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  #21  
Old 05-13-2013, 10:08 PM
birddseedd birddseedd is offline
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Originally Posted by maynardGkeynes View Post
This is actually what business schools call a "vertical integration" issue, and the studies show that doing work in-house is not inherently cheaper than outsourcing it, and can in fact cost you more in the end. It depends on whether they can do the 40 hours of work at a lower cost than you can. Since they are specialists in accounting/bookkeeping, they can probably do the 40 hours of work more efficiently/cheaper than a lawn care company can, just as it would be cheaper for a small accounting firm to hire a lawn care company to maintain their property. However, if you are able to do the bookkeeping yourself via quick books, that might be cheaper because any work you do for yourself is called "imputed income," which is not taxed, whereas the guy who does your books for a living pays income tax on what you pay him, and has to charge you for that. It's a size and scale issue, really.
in other words. they pay their employees less.

laughs.

i think technology has gone beyond this for alot of instances. people do not know how to use it tho. most people in this industry input every single invoice they make manually. in fact. quickbooks is capable of doing 40 hrs of work in mere minutes. but this depends on alot of factors. i do mostly routine work. weekly mowings. so its easy for me to write an invoice for the one or two landscapes i do. and then all the rest of it jsut import an excel file and be done with it. hours of work done in a minute or so.

Thanks for the info tho. i learned a bit.
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wait why do you prefer Scag? I thought you owned a Bobcat that mowed the first American Colonies
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  #22  
Old 05-14-2013, 08:59 AM
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LindblomRJ LindblomRJ is offline
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Join Date: Apr 2006
Location: Rapid City, South Dakota
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Quote:
Originally Posted by maynardGkeynes View Post
This is actually what business schools call a "vertical integration" issue, and the studies show that doing work in-house is not inherently cheaper than outsourcing it, and can in fact cost you more in the end. It depends on whether they can do the 40 hours of work at a lower cost than you can. Since they are specialists in accounting/bookkeeping, they can probably do the 40 hours of work more efficiently/cheaper than a lawn care company can, just as it would be cheaper for a small accounting firm to hire a lawn care company to maintain their property. However, if you are able to do the bookkeeping yourself via quick books, that might be cheaper because any work you do for yourself is called "imputed income," which is not taxed, whereas the guy who does your books for a living pays income tax on what you pay him, and has to charge you for that. It's a size and scale issue, really.
Outsourced, you will likely have a true accountant and not a bookkeeper. Since they are specialized it would be more efficient. Efficiencies are also gained when looking for expenses that drain your profit and manage tax liabilities. The other thing to look at is the end result. Are you getting a set of books or a true accurate accounting of your business? Contract out your accounting and get a CPA who can offer you guidance.

Outsourcing accounting services is akin hiring a company to more a commercial property. Sure, you could have an employee mow the property, or you can contract it out.

Do it in house, that means an investment in equipment, parts and fuel and wages. The contractor has the same expenses. However, those same expenses are divided up over each account the contractor has.

So it may very well be cheaper to contract it out. By the same token it might be cheaper to do it in house. Size and scale are often the deciding factors.
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