Hiring In-house VS Outsourced Accounting and Finance Team
Bookkeeping and accounting are essential for every business, and there are many opinions on the right ways to find the services that are needed. If you are starting a business or you can see that your bookkeeping and accounting systems need a bit of TLC, what is the right approach? You can hire an in-house bookkeeper or accountant, or you might consider the benefits of choosing an outsourced accounting team.
The pros and cons of each option vary, especially based on the person or team that you choose to hire. Today, we are sharing a bit of information about hiring an in-house employee vs. an outsourced accounting team so you can the best way to meet the needs of your company.
Common Problems with In-House Employees:
There are potential benefits that come with having a bookkeeper or accountant in-house. Many business owners choose this approach because they want to feel like they have control over the way the books are being run. While it is important for you to know what is happening in your business finances, one of the best things that you can do is hand the financial responsibilities over to an industry expert.
While benefits can be enjoyed if you hire an in-house bookkeeping or accounting team, you will also face serious issues that can arise. Here are some of the most common problems faced by businesses who choose in-house accounting and bookkeeping:
Look at the numbers, and you will see that it’s far more expensive to bring another full-time employee onto payroll. Not only do you need to pay for the person’s salary, but other overhead expenses should be considered as well. The fully-burdened cost of another employee includes insurance coverage, paid time off, office space, computer and office equipment, ongoing training, holiday pay, and more. When you compare these costs with the price of hiring an outsourced accounting team, you’ll find that it is much more affordable to choose outsourcing.
Hiring, Onboarding, and Training:
How much time and effort goes into the recruiting process when it’s time to hire a new employee? It can be a burden to go through the process of posting the job opening, interviewing candidates, bringing them into the company, and then training the person on systems and procedures. On the other hand, an outsourced team of accountants already has proven systems in place. When you choose these services, your business doesn’t need to worry about onboarding or ongoing training.
Wasted Work Hours:
The hope of every business owner is that employees will perform optimally throughout the day. But the truth is that water-cooler conversations are bound to happen, which means that you are paying someone even when they are on the clock and not choosing to be productive. On the other hand, outsourced accountants only charge for the billable time spent on your business, so you don’t need to worry about unnecessary costs for wasted time.
Low Quality of Work:
Accounting and bookkeeping aren’t simple tasks. The person needs to stay fresh with mathematical skills, attention to detail, and industry experience. A single in-house bookkeeper or accountant doesn’t have the vast amount of experience that comes from an outsourced accounting team. As a result, you could be facing quality issues and even costly mistakes, which often slip by unnoticed in the office. Outsourcing means that you have services from a team of experts with knowledge about accounting in a variety of situations.
Right Workload for an Employee:
In-house accountants or bookkeepers often face workload issues. Either there isn’t enough work to keep the person busy, which means that a lot of paid hours go to waste throughout the week. Or, the business is growing so quickly that the person is unable to keep up… and the only solution is to hire another employee. You need to be sure that your accounting services can adjust to the needs of your company, which is why it can be beneficial to hire an outsourced accounting team that can adjust as your business grows in the future.
As you can see, the time and money investment of hiring an in-house accountant can be a burden on your business. If you want to save money and optimize the quality of financial services you are receiving, then hiring an outsourced accounting team might be the right solution for your business.
Additional Benefits from an Outsourced Accounting Team:
A few points were mentioned above to show how outsourcing can be a solution to solve common problems that occur with an in-house employee. The benefits of outsourcing go beyond the information already listed in this article. Here are some of the other benefits you can expect if you choose to invest in an outsourced accounting team:
Pay for What You Need:
Instead of committing to the cost of a full-time salary, outsourced accounting allows you to pay for what you need. For example, you might choose a monthly service plan that includes bookkeeping, payroll processing, and more. Then, if you need additional accounting services outside of the standard offerings, you can pay for what is needed. When you outsource, you know exactly what you are paying for, and there is no reason to overpay for time or services that aren’t required each month.
Access to Systems and Tools:
Also, consider the value that comes from working with an experienced accounting team that already has proven systems in place. You can have confidence knowing that your accounting team is familiar with the top tools in the financial industry. These software programs can be a great investment to streamline your bookkeeping, reporting, and tax preparation. Pairing good software with quality accounting services is the most effective way to streamline and organize your business.
Industry Knowledge and Expertise:
When you are working with an outsourced accounting team, you have a team of specialists who have a wide variety of expertise in the industry. The many years of experience exceeds the expertise you can get from a single employee. Also, consider the cost and time required to gain these specialty skills. It can be a huge burden to train in-house staff to develop the financial skills that you need and want.
Option to Scale in the Future:
You can have confidence knowing that your accounting system can be scaled as your company grows over time. An in-house employee only has so many hours in the day, which means that you will eventually reach the limits of what that person can offer. If you anticipate that your company will continue to grow, then it can be valuable to have a full team of accountants who can help with your business efforts.
No Down Time:
When an in-house accountant is sick or leaves on vacation, it means that you no longer have the support of a financial expert for your business needs. On the other hand, you don’t have to worry about downtime when you are working with an outsourced accounting team. If one person is away from the computer for personal reasons, then there are always other team members who can assist with your financial reports and accounts.
Team effort is essential if you want to minimize the risk of fraud and theft. Leaving one person in your company to oversee all of the financial details means that you could be exposed to undetected theft. The best way to avoid fraud and the chance of someone stealing money is to have multiple people overseeing the project, with proactive checks and balances in place to identify red flags. An accounting team uses accountability and built-in security with account reconciliation. Having multiple people looking at the financial accounts means that issues will be identified in the early stages, so you can fix the problem and mitigate risk.
Bookkeeping and Accounting are Essential for Your Business:
In the day-to-day workflow, it often feels like bookkeeping and accounting are burdensome for your business. The truth is that these financial services shouldn’t be a nuisance. Quality, accurate, organized financial systems are key if you want to enjoy business growth and success in the future.
You need to find the right system to ensure that you are prepared for whatever may come into your business. A strong outsourced accounting team can be an invaluable resource so that you have a good financial foundation for your company. Most business owners don’t have formal accounting or bookkeeping training, which is why it makes sense to hire the experts.
If you are considering the benefit of outsourced accounting for your small business, then Finance Ality just a phone call away. We provide full-service accounting that can be catered to the unique requirements of your business. You don’t have to carry the responsibility of financial tracking without the support of an experienced team. Call us to learn more about the ways your business will benefit from our services: 1-866-996-2529.