Hello gang, this is Michael Hsu from DeepSky
Today I'm gonna talk to you about - Outsourcing.
I believe that outsourcing
is the only way to go these days
if you want to grow a small business
rapidly and successfully.
In addition to that outsourcing
offers us a few benefits :
First of all,
if you deal with that outsourcing shop,
you're already experts at hiring accountants
or developers,
depending on what you're outsourcing.
Second,
you're going to be cheaper
than hiring someone in-house.
You have to understand that
any employee that you brought on board for
is going to have 20% loaded cost.
In addition to that,
management,
utilities,
etc, etc, etc.....
They're all added cost.
And finally,
in today's world,
you don't really need to work 40 hours.
We already know that
if we hire somebody fully hours,
their productivity is anywhere
between 20% to 30%.
Now that we're about into an outsourcing :
What exactly is the difference between
bookkeeping and accounting?
Why should I pay extra for accounting
when bookkeeping can do?
So, in your business,
there're a lot of things going on every single day,
there are people that you pay,
there are people that pays you
for the work that you do.
And then, if you do inventory
things coming in and out.
And, everything is going on,
everything is happening.
What a bookkeeper does
is to take everything that is happening
and then, they record it onto a ledger.
It's a very data entry task.
It's a recording of events.
Now, on the other hand,
What does the accountant do?
On the face of it,
seems like they do the same things sometimes, right?
So, the primary difference is :
while bookkeeper record what had already happened,
and the accountant is part of that process.
They are part of creating events
that you're eventually going to record onto a ledger
Sending invoices,
collecting payments,
making sure those payments are collected correctly.
They are part of the process of
making sure who we need to pay,
how much we need to pay,
and how often do we pay them.
They pay them,
they take care of it,
they do report generation,
they do analysis.
That is what an accountant do.
Just think of it this way :
A bookkeeper record what had already happened,
and an accountant is a part of
that process to create events
that you eventually record.
So, this question comes up
time and time again in my entrepreneur group
Just start it off at the basic :
$500 dollars a month,
it's pretty much what you'll pay
for a basic set of books
to get your tax return done.
Now, between $500 to $1500
There are a lot of automated bookkeeping service
that are now designed for this space.
And then, again, remember,
these are low touch
and high automation companies.
So, again,
pretty good if you just wanna make sure
that somebody is looking at your numbers
and let you have a set of reports to look at.
But, don't expect too much
from a consulting or controllership level for
Now, once it gets to the $2000 to $6000 a month range,
you should really expect a good partner.
They're really setting down with you,
and then helping you sort things out.
Like, system processes,
having conversation with you on your numbers.
And then, the higher price you get,
the more complex reporting.
Or, the higher price you get,
the more strategic stuff.
You know,
what metrics we are tracking,
what reports we are looking at,
what numbers are we looking at.
And, that's what you should be expecting to
get at that level of services.
And then, remember,
a good outsourcer or a good vendor
should never be afraid of
helping you make that decision.
And then, bringing someone in-house
if they truly have your financial well-being in mind.
Until next time,
I hope you guys growing profitably.
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