What is the
True Cost
of Hiring an
Employee?
Prospective customers considering outsourcing their accounting often have concerns about cost or how outsourcing works. The alternative to outsourcing is to hire and we’ve found many business owners significantly underestimate the actual cost of hiring an employee.
There are four areas to consider when determining hiring costs:
Wages + Benefits and Taxes + Overhead + Time and Effort = Total Cost
I’d be remiss to not start off with the total cost of hiring. You’ll find in our Google Sheet template to what extent this is true for you.
Our customers have the benefit of a team of educated accountants with ranging levels of skill. An educated accountant is quite different than an “experienced” bookkeeper. You now have a team of accounting professionals performing your accounting in real-time each day. If someone on our team is out sick, another is still working away. We can ramp the team up or down as your business changes ensuring you have a scalable accounting solution. It is not easy to ramp up or down one accounting employee. If you ramp down their hours, they may quit. If you need to ramp up, you’re back to expensive hiring.
Our employees have access to our entire team’s pool of knowledge. If they need to bounce an idea off another accountant or want to see what software add-on has worked best and why, they can do that at any time.
If a customer needs to add budgeting or encounters a complex transaction, we can bring on a team member with that skill set right away. You may have hired one accountant with solid accounting skills but that does not mean they will be capable of moving up the knowledge curve overnight.
We are always here for our customers. If you hired one accountant and they are on vacation or quit, you may have an issue. Who will get invoices out? Who will pick up payroll? Who’s going to close the financials? Can I hire a new accountant fast enough to be trained by my accountant that is leaving? These are all valid concerns.
If one of our team members goes on vacation, we have others still working on your account and are capable of performing all tasks while the other is out. If one of our employees quits, we slide in another accountant.
Our goal is that there is no downtime in doing the accounting for your business. We’re here, day-to-day, like clockwork.
Accounting procedures should be documented so that anyone could step in and pick up where the other accountant left off. Every number on the financials should be tied out and supported.
There are almost never documented procedures and almost always items on the financials that nobody can explain when we bring on a new customer. As you look to scale your business, documented procedures are a must.
Unless you have the ability to perform a mind-meld, expect to lose and have to re-create a significant portion of the accounting knowledge when an employee departs. That will severely impact your ability to deliver to your clients.