3 Benefits of Outsourcing
Outsourcing is a general term used to describe the act of hiring a third party business to perform a specific task within your business. There are lots of benefits to outsourcing and since it is becoming more and more popular with the work-from-home workforce growing, it’s important to know all about your options when it comes to outsourcing. Some common tasks that businesses tend to outsource include payroll, bookkeeping, IT help, and personal assistant work. Since the benefits of outsourcing can vary slightly depending on the job your outsourcing, I will be coming from the perspective of outsourcing work that pertains to your business’s finances (i.e. payroll, bookkeeping, taxes, etc.). There are many more than just 3 benefits of outsourcing, but, to me, these are the greatest advantages.
Keeps private information out of the workplace
There are tasks that your business may require that are not good for an employee within the workplace to perform due to the sheer confidential or private nature of the task(s). For example, employing an office manager that runs payroll for the whole office may not be in the best interest of a smooth running workplace because you’re giving one person very personal information about everyone in the office that they are managing. This also applies to an office manager or assistant that does your bookkeeping. If you want your office manager to establish a fair and comfortable workplace for all employees, outsourcing your payroll and/or bookkeeping procedures may be the way to go.
Another job that you may want to outsource is that of a personal assistance. Many owners require an assistance to free up their time to run their business, but having an employee run your personal errands can be a bit of an uncomfortable intrusion for both the employee and the owner. By carefully considering the aspects of each task, you can decide if a task is confidential or private in nature and needs to be outsourced.
Cost effective
This is probably the single most greatest advantage of outsourcing because not only are you avoiding employee costs, but you are also avoiding potential equipment costs. Let me explain: Obviously, outsourcing is different than hiring an employee (blog post on this coming soon!). One of the differences is that you pay employee taxes and have to run payroll which will also incur fees. When outsourcing, the responsibility of paying taxes falls on the third party contractor so you just pay for the work. This not only saves you money, but also simplifies the payment process because, in most cases, the responsibility of payment falls on the contractor as well. Another employee cost that is cut when outsourcing is the cost of training. Outsourcing allows you to hire someone already equipped with the necessary skills to do the job with minimal, if any, training. You no longer require a long drawn out training program!
The second cost effective benefit of outsourcing is one that most people do not think about. When you hire an employee, you are responsible for providing them with all of the materials and equipment that they will need to perform their job. By outsourcing any technology based tasks, the majority of contractors use their own equipment. So you no longer are paying for new equipment, equipment repairs, or software maintenance!
Specialized skill work
As I mentioned before, outsourcing to a third party contractor cuts training costs because you are hiring an individual that is equipped with a very specific skill. When a contractor has one very specific skill set, chances are, that person is an expert in that specific area. These contractors are ready to jump in and start working for your business giving you better results and faster turn around times. Since finance is something that applies to every business in every industry, you can even hire a more specialized tax preparer or bookkeeper by hiring someone who has a niche market within your specific industry. For example, a bookkeeper who specializes in e-commerce (me) or an accountant who specializes in the retail industry.
Outsourcing can save your business time and money, but you may be hesitant about taking the first step in that direction. I would implore you to reach out to a potential contractor and inquire about the ways that they can help you to grow your business - you won’t be sorry! Leave questions in the comments - I’ll be happy to answer them!
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