For just about every sensible small and medium sized trade business, cost and value for money will always be a determining factor when choosing a bookkeeping and accounting solution that is right for them.
Because of this, I wanted to write this article breaking down the comparison between in-house employees and outsourced professionals because you’re always going to be paying for bookkeeping and accounting in some capacity, so you want to know which option makes the most sense.
If your finances are not being handled and you’re trying to do it all yourself, you’re paying for it in your time, mayhem, opportunity cost, stress, mistakes, errors, business and personal risk or ATO penalties…
Or you’re paying in-house staff (typically inexperienced ‘data entry clerks’) which comes with its own challenges of managing an employee, overheads, training, hoping that they’re doing their job as well as a certified professional (or at all) and still having to pay for outside CPA advice, guidance and tax planning, lodgements and returns…
OR you choose an alternative option suited to those looking to get back their time, remove stress, have greater financial clarity, make better decisions, boost their income, and grow their wealth.
This alternative is the outsourced accounting and bookkeeping model, where everything is handled FOR YOU, for a fixed cost under the one roof in a one stop shop solution.
Now, depending on the size of your business and the services that you require, this fixed monthly cost will vary between $1,250 to $2,500 a month.
But what’s interesting is the fact that even at the higher $2,500 per month, the cost is substantially lower than a full-time OR part-time bookkeeper and accountant combo.
And that’s only considering fixed price…
NOT even considering value provided.
So, what’s it worth to your business to have a team of certified full-service bookkeeping, tax, and management accounting specialists that are working to support and coach you with your finances, full time, on call, proactively helping you with your tax planning, accounting, numbers, and your income?
Let’s look at the options our typical client is usually facing before hiring our team here at Trade Business Accountants.
OPTION ONE: Do it yourself
While the cost isn’t exactly clear, we’ve seen firsthand the damage caused by this, and because of such, option one is NEVER the right option.
It’s quite common for tradie business owners to attempt their own bookkeeping, accounting, profit and cash flow planning often without any extensive training.
This can be, at best, a waste of time, and at worst, a real danger to your business, particularly if you base business decisions on inaccurate information and assumptions (which I’m seeing ALL THE TIME).
You have plenty to worry about already, from marketing, sales, delivering work, admin, to leading employees, to ordering supplies and everything in between.
With a professional taking care of the critical financial functions, you won’t have to worry about financial errors derailing your business – And you’ll cut down on the opportunity cost!!
Business owners who choose to manage the financial aspects of business on their own are often motivated by saving money.
However, the opportunity cost of spending your time working with data instead of investing that time into your customers, suppliers, and staff will be far more significant.
With the right accounting and bookkeeping team in your corner, you’ll see incredible growth, profit and cash flow.
You’ll have more time and energy to devote to running and growing your business, as well as an advisor who can offer guidance in relation to financial decisions.
This way, you’ll have more confidence that your HARD WORK will ACTUALLY contribute to better profits and cash flow.
OPTION TWO: Part-Time Bookkeeper/admin Assistant @ $25 per hour
2 days a week:
$1,600 / month
Now factor in:
Payroll taxes, superannuation, medical/benefits, vacation/sick days, equipment, office space, supplies, placing ads, screening interviews, trialling and training:
Super $1,920
Sick days $2,000
59 hours accrued annual leave (48 week working year) $1,476
Misc. office supplies and training $4,000
Totalling an additional $783 / month
Now factor in:
For tax planning, tax lodgements, and company/personal tax returns.
$416.66+ / month minimum
Conservative Total: $2,799.66 / month
Note: Not considering if the staff member is actually good, efficient or your coordination fatigue in handling and overseeing everything.
Annual Total: $33,595.92 +
OPTION THREE: Full-Time Bookkeeper/Admin Assistant @ $25 per hour
5 days a week:
$4,000 / month
Now factor in:
Payroll taxes, superannuation, medical/benefits, vacation/sick days, equipment, office space, supplies, placing ads, screening interviews, trialling and training:
Super $4,800
Sick days $2,000
59 hours accrued annual leave (48 week working year) $15,600.21
Misc. office supplies and training $4,000
Totalling an additional $2,200.01 / month
Now factor in:
For tax planning, tax lodgements, and company/personal tax returns.
$416.66+ / month minimum
Conservative Total: $6,616.67 / month
Note: Again… not considering if the staff member is actually good, efficient or your coordination fatigue in handling and overseeing everything.
Annual Total: $79,400.04 +
Option four: Full-Time Outsourced ‘Trade Business Accountants’
5 days a week:
$1,250 - $2,500 / month
(Depending on size)
Fixed cost covering:
Bookkeeping
Xero optimising
Chart of accounts re-structuring
Compliance and risk mitigation
Payroll set up and management
Receipt management
Software integration
Management accounting
ATO negotiations
Tax planning
Tax lodgements
Company tax returns
Personal tax returns
Monthly reporting
Proactive advice & financial coaching
Email + phone support
AND ZERO headaches!!
Total: $1,250 - $2,500 / month
Lowest tier annual total: $15,000.00 +
Annual total highest tier: $30,000.00 +
Which again, is only considering fixed price… NOT even considering value provided.
Note: Check out our two most recent case studies, our plumbing client, and our landscaping client.
You’ll have an outsourced CFO!
The average Australian CFO earns a base salary starting from $155,000.00 a year!
And you can get that SAME value from an outsourced CFO at significantly less cost...
As your right-hand person in the business, Trade Business Accountants takes responsibility for your financial challenges and provides you with the data you need to make well-informed decisions, so that you can get on with running the show.
THIS... is how outsourcing your accounting and bookkeeping will MAKE you more money.
If you're an electrician, plumber, painter, carpenter, or any other tradie business owner who is looking for assistance with your tax, accounting, and bookkeeping - click here to learn more!
