In-house accounting vs outsourcing accounting!
When a company starts to grow, their financial requirements grow too. Therefore, owners are forced to find someone who will take care of that seeing as they don’t have that accounting know-how and skills.
The big question for the owner now is: will he hire an in-house accounting staff or will he go for outsourcing to an accounting company, which many companies consider is the better choice toward excellent financial management.
Many businesses tend to find it a difficult choice between in-house staff and outsourcing. Therefore, to understand the difference and pros & cons of both, read through this article.
Direct information: Whenever the in-house accountant has a problem, he can go directly to the client and ask them for the information that he needs without having to wait for an answer and vice versa too, the client or owner can go ask his accountant if he has doubts about anything.
Niche or unique needs: An in-house accountant will be concentrated on your company’s problems as he will be highly specialized.
Direct access: At any time, you’ll have direct access to your accounts from wherever you are. You won’t have to wait for an answer from another company.
High costs: You need to be aware that if you hire an in-house accountant, you’ll be bringing another full-time employee on payroll which will make it more expensive. You’ll have to pay his salary and maybe even other expenses. If you hire another employee, there will be additional costs such as insurance coverage, paid time off, office space, office equipment, holiday pay etc.
Time consuming: Do you know how much time and work goes into hiring a new employee and the whole recruiting process. Seeing as you want a competent person, you’ll have to post about the job opening and interview new candidates. When you find that new person, you’ll have to bring them into the company and train them on the systems and procedures.
Wasted work hours: Let’s be honest, it is clear that an employee won’t perform optimally throughout the day, there will be water-cooler conversations and that means that you’ll be paying someone and that person won’t be 100% productive.
Low quality of work : It is not a simple job, the accountant needs to be updated on mathematical skills, pay attention to detail and have industry experience. Naturally, an in-house accountant doesn’t have the same experience as an outsourced team, therefore he will face quality issues and maybe even costly mistakes. Those mistakes will be at the cost of the company because they don’t have insurance.
Workload: An in-house accountant will be faced with workload issues. They will either not have enough work to keep themselves occupied or they will have too much work and will be unable to keep up and you’ll be obligated to hire another person to help out which means it will cost you even more.
Outsourced Accounting Team
Price: Comparing to an in-house accountant, this will naturally be less expensive because you won’t have to pay for a salary but you’ll be paying for the service
Industry knowledge and experience: An outsourced accounting team is a team of specialists. They have a big variety of expertise in the accounting industry seeing as they have many years of experience.
Insurance: In case there is ever a mistake with something, accounting firms have insurance that can cover those mistakes, which an in-house accountant doesn’t have and therefore the company itself will pay for the mistakes and it’ll be their own fault.
More services: By choosing a company to do your finances, you’ll have even more services available. Most companies also can provide for services such as tax returns, insurance, coaching, consulting, etc.
Access to systems and tools: An outsourcing accounting team will evidently have systems in place. They clearly know and are familiar with the necessary tools in the accounting world. It will be a good investment because they’ll have the right software and they know how to work with it.
Time: Unfortunately, given that the outsourced accounting team isn’t directly with your company in the building, they’ll always have to wait for the answers of their clients and won’t always be able to move forward with their work. Even getting certain documents, they’ll have to wait for them to send it, and that will take more time.
To conclude, it is evident that there are more benefits and it will be more practical and efficient if you choose an accounting outsourcing company. You’ll need to find the right system to make sure that you are prepared for whatever might come into your company.
But still, it might change according to the needs of your company. Ultimately, it’ll be your choice.
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