While every business operation is specialized and requires an exclusive workforce managing it, accounting is a tad different. As it deals with money, businesses should have a proper vision and strategy in place to manage it accurately and effectively.
Strategy refers to the decision of whether to outsource accounting or keep it in-house. To many, it might seem a trivial concern. So, calling it a strategy might surprise them. But closely looking at both would help understand how vital it is to make the right decision. So, let’s see outsourcing vs. in-house accounting and what’s right for your business.
Outsourcing Vs. In-House Accounting – What to Choose?
While the ultimate goal is to maintain sound financial health, ensure compliance and build pecuniary sustainability, the strategy you choose matters. So, let’s look at a few differences between outsourced accounting and in-house accounting. Towards the end, these differences can help you achieve more clarity and make an informed decision.
|Outsourced accounting involves hiring external resources through an accounting outsourcing company. Based on your needs, the outsourcing company can provide resources with varying expertise levels and experience. It can help you create and maintain the right blend of freshers, mid-level and experienced accounting professionals in your team.
|In-house accounting can also help you have extensive expertise by your side. However, hiring each can involve a significant effort, money and time. The most experienced resources will demand a higher salary, which in some cases, might be beyond your financial reach.
|While outsourcing your accounting, you save a lot of costs associated with hiring, training, infrastructure and employee administration. The onus of each of these tasks remains with the outsourcing company. Although the savings vary with the company, resources hired and the business volume, usually, companies can save about 35-55 percent by outsourcing accounting.
|In-house accounting involves spending on everything from searching for hiring agencies to managing employee salaries and employee administration costs.
|Scaling up your team is much more straightforward and quicker with an outsourced team. All you have to do is put forth your requirement and onboard resources. That’s because accounting outsourcing companies have access to extensive and diverse talent pools from which they handpick resources. Similarly, you can scale down your team as and when you need, without the embarrassments of layoffs.
|With in-house accounting, scalability could be a challenge. While scaling up would involve efforts and costs in new hiring, scaling down could put in awkward situations like terminating employment!
|There’s a myth, with outsourced accounting, you might lose control of your accounting operations. But that’s not necessarily the case. Partnering with experienced and reliable outsourced accounting companies can help you stay in control, while ensuring the highest possible levels of efficiency.
|In-house accounting lets you be in control of your accounting operations. However, relying excessively on employees might cause a shift of authority concerning process changes, decision-making, etc., in the hands of the employees handling it.
|With outsourced accounting, you can enjoy dedicated services of the team you hire. That can help increase accounting efficiency, accuracy, and ensure compliance.
|With in-house accounting, although you’d have a dedicated team at your disposal, the employees will simultaneously have many other aspects like strategy, financial management, etc. to manage. Managing all of them could prove challenging and affect efficiency.
|With outsourced accounting, you can run your accounting operations 24/7. It proves useful especially for companies with operations in multiple geographies spread across various time zones.
|In-house accounting usually begins at 9 AM and ends at 5 PM in the evening. You may not have anyone to address a particular need beyond the office hours.
So, outsourced accounting vs. in-house accounting – what to choose? The more strategically beneficial choice is to outsource. It helps save costs, is easier to scale, and lets you focus on your core business. We hope this blog helps you make the right choice.