Your company has reached a familiar crossroads in the GovCon industry: You no longer have the capacity or expertise to meet your accounting needs.
Perhaps your firm is a startup that’s gotten good early traction in the marketplace. Maybe your leadership is world-class in its area of technical expertise, but new to government contracting. Or you’re an established business with a strong growth trajectory that’s lifted you to the next level.
Whatever the case, you’ve outgrown your accounting team and face an important choice. Do you add to your in-house staff or outsource the work to an accounting firm?
It may seem to make strategic and economic sense to entrust crucial financial functions to your own in-house staff. However, when you weigh the costs and benefits, you may discover that it’s outsourcing that provides the most market advantages. Here’s why:
1. When You Do the Detailed Math, You Get a New View on Costs
In-house
- Currently, a staff accountant in the Washington, D.C., area earns $70,000 a year. Salaries climb into six figures as you move up the hiring ladder to senior accountant, controller, and chief financial officer.
- Next, factor in the overhead that goes with the care and feeding of any employee. This includes, but is not limited to, payroll taxes; health and life insurance; retirement plan; vacation, sick, and family leave; office space and equipment, and management of the accounting team. Don’t forget the costs of hiring and training as well. The cost of Fringe Benefits, Facilities, Management, and other administrative costs typically adds 50% – 100% to the salary cost of an employee.
Outsourced
An experienced GovCon accounting firm with broad capabilities and deep experience does require an investment. When you receive a quote for a monthly fee that will be one of the larger items in your general and administrative pool, it may look like in-house hiring is the cost-effective option. But consider:
- Time is money. When you offload accounting to a team of experts, your core talent can focus on business development and delivering the products and services that polish your reputation in the marketplace.
- The costs of hiring, training, and managing an accounting staff are someone else’s problem. Yes, you pay a fee, but the accounting firm carries the burden of administering and tracking staff hiring, salary negotiations, training, turnover, and benefits packages.
2. There’s More to GovCon Accounting Than Balanced Books
- There’s no doubt that your business can’t succeed without keeping its own internal accounting house in order. But to make your mark as a GovCon, you must create business systems that comply with Defense Contract Audit Agency regulations. DCAA performs contract audits for the Defense Department and many other federal agencies.
DCAA rules are complex and ever-changing. Failure to keep up and comply can set your firm up for lost profit opportunities, hefty fines, and perhaps worst of all, a reputation among clients for causing contract complications. Outsourcing allows you to hire the depth of expertise you require in multiple areas without sweating to meet your needs on a limited staffing budget.
- Similarly, the strategic advantages of CFO-level financial advice may be just the input you need to meet your business goals. Outsourcing allows you to hire executive-level savvy professionals to help develop strategy, align internal processes with that strategy, suggestions to increase business, and boost investor value guidance.
3. You Can Scale the Services You Get to the Help You Need
Sometimes you need basic accounting help to straighten out your books. Sometimes you need a visionary executive to steer your market strategy. Sometimes you just want to nail your DCAA audit.
Why be forced into an either/or staffing choice?
- Outsourcing allows you to scale services as you grow incrementally or enter new and unfamiliar territory. The flexibility that comes with outsourcing works to your advantage. You can get the amount of support you need, with the level of expertise you need, for the period of time that you need it.
- Outsourcing your accounting also gives you access to a whole team of professionals with collective knowledge and experience to support your organization. Even if you have an internal accounting team, you can quickly access the additional expertise you need.
You can download a one-pager with this information here.
If your firm needs accounting help beyond your current resources—at any level of complexity—it makes sense to consider outsourcing as a strategic choice. Feel free to reach out and explore CAVU’s accounting packages. We offer strategic financial support for decision-making, government contracting advice, virtual back-office accounting and financial functions, and much more.