Outsourcing versus Contracting

Contracting out work and 1099s are terms every business owner knows, especially in finance and accounting functions. Many small business owners look to supplement their workforce with outside sources to specialize functions without adding to their overhead costs.

Independent contractors utilize 1099-MISC forms and cover their own employment taxes. This can often benefit employers by reducing not adding to their and provides more staffing flexibility. The IRS categorizes contractors in three ways: behavioral, financial, and by type of relationships between the contractor and employers. There are some negatives with this model.

Employers have less control in general over contractors, including the quality of work and how much time is spent on what projects; which is in large part why outsourcing is a better, longer term option for businesses looking to supplement their current staff.

Outsourcing provides a specific structure to solve a need. Whereas contractors provide a short-term solution to what is usually a project, outsourcing models like ours integrate our team into yours. In short, it provides the option to cover entire departments like account, payroll, and HR.

Improving focus for rapidly growing companies is one of the key reasons we find our clients are looking to outsource essential functions. When less important tasks take less time, vital tasks gain more traction with owners, partners and founders.

Another key benefit is knowing exactly when tasks are being completed and that the outsourcing firm shares responsibility with your team to keep things on track.