Companies of all sizes can benefit from sending certain job functions outside rather than dealing with them in-house. Some of those tasks may be infrequent or require special equipment; others may fall into the category of-ongoing maintenance, such bookkeeping, product management, information management, accounts payable and receivable, or human resources.
Regardless of the type of company you have - service, retail, or manufacturing - there are some activity involved in operating that will benefit for outside expertise. In fact, it makes sense to outsource any activity that someone on the outside can do better than you. As the company owner, you then free up your own time and talent for the more profitable aspects of running your business.
Bookkeeping and keep up with payroll requirements is almost always good to outsource. Small business just can't do it the way an outside payroll management firm does. Computer maintenance is another area where it may make sense to outsource, by buying a small amount of expertise and service that would take you or other employees a long time to master yourselves.
There are also good reasons to ask for help from a seasoned business executive when deciding what to outsource and how to select the best outsource for your business.
- To make sure the IRS will view your outsourcing partner as an independent contractor verses an employee of your business. If the IRS sets aside your outsourcing contract, you may find yourself paying that individuals Social Security taxes and possibly other penalties.
- It is difficult for a business owner to step outside their own business and analyze which function are most effectively done by owners and employees verses a professional outsource.
Our thanks to Richard Strug, Greater Princeton Area SCORE (Chapter 631) for posting the core copy for this article.
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