In-house Vs Outsourced Accountants - Choose the Best Choice
IN-HOUSE VS OUTSOURCED ACCOUNTANTS - CHOOSE THE BEST CHOICE
Bookkeeping and accounting are critical roles for any company, whether it is a start-up, a small business, or a Chartered Accountant firm. If your books of accounts and financial documents are right, you will be able to make fast decisions for the growth of your company. There are two routes that you can take to get there.
Now, company owners have two options for keeping their books in order: either employ an in-house accountant or outsource accounting services. Every company is different, but there are a few roles that are the same in all of them, with accounting being the most important. Previously, most companies used the conventional in-house solution, but because of the added advantages associated with outsourcing, it is quickly becoming the preferred option.
Before you even think of the outsourcing or in-house alternative, find out how much accounting work you have. If you are just starting or running a small company, the accounting need would probably be less. So, it all boils down to the size of the business and the volume of accounting work it produces.
COMPARISON FACTORS - IN-HOUSE VS OUTSOURCING ACCOUNTANTS
- BUDGETARY DATA SECURITY
The most pressing issue for business owners is the protection of their financial records, both debits, and credits. In most businesses, the people who handle the books are also the ones who reconcile. As a result, they have several opportunities to make illegal adjustments that are difficult to detect by owners.
Outsourcing organizations adhere to a strict workflow in which each phase of the accounting process is completed in front of everyone and then cross-checked on an open platform using the most up-to-date cloud-based accounting software. Accounting and bookkeeping software like this also adds a layer of protection against cyber-attacks.
- PROMPT FINANCIAL REPORTING
Depending on the number of monthly transactions, market specifications, regulatory enforcement, and other factors, the financial reporting process varies from business to company. To prepare reliable financial reports, accountants must devote their full attention to financial data during the month. The issue with in-house accountants is that they still have other duties, such as scheduling time for human resources.
Furthermore, as a company grows, the importance of tracking invoices, bill payments, and data entry takes precedence over financial statements. You can be assured of timely financial statements when you outsource because you will have a team that is solely focused on this and will not be involved in any of the other business activities.
- THE PRICE FACTOR
When it comes to deciding between in-house and outsourced accounting, the expense is the most important consideration for many small and medium-sized businesses. A full-time in-house accountant and bookkeeper should expect to earn about $50,000 and $45,000 per year, respectively. Aside from that, the following overhead costs make it even more expensive:
- Taxes on Wages
- Holidays/Sick Days
- Plans for Retirement
- Placement of advertisements, scheduling of interviews, testing, and new hire training
Outsourcing accounting services, on the other hand, does not require you to be concerned about overhead costs. Furthermore, the total annual cost of outsourcing accounting and bookkeeping services is around $60,000 ($5,000 per month), which is significantly less than the combined cost of an in-house bookkeeper and accountant, which is around $107,000. Apart from that, outsourcing saves business owners money by allowing them to exploit computerized accounting technology by collaboration rather than investing in the most up-to-date computerized accounting, accounting software and infrastructure.
- ADVANCED ACCOUNTING
Accounting experts with years of experience and unmatched expertise have been acquired over time by the leading outsourcing players. When it comes to in-house accountants, there is something that is lacking. Furthermore, since outsourcing accountants work in a variety of sectors, their knowledge base is very extensive. They will assist business owners in advanced accounting by overcoming any financial constraints by guiding them through deep financial data insights for successful decision-making.
- WORKLOAD HURDLES
Workload problems are common among in-house accountants. There seems to be little work during the slow season, which ensures that many paid hours are wasted during the week.
As a result, you'll need an accounting firm that can adapt to your company's needs, which is why it's critical and advantageous to hire an outsourced accounting staff that can keep up as your company expands in the future.
- QUALITY OF WORK
Accounting and bookkeeping are complicated processes to fulfill. The in-house accountant must keep up with new skills, evolving UK accounting and taxation norms, HMRC rules and regulations, and new technologies, among other things. A couple of in-house accountants won’t be able to handle all these and so you might end up facing quality problems or even expensive errors, which would be harmful to your company.
- NEW RESOURCE HIRING AND TRAINING
Recruiting a new employee takes a lot of time and effort. Posting a new job opening, interviewing applicants, recruiting them, and then training them on processes and procedures is a drain on a company's resources. When you hire an outsourced team of accountants, on the other hand, you won't have to think about recruiting or training. Manpower and technologies that have been proven to work are already in operation.
- ELIMINATE FRAUDSTERS
It can come as a surprise to learn that in-house accountants are more likely to commit deception. The basic explanation is that they have access to a lot of inside information and could be tempted to falsify records or embezzle funds. Such sensitive information would not be accessible to an outsourced accounting company.
Segregation of duties is one solution, but it's impossible when you only have one or a small team of in-house staff. As a result, consulting an outsourced firm with proactive checks and balances is the best option. Furthermore, since their credibility in the industry is on the line, an outsourced accounting company will never engage in any unethical behavior.
When you use the skills, knowledge, and experience of accounting experts at your outsourcing partner's business, you can gain several significant advantages. They will take care of your accounting and finance in a fair and well-organized manner, reducing your tax burden and providing accounting services with a personal touch, assisting you in running your business activities profitably and smoothly.
PROFESSIONAL FIRM HIRING FOR LARGER PROFITS
The first step to business success is to recognize your strengths. If you want to increase your earnings as a company owner, you must consider both the accounting and business aspects. Both of these facets of the company need equal consideration. You can employ an accounting firm if you don't have the money to ensure reliable and timely financial results.
A specialist accounting company has an experienced staff that keeps itself constantly briefed on the latest trends in the field of accounting. Your accounts will be kept up to date, and you will receive professional financial reports if and when you need them. Your profits will soar if you can keep a close eye on your expenditures and distribute resources efficiently.
Both in-house and outsourced accountants have advantages and disadvantages. The experts in the field have clearly stated what you should expect from an option. It all comes down to the accounting needs and budget, which is why many company owners favor outsourcing.
Consider partnering with Calman Analytics if you're looking for a reputable and reliable outsourcing partner. To ensure the security of your financial records, we use the best accounting practices, the most up-to-date technologies, and the most stringent security controls. Contact us to start your free trial!