Advances in software and cloud based technology have made it possible for businesses to move away from the traditional model of hiring a fulltime, in-house bookkeeper. The types of costs associated with hiring an in-house bookkeeper vs. the costs of using a virtual accounting firm greatly differ. If you are trying to decide between the two for your business, there are multiple costs to consider before making your decision.
The costs related to hiring an in-house bookkeeper.
Hiring an in-house bookkeeper can become an expensive process. You will incur all the costs associated with hiring a fulltime employee. Bookkeeping is an important service and you are likely ok with paying someone to help you with this task. However, the salary you pay an in-house bookkeeper is only part of what you will pay out over time. There are several ongoing costs related to having a fulltime, in-house bookkeeper. Employer paid insurance costs and benefits, such as paid vacation time, will continue to cost you money as long as you employ an in-house bookkeeper. In addition, your in-house bookkeeper will likely need a space to work, equipment, and software in order to adequately do the accounting for your business.
You will also expend a large amount of time and energy on a fulltime employee. The process of searching, interviewing, hiring, onboarding, and training a new employee is very time consuming. In addition, you will continue to spend time managing an in-house bookkeeper. The time spent on these tasks will take you away from other duties related to running and growing your business. In addition, there is always a risk of turnover with a fulltime employee, in which case you will have to go through the entire process again.
The costs related to hiring a virtual accounting firm.
When you hire a virtual accounting firm, you will pay for the services you need. You will not be paying for the overhead and indirect costs related to having a fulltime employee. In order to setup services, you will work with the accounting firm to help them understand the bookkeeping needs of your business. Once the virtual accounting firm has a clear understanding of your needs, they will develop a plan customized to your business. Once the plan is implemented, you will have access to your accounting information through the cloud.
The way you pay for virtual accounting services will depend on the firm you choose. One model is to set you up on a monthly retainer based on the services specified in your customized plan. As your business grows you can work with the firm to adjust the plan to meet your changing needs. Using a virtual accounting firm will also give you access to a team of accounting professionals. This model can save you money over an in-house bookkeeper because you can add on more services without having to go through the process of hiring additional help. The staff is already in place at the accounting firm and is available should your business need additional bookkeeping services.
It may seem intimidating to move all your accounting services to a virtual accounting firm, especially if you have never used cloud based accounting. For many businesses, it is the most efficient and cost-effective way to keep up with your bookkeeping needs. If you are hesitant, simply set up a consultation with a virtual accounting firm and learn about the types of services they can offer for your business.