Outsourced bookkeeping and back-office accounting have become our primary means of engagement with small-and-medium businesses. While there are advantages and disadvantages to outsourced bookkeeping, this article solely considers the financial benefits for firms which have shifted from hiring part-time bookkeepers to outsourcing their bookkeeping and accounting functions. After all, a firm’s bottom line is all about cost savings.
Based on a simple calculation, an outsourced bookkeeper (as opposed to an in-house part-time bookkeeper) has given firms a saving of at least 40%. Following is a simple comparison I have made (The figures are based on Tailored Accounts’ internal data, other businesses in different industries
might have different cost bases):
Cost comparison between an in-house part-time bookkeeper and outsourced bookkeeper
In-house part-time bookkeeper
* Base salary (Approximately 5 hours per week at $35 per hour) $9,100.00 per annum
* Superannuation (9.5% of base salary) $864.50
* Leave loading (25% of base salary) $2,275.00
* Costs associated with recruitment (Approx. once a year) $1,500.00
* Workers’ compensation (0.9% of base salary) $81.90
* Costs associated with payroll compliance and processing (Approx. 10 minutes per week) $300.00
* Training costs (e.g., software update) $350.00
* Other overhead costs (e.g., utilities, stationery, administrative, etc.)
For a business with $50,000 per annum overhead and approx. 3-5 employees) – $3,000.00
* Total costs per annum: $17,471.40.
* Monthly bookkeeping fee (Tailored Accounts’ average fee is $700.00 per month) $8,400.00 per annum
* Total costs per annum $8,400.00
* Savings per annum $9,071.40 (51.92%).
Outsourced bookkeeping provides significant cost savings by reducing overhead costs and business liabilities. It allows businesses to gain access to a pool of qualified bookkeepers with low hourly fees and no additional overhead costs, and ensures that the books are prepared with greater accuracy.
At Tailored Accounts, I can guarantee you a good return on investment with our value-added bookkeeping and back-office accounting services.