Managing Your Company's Finances: Should You Hire a Full-Time Employee or Outsource?
Updated: Oct 15, 2019
The most surprising thing happened when I made my first hire…
When I started my own practice, I was hesitant. Was it going to work? Would I be able to pick up clients? Could I be profitable? What would my expenses be? How much would I charge? So many questions came to mind and still do, daily. As I started to pick up new clients, I felt confident that my new venture would be worthwhile. As my book of business grew, my 40-hour work week was filled with client-related to-dos, leaving the weekends with all my CEO and admin duties. If I or one of my boys got sick, there was no wiggle room for down-time. Deadlines had to be met regardless of my or my family’s health and I did what I needed to to provide good service to my clients. It was tough. I decided I needed to hire someone to bring capacity to my solopreneurship. I did just that. I brought in a bookkeeper to help with ongoing bookkeeping and administrative tasks. I thought, “now I’ll be able to grow faster.” We did gain capacity and now if I have a sick child at home, I know that someone is working on the business and we’re still moving even if I’m not sitting at my computer.
But what I didn’t plan for was the increase in quality of the services we were providing. What does that mean?
Hiring a bookkeeper that could take on 60% of the client work that I was doing allowed me to take a step back and spend a portion of my time reviewing her work. That means that I was able to catch mistakes that I may have otherwise missed. I can talk through issues with her and she can provide valuable feedback that I can use to make decisions. I can now spend time doing work that I enjoy like budgeting, financial statement review, business and process development. We can provide more value to our clients. We can provide a higher quality service.
This got me thinking, you see many companies outsource their accounting and bookkeeping until…they have enough work to hire a person in-house. Well this makes sense, right? No! The person that you want to hire basically needs to be a jack of all “accounting” trades. You need an AP clerk, a payroll specialist, a staff accountant, a controller, and a CFO all in one person. So basically, you’ll have to compromise…do you want to hire a CFO at a staff accountant’s salary? Do you want to hire an AP clerk at a controller’s salary and do you want your CFO to pay the bills and then perform high-level analytics and your budget in his/her spare time. So many pieces to a puzzle that are very difficult to piece together in one FTE. So unless you’re ready to hire and build an entire accounting department in-house, outsource these functions for now. You’ll be happy you did.
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