Growth is a popular goal in the business world, but the costs associated with scaling up can be counterproductive. Some companies are risking employee burnout to avoid the price of onboarding new hires, and other corporations and losing out on quality contacts due to lead gen expenses.
While a familiar tactic, sacrificing growth is not the only path to profitability — a rising number of businesses are outsourcing certain services so they no longer have to compromise. This helps in not only cutting down staffing costs, but also in freeing up time to build your business without adding a huge budgetary expansion.
Accounting is among the most commonly outsourced services, especially for businesses seeking growth on a tight budget. Here are some best practices when working with white label accounting firms so you can increase productivity while cutting down costs.
Cut Costs by Outsourcing Accounting and Bookkeeping Services
It can be hard to give up control of some core processes in a business you’ve built from the ground up, but hiring a professional service can help you cut costs. When accounting is your business, it’s normal to feel especially protective over every detail, whether you’re hiring a new employee or outsourcing. Outsourcing with a white label accounting firm can make things easier for you while reducing operating expenses because you know you’re tapping into some of the top talent in the accounting and bookkeeping industry.
Bypass the Training Investment Phase
Finding properly trained and certified professionals can be a concern for accounting businesses, and training can be a huge expense. However, when you outsource bookkeeping and accounting services to a professional outsourcing firm, you know accounting compliance issues won’t be a problem. Certified accountants can save you money in the long run because they may make fewer mistakes than an in-house staff accountant. This is due to the fact that you’re working with pros in the field who understand the rules and regulations surrounding accounting and bookkeeping processes.
Ditch the Expensive Software
Accounting software can be a huge investment for a firm that specializes in bookkeeping and accounting, and the costs can easily eat into your budget. Working with an outsourced accounting team gives you the same hands-off experience that comes with using automated software. Additionally, your outsourced accounting pro is trained so you don’t need to buy accounting software and training package. Unlike the standard bookkeeping software, though, white-label accounting services are completely scalable. You can create a custom plan so you’re only paying for the services that you need, and not spending money on extra accountants and tasks that don’t apply to your business.
Save on Taxes
In addition to the cost of hiring an employee, it’s also costly to keep them on the payroll due to tax matching requirements. That can make outsourcing a much more affordable option for an accounting business in a growth phase. It typically costs (as of 2019) a company 1.25% to 1.4% times an employee’s wages to cover the costs of just FICA, Federal unemployment tax, workers’ comp, and state unemployment tax. So, if you hire an accountant to work for your firm making $40,000 per year, it can cost your business an additional $10,000 to $16,000 per year in tax matching costs to keep that employee on your payroll. That’s a lot of money that you can direct to other key areas of your business if you choose to cut costs by outsourcing with a white label accounting firm.
Contact Pacific Accounting & Business Services Today
When you’re working with a razor-thin budget, you can still keep your accounting practice in an expansion phase. Look at the records and results of the firm you’re considering as an outsourcing partner, then examine how they can help you cut costs compared to the cost of bringing on more employees. When you’re ready to talk with someone, Contact Pacific Accounting & Business Services to learn what we can do to help your accounting business grow.