Are you running a business and struggling to keep up with the expenses of building an accounting team?
You are not alone.
According to a survey by Robert Half Finance and Accounting, the average cost of hiring a full-time financial professional in the US is $82,000 per year, excluding benefits and other expenses. This amount is much higher for businesses in large cities, where salaries and living costs are higher. The amounts for entry-level are much lower too, but they also have a lot of hidden costs.
So, what is the solution? Outsourcing financials can be cheaper and more efficient for businesses of all sizes.
The Cost of Building an Accounting Team
Hiring a financial professional is not just about finding someone who can balance the books. It requires specialized skills and knowledge, including cash and tax planning, preparation, financial analysis, and regulatory compliance. The cost of building an accounting team includes recruiting expenses, salaries, benefits, office space, equipment, and training. On top of that, there are ongoing costs like software, subscriptions, and continuing education.
According to a Society for Human Resource Management report, the average cost per hire is $4,129. This includes job board fees, background checks, and the time and effort spent by HR personnel. Once a candidate is hired, the onboarding process can take several weeks, during which the new hire is not yet contributing to the business.
The cost of training a new employee can range from $1,000 to $5,000, depending on the level of expertise required. In addition to the initial costs, ongoing expenses are associated with building an accounting team. The average salary for a financial analyst in the US is $67,000 per year, according to PayScale. However, in large cities like New York, San Francisco, and Los Angeles, the average salary ranges from $80,000 to $100,000. This does not include benefits like health insurance, retirement plans, and paid time off.
The Benefits of Outsourcing Financials
Outsourcing financials can be a cost-effective alternative to building an accounting team. Outsourcing allows businesses to access a pool of talented and experienced financial professionals without the overhead costs. Outsourcing firms provide various services, including bookkeeping, financial analysis, tax preparation, payroll management, regulatory compliance and CFO services.
The benefits of outsourcing financials include the following:
- Cost savings: Outsourcing financials can save businesses up to 40% compared to hiring a full-time employee. Outsourcing firms charge for the services they provide, which can be customized to meet the business’s specific needs. This means that businesses only pay for the services they use without the additional costs of salaries, benefits, and office space.
- Access to expertise: Outsourcing firms employ financial professionals with various skills and experience. Why would you limit yourself to a local hire? With our global remote workforce, businesses can access specialized services that may not be available in-house. For example, if a business needs help with tax preparation, they can hire an outsourced tax expert without having to build a separate tax department.
- Scalability: Outsourcing allows businesses to scale their financial services up or down as needed. This is particularly useful for seasonal businesses or those that experience fluctuating demand. Instead of hiring and firing employees, businesses can simply adjust their outsourcing contracts to meet their needs.
- Reduced risk: Outsourcing firms are responsible for staying up-to-date with changes in regulations and compliance requirements. This means businesses can reduce the risk of errors and penalties associated with financial reporting.
In conclusion, outsourcing financials can be a cost-effective and efficient option for businesses of all sizes. It allows businesses to access specialized services without the overhead costs of building an accounting team. However, some businesses may still prefer to build an in-house accounting team due to the perceived benefits of having full control and visibility over financial operations. It is important to weigh both options’ pros and cons before deciding.
Working with Panterra Finance
Sam McQuade is the owner here at Panterra Finance. Sam has successfully scaled his decades-old ideas into an innovative full-service Financial Partner Solution for incubators, startups, and emerging business concepts, as well as well-established international companies, corporations and organizations with the introduction of Panterra Finance. During pivotal transitions, the Panterra Finance professional executive team members are equipped to provide an industry-leading concept of an on-demand Fractional CFO. In disrupting the traditional contracted title of CFO, Panterra Finance innovatively offers all its clients thought leadership based on international financial market experiences. Panterra Finance provides a unified global approach to businesses in the Americas, Europe, Asia, and Africa.
The Fractional CFO and Interim CFO experiences gained by the executives assigned to these positions throughout Panterra Finance offer them a broad perspective of the dynamic changes in international markets. The part-time CFO executives at Panterra Finance have access to worldwide teams that are proficient in and have initiated innovative strategies in projects centred on Defi, Blockchain, Bitcoin, Ethereum, Crypto, Tokenization, ICO, IDO, and STO services.
If you feel your business could benefit from Fractional CFO services, we invite you to book a call by clicking this link. It could transform your business.