In-house vs Outsourced Accountants - Pros and Cons
Having an accountant, be it in-house or outsourced, is no easy task. It can either make or break your business. Hence, it is imperative you consider all your options before deciding on which route to take.
Undecided between the two? Here are pros and cons of each type of accountant for you to consider if you wish to make accounting a breeze for your business.
Pro #1: Proximity
With an in-house accountant, you have all the tools of the trade at your doorstep to provide your employee with. Having an accountant just a literal step away from you is what you need to ensure your business’ financial transactions are entirely in safe hands.
Pro #2: Loyalty
One of the most overlooked factors in the business world, having your own in-house accountant brings to your business an overlooked value - loyalty. With your own in-house accountant, you can always feel safe and secure knowing that sensitive information about your business will always stay within the vicinity of your own four walls.
Pro #3: Familiarity
Having an accountant in the house means you have someone who is extremely familiar with all your business practices and understands how your business works. This sense of familiarity can give you a peace of mind working with an accounting professional who understands your business well.
Con #1: Time-consuming
Setting up ground rules for your business can be time-consuming. Supposing the accountant on your team is fresh out of school, you can expect constant revisions in the first years of operation. And without experience, chances are revisions will not only be improvements, but also more time required for new hires to learn the ropes of your business from time to time.
Con #2: Hiring Difficulties
Finding the right candidate for your business’ accounting role is tough. It costs money and time, let alone stability if the candidate you hired may not prove suitable in the long term. Keep in mind it’s not about hiring the right candidate, but the best candidate for the job with plenty of experience.
Con #3: More Costly
Hiring someone means you'll have to sign the checks and pay the bills for everything (i.e. salary, benefits, office space, accounting software, etc.). Outsourcing, on the other hand, allows you to pay a monthly fee instead and frees you from this additional weight of financial burden from your shoulders.
Pro #1: Pro-Active Approach
Outsourcing allows you to easily detect any red flags in your business ahead of time, while keeping you in the loop of all your financial transactions. Having trained eyes on your finances 24/7 can bring peace of mind, as well as provide the impetus to make intelligent financial decisions.
Pro #2: Cost-effectiveness
By hiring an outsourced accountant or accounting service, you wouldn’t have to worry about any overhead costs that hiring an employee would generate (e.g. health insurance, retirement, vacation leave, medical leave etc.). Also, the value of having an entire team’s expertise, rather than just one internal person (or more), includes reducing the risk of non-compliance and unreliable financials – especially for smaller businesses starting out.
Pro #3: Reduced Fraud
According to a 2018 report on fraud called Report to the Nations, 22 to 28% of businesses have experienced employee fraud. Having an outsourced accountant who is looking at all your financial accounts assists in scanning all potential issues in the early stages of your business.
Con #1: Hidden Costs
Having an outsourced accountant could incur additional costs to your business that you might overlook. Be it additional charges, salaries, compensations, medical leave etc.; these are some of the many financial burdens you can avoid in hiring an outsourced accountant.
Con #2: Less Control
Passing all your financial matters over to an accounting professional outside your business means you have less control over how your financial transactions are being managed. So it is crucial to set some house rules for your outsourced accountant to follow to ensure SOPs are being followed.
Con #3: Miscommunication
Due to outsourced accountants often being on the move and tending to other businesses’ financial needs, there can be breakdowns in communication when it comes to the different businesses that the outsourced accountant is handling. Hence, it is imperative that the outsourced accountant focuses on the tasks at hand to ensure your financial transactions run smoothly in the long term.
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