There is a myriad of information out there regarding the use of outside consultants. The debate raging on and probably will do so for years to come.
Some a very pro the idea and some are very against the idea. Both have good reasons for their side of the story.
Here are some (certainly not all) of the pros and cons for outsourcing work to outside consulting firms. This is particular for the accounting and tax side of your business but can be used in other areas of the company too.
PROS / POSITIVES
When using a consultant, one must use a contract.
Both the parties are bound by this agreement and this means that the service you are paying for must be delivered according to the agreement.
When the service is not delivered, there are legal steps you can take.
The belief of outside consultants is that they are more expensive. This is not entirely true.
Hiring of staff is actually more time consuming and costly in the long run due to several factors:
Salary every month for full time position,
Administration of salary payment and statutory payments
The 1% UIF cost monthly
The employee is entitled to leave – both annual and sick leave.
This may be over a critical time of the month,
An employer is unlikely to deny leave without a very good reason
No need to use them long term
This is pretty straight forward. You use their services when needed.
CONS / NEGATIVES
The expense can run out of control and more than employing someone full time.As with everything in business and in life, if you dont keep track of and monitor things, it will run away from you.Consulting fees are exactly the same.
A agreed service level agreement will help in mitigating the risk of the fees escalating out of control.
The owners are usually the ones that slip up here.
Breach of contract by service provider.
This happens in many contractual arrangements. Provided you have a legal agreement in place, you have grounds to recoup the costs.
Unfortunately, this does not get the work done on time.
More difficult to find what you need
Many outside consulting firms are geared to a specific size of organisation.
As a small business, one often battles to find a match because the firms are aimig at corporate clients. This results in either massive fees which you cannot afford or ineffective service delivery.
No team inclusion
You want to have you company to have a good atmosphere built by the people you hire. When outsourcing, this does not happen.
It can even promote your current employees idea of becoming one of the outsourced help.
Building a team in a business also creates an opportunity of a succession plan for your business.
You may not be around forever and you should not want the company to die because you are not there. The team you build can carry on the business if this happens.
Whether you outsource or not, really is dependant on the individual company the circumstances that surround the decision. It varies from industry to industry and even company to company. The decision lies with the decision makers of the company but also the more experienced staff can be or should be consulted as an opinion.
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