How to decide between outsourced bookkeeping services and in-house bookkeeping services

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In today's world there are ample of opportunities to reduce the cost of your operations. One area where this is all the more true is the bookkeeping services. The outsourcing provides wonderful cost reduction opportunity especially in the current environment where every company is staring at the long drawn out recession. I am listing a number of factors which you should look at if you need to decide between outsourcing and captive bookkeeping.

Things You Will Need

Calculator
Computer
Decision matrix tool

Step 1

The first thing that you need to look at is the cost. Check the bookkeeping rates charged by the firms that offer the bookkeeping services. Compare those with the total costs you will spend to manage the bookkeeping yourself. While calculating the costs include employee salaries, cost of training, cost of software and maintenance. Also include the cost of the extra office space

Step 2

The second thing to look at is the efficiency and the reliability of the service. That will entail looking at high cost providers versus the low cost outsourced bookkeeping service providers. Compare the reliability of the service they offer with efficiency of the services that you get from your in-house staff.

Step 3

The third thing to look at is the variability of the staff. With an outsourced staff you can easily augment the services as well as reduce the services with just a months notice. You will need to compare that with how you will achieve that with your in-house services.

Step 4

The next thing to compare is the data security. There have been number of issues of data theft with the outsourced companies. Make sure that you have due diligence done before you finalize a particular vendor.

The last step should be to assign a weight factor to each of these factors before you arrive at a decision

Tips & Warnings

Always check if the outsourced services are going to be in India or domestic US based services. That will help you evaluate the data security better. The time zone difference will help you better.