looking to lower overhead, especially in today's economic climate to increase ROI. That's at the top of the list of the benefits of outsourcing for every company.

AdminAssist helps you to overcome challenges and offers you expert advice for your backroom needs. Our leadership team serves over 40 staffing firms with more than 60 years of experience between them.

We've partnered with industry leaders like TSheets,, ADP, and more. We want to bring you the best service that small, medium, and large businesses can find.

Feel free to browse our whitepaper or use our payroll calculator to see how much you can save today!