Outsourcing vs In-house accounting – Figuring out what’s best for your business.

So you're considering whether to hire an in-house accountant or to outsource your services to a local or online accounting firm.

There are so many different benefits when it comes to hiring an accounting professional. Congrats on taking that first step and looking into your options. See the benefits here.

For many new & smaller businesses, they'll start with an outsourced firm to help guide through process setup and growth and then once it makes sense, move to an in-house accounting team.

This can be a tough decision to make for small businesses so let me help break it down:

Hiring an Internal Bookkeeper

Here's a quick breakdown of the pros and cons of hiring someone internally to complete your monthly accounting>

Pros of hiring an internal accountant or bookkeeper:

• You can monitor this person directly & there's more control over what they do
• Typically better communication & the possibility of physical presence
• Ability to hire based on a fit with your company's culture.
• In house can faster respond to urgent requests

Cons of hiring an internal accountant or bookkeeper:

• Higher costs due to salary, hiring, training, and employee benefits/taxes
• Less flexibility if this person goes on PTO/Is sick, or if they quit
• A higher risk of fraud than with an outsourced accountant.
• Limitations to the knowledge and skills of one person.

Hiring an Outsourced Accounting Firm

You've seen the benefits of hiring in-house so let's compare those to outsourcing your financial processes.

Pros of outsourcing your accounting:

• Typically a fixed fee on a monthly basis without hidden overhead costs, taxes, etc.
• Able to provide multiple levels of services. From bookkeeping to payroll to CFO services. You're covered.
• Timely & accurate financial data when you need it
• A team of knowledge & experience.
• An obligation to stay up-to-date on technology, industry standards, and accounting knowledge
• Ability to increase services as your business grows easily

Cons of outsourcing your accounting:

• Communication may not fit your needs perfectly at first
• The fees might seem high at first until you witness the value provided consistently.

Both in-house accountants & outsourced accountants have advantages and disadvantages. It comes down to your company's needs and your budget. This is why so many companies favor outsourcing early on.

Lastly, If you already have portions of your monthly/quarterly accounting needs covered. You could also consider hiring an outsourced firm to fill in the blanks. For example, if you have a bookkeeper, you could outsource a controller for more high level financial management.

Some tell-tale signs you should look into hiring an outsourced accounting firm

• You are a new company and you want processes setup correctly from the beginning
• Your accounting is taking up a lot of your time & giving you headaches
• You are unsure of the accuracy of your financial information & want to ensure things are being done correctly
• Your company is growing quickly and you want increased financial management
• You are looking for services that in-house bookkeeper is unable to provide.
• You have high financial reporting expectations but do not want to spend as much money

Bringing on some assistance with an external accounting team can be very helpful to businesses, no matter the industry you're in.

Looking into hiring an outsourced accounting team or have more questions? Get in contact here