A skilled accounting team is a non-negotiable for meeting the challenges and opportunities in today’s volatile government marketplace. The dilemma for many GovCons is how to afford the financial support required without stretching beyond their budget.
Your GovCon Faces a Catch-22
In today’s business environment, where every dollar counts, “firms need to operate with strategic foresight, agility, and ruthless efficiency,” according to the GUAGE 2025 Report, the latest annual analysis of government contracting industry trends. At the same time GovCons focus on wise resource management, they must also cope with new compliance requirements (Federal Acquisition Regulation, Cybersecurity Maturity Model Certification), federal funding cuts, and economic volatility.
Invest in Staff or Outsource? Run the Numbers to Clarify Costs
Marketplace navigation and financial realities often prompt GovCon leaders to consider whether outsourced accounting makes more strategic and fiscal sense than an in-house team. The discussion below provides some general guidelines to help you weigh costs. Your numbers will vary by location, market, industry, and your company’s specific accounting needs.
- Salaries & Benefits
A fully-staffed accounting department could cost upwards of $280k+ per year.
Salary figures do not include benefits such as insurance, paid time off, retirement plans, and workers’ compensation. GUAGE reports an overall GovCon fringe rate of 30% for these non-wage compensations.
- Recruiting/Onboarding/Training
The average baseline cost for recruiting is $4,700 per position, according to the Society for Human Resource Management (SHRM). That cost can climb 10-20 percent for employees that require security clearance, reports ClearanceJobs. Recruiting for top executive positions in larger accounting departments can reach $28,000 or more. Onboarding costs can climb to $4,100 per hire and include learning systems, background checks, and initial productivity loss as a new hire gets up to speed. U.S. businesses invest between $1,000 and $1,420 per employee annually for training.
- Turnover
Not all hires work out as planned. Turnover can cost your GovCon as much as one-half to two times an employee’s salary, says SHRM. Added to that are the intangible costs of delayed projects, loss of contract knowledge, team disruption, morale dips, and payroll and invoicing left hanging.
Uncertain Times Raise the Stakes
The churning political and financial uncertainty in the current government marketplace raises the stakes for hiring accounting expertise and putting the best financial systems in place. When you consider outsourcing to a GovCon finance and accounting expert like CAVU, price is not the only factor to consider:
- The outsourcing fee covers much more than salary and benefits. Outsourced accounting also eliminates the fringe costs and overhead of in-house staff and the time and expense of recruiting, onboarding, and training.
- CAVU staff are experts in GovCon accounting and financing—specialists in the skillsets needed for compliance, financial strategy, budgeting, and more. You can call on the expertise you require as you need it.
- Outsourcing to CAVU is scalable to your company’s needs and promotes stability through standardization and continuity of service. Business expansion or contraction due to market circumstances no longer mean scrambling to hire or downsize. Retainer billing also means more predictable costs.
- CAVU keeps current with advanced accounting software and other specialized technology platforms so you can leverage the latest tools for compliance, revenue enhancement, and improved efficiency. Better reporting and monitoring capabilities help mitigate compliance risks by keeping up-to-date with regulatory requirements to help ensure your GovCon’s financial practices align with industry standards.
Feel free to contact CAVU for more information on how our outsourced accounting options make sense for successfully navigating government contracting in uncertain times.