Most small business owners realize that they require bookkeeping services, however, they are not certain whether it is advisable to hire an individual who will work as a bookkeeper or engage the services of an independent contractor. It has been discussed that each of these options has its advantages and disadvantages.
Here’s an overview of the key differences between employed and freelance bookkeepers to consider:
Hours and Availability
normally, employed bookkeepers work standard working hours as may be pronounced by you. This gives you more control and gives you a better idea of the coverage that you require for your business’s bookkeeping. It also means paying for idle resources if the workload differs, for example, during night shifts.
A freelancer is his or her boss and can work at any time of the day, and does not have a fixed schedule. It also allows them to be versatile and work with several parties. Sometimes they might be available to answer your random accounting questions that occur to you at a particular instance.
Cost and Overhead
Payroll also encompasses the wages to be paid to employees, social security tax, workers' compensation, rent or lease of office space, stationery, computer or other equipment, software usage licenses, employees’ paid vacations, and other reimbursable expenses. These costs are incurred regardless of the state of the market and the level of activity.
Independent bookkeepers do not require you to pay for overheads and other expenses that are usually associated with full-service firms. This enables you to save costs such as paying your staff’s wages and providing them with benefits such as health insurance, rent for office space, and other consumables. Sadly, freelancers have the liberty of charging as they wish and may be overcharging for what an employee is paid per hour.
Skill Level and Experience
Each employee can excel in bookkeeping to different extents. Eventually, you can offer workplace learning opportunities that target your firm’s financial processes and approaches. That shows that employees with lesser experience will take time in a certain project at the initial stages.
Senior independent contractors have a lot of accounting knowledge and experience in managing accounts and have developed specific strategies for working with several clients. However, other freelancers who are not used to self-employment might still be in the process of perfecting their services and expertise.
Business Knowledge
An employee learns all about your business and the going on within the business since he/she has handled the financial books of the business for a long. This can more naturally make them better financial managers. But it may also have the disadvantage of withdrawing them from advanced technologies and fresh approaches.
Business freelancers are apt to have less information about your exact business especially when they initially assume their positions. However, due to their diverse clientele base, they may understand more about various contemporary accounting tools and approaches.
Finally, consider the budget, the extent of work that your staff can handle, the level of control that you would like to have over the accounting department, and the gaps in your knowledge that you would prefer your new software to fill. To some companies, it is the perfect combination to have a full-time employee bookkeeper plus an outsourced one for doing complex or supplementary tasks.