Table of Contents Most businesses choose to manage their accounts payable in-house for various reasons, as it can often seem like the most straightforward way to maintain control over finances.
However, while the advantages may seem simple in principle, there can also be a number of downsides, many of which aren’t always obvious at first glance. And if you’re running a business where you’re pressed for time, or looking at ways to streamline your budgets, you may be surprised at how many associated costs can build up.
Here, we’ll break down some of the biggest hidden costs that often arise from managing your accounts payable in-house, and cover some of the key ways in which outsourcing can help.
Salaries And Benefits Accountancy is a highly skilled discipline, so it follows that accountants tend to command competitive salaries, which can impose significant costs on your business from the off. As well as these, there are also the additional costs associated with offering benefits like retirement plans and paid time off. These are often necessary to attract and retain top talent, but they can all start to quickly make a noticeable impact on your budget.
Recruitment, Training And Development It’s not always easy to find the perfect fit for your company, so recruitment can sometimes be a lengthy process. This can involve advertising, interviewing, and potentially even agency recruitment fees, all of which carry their own costs.
Once you’ve got your team on-board, there’s then the matter of training. Even if your new hires are relatively experienced, they will still need some level of training for the sake of due diligence. More junior staff on the other hand will sometimes need particular attention. All this can drain further time even once the recruitment process is complete, which can cost you significantly in lost productivity.
Ongoing Training And Compliance Compliance is always a key consideration for any department of your business, but it’s especially crucial for accounting, given the UK’s notoriously complex tax environment. An in-house team will need frequent training and professional development as new regulations, technologies and best practices emerge. This can be notably time-consuming and costly in terms of both the lost productivity, as well as the occasional more direct costs that may arise from completing necessary courses and certifications.
Technology, Software And Infrastructure When you’re establishing and maintaining an in-house accounts payable team, you’ll always need to give due consideration to giving them all the tools and resources they need to properly do their jobs. An in-house team will need dedicated software, often specialised, and with a high degree of security to give you peace of mind. That’s to say nothing of the hardware and physical infrastructure they’ll require as well.
The cost of buying, implementing and maintaining that can all be very substantial. What’s more, once again there’s that ongoing industry evolution to consider. As technology and processes evolve, you’ll need to stay at the cutting edge to be competitive, and that can be costly in itself.
Holiday Cost And Turnover Accounts payable is a business-critical activity, and therefore not a job that you can afford to have unattended for too long. So if any members of your in-house team take annual leave, or become ill, then work can often rapidly pile up, or require you to bring in assistance, either from another member of your team, or from outside the business.
None of the above scenarios are ideal. They can disrupt your business at large, or incur a sizeable extra cost, since freelance bookkeeping will typically work out to significantly higher than your regular staff’s daily rate.
You will also need to plan for the financial impact of turnover, when any of your team leave and need to be replaced. That means you’ll have to contend with all the recruitment, training and development costs we detailed above, often from scratch.
Futureproofing And Strategic Planning Costs Internal accounts payable teams have intensive jobs, and this frequently means that a lot of their time and energy tend to be taken up by day-to-day processing. That’s time that can otherwise be put to planning for future growth, adapting to market changes, or implementing new financial strategies. All this in turn can pose a notable barrier to growth, slowing you or perhaps even preventing you from taking your business to the next level.
How Can Outsourcing Accounts Payable Help? Quite simply, an outsourced accounts payable team can help you effectively address the issues above by giving you significant amounts of extra time and flexibility. An outsourced team provides all of the expertise and skills of an in-house team, but saves you from the majority of the costs, including recruitment, training, infrastructure and ongoing compliance.
What’s more, an outsourced team can adapt quickly to the changing needs of your company, enabling you to scale services up or down depending on your workload, or seasonal fluctuations. That makes it an excellent way to free up more time and energy for your team, enabling you to focus more on future opportunities and growing your business, while having peace of mind that all of your financial affairs are accurate, efficient, and responsive to change.
How Can We Help At Consumer Links? At Consumer Links, we provide comprehensive market-leading Business Process Outsourcing (BPO) solutions, designed to help you reduce costs and improve efficiency. Accounts Payable Outsourcing Get in touch
