5 Great Reasons You Should Outsource Your Accounting and Payroll

If your business is currently handling finance functions such as bookkeeping, payroll and accounting using internal staff, you may be wondering if this is the best approach. Sometimes it seems like accounting and payroll staff are busy at month-end or just before payday, but they really don’t have much to do at other times of the month. Finding and retaining skilled employees is a huge challenge in the Canadian labour market, so turnover is always a real concern.

In almost all cases, unless you are a large business, it makes far more sense to outsource these functions to a specialized outsourcing firm. At Xen Accounting we have helped countless growing companies make a smooth transition from an in-house to an outsourced finance system. Here are 5 of the key reasons why this kind of move makes sense:

Efficiency

Outsourced accounting and payroll firms handle multiple clients with different reporting 

dates. They want to help you build a smooth and efficient monthly process around key 

accounting, payroll, and reporting functions. They employ logical schedules, with clear 

client approvals and sign-offs, and there is no extra “busy work” that sucks up time and 

energy. In short, the goal of outsourcing your accounting or payroll should be to 

increase efficiency and reduce time spent on these “non-revenue generating” functions. 

Furthermore, as one of Canada’s leading cloud accounting firms, Xen Accounting is 

taking the efficiency gains you can expect to the next level, by employing the latest 

cloud technology.

Expertise

By outsourcing your accounting and payroll to a specialized firm like Xen Accounting, 

you are gaining access to an entire team of experts in the field, and you will benefit 

from best practices. On the other hand, if you ask internal staff to handle these 

functions, you are usually relying on only one person’s experience or skills. Sometimes 

you may get lucky and find a superstar staff whom you can rely on, however, we often 

see cases where internal staff did not have the full range of skills or expertise to handle 

core finance and payroll functions.

Cost Savings

There is usually substantial cost savings to be had by outsourcing your payroll and 

accounting functions. Full-time payroll and accounting staff in Canada tend to be very 

expensive hires, and unless you are a very large firm, there may not be enough 

accounting work volume to necessitate having a dedicated full-time staff. For example, 

employing one full-time experienced accountant and one experienced payroll staff can 

easily cost upwards of $150,000 per year. An efficient outsourced firm can usually 

handle these functions for about 1/3 of the cost. These savings can be re-deployed to revenue-generating hires.

Removing HR Risk

When you have internal staff handling your accounting and payroll, you have a single 

point of failure situation. What happens if your accountant or payroll person suddenly 

becomes ill or quits? Can you afford to have a situation where your employees may not 

get paid on time or financial reports to head office are late? By outsourcing these 

critical back-office functions, you will no longer have a single point of failure but are 

gaining access to a whole team of experts who will ensure things stay on schedule.

Furthermore, employing internal staff in Canada comes with a whole host of potential 

risks and responsibilities. Why not allow these functions to be done by an external 

partner that is highly specialized.

Confidentiality of Financial Data

Your accounting and payroll data is highly confidential. Granting access to this 

information to your in-house staff is always a very risky endeavor, no matter how 

trusted they are. Having a team member having access to peoples’ salaries can lead to 

unnecessary conflicts and risks. We like to work with our clients to determine who 

(generally only key management) has access to payroll, bank, and financial reports. 

Maintaining this confidentiality and discretion is of critical importance.

About Xen Accounting

Xen Accounting is a virtual accounting firm designed for modern day small business owners with one goal in mind: to create a truly pain-free accounting experience. Through technology and a forward-thinking approach, Xen Accounting is focusing on delivering professional accounting services for businesses in the digital age. To contact Xen Accounting, please email info@xenaccounting.com.