It is a known fact that every successful business is a great accountant. That is why a good accountant always feels like a modern superhero; helping businesses with their finances during the day and crunching numbers at night. All professions in the workforce have their roles to play to ensure an organization's success, but it's the accountants who are known as the financial backbone of the organization because of the leverage they offer in the most complicated yet crucial aspects of one’s business operations.
Accountants are experts in managing an organization’s financial accounts, assets, liabilities, and equities. The best part is that they can be found in not just a corporate setting but can also be found in the public sector, the government, and forensics. Every business owner must be diligent in keeping tabs on the company’s financial health whether that’s by constantly updating financial books or maintaining compliance with tax laws. But that could all be very repetitive and not every business owner is keen on taxes and corporate auditing, so it’s best to leave those tasks to the pros.
There are two kinds of accountants you can invite to your roster: full-time accountants and accountants from accounting firms. Full-time accountants are hired by your organization to directly work for you. Meanwhile, when you outsource an accounting firm, you are letting a 3rd party service provider to handle all the accounting function and processes to seasoned accountants, and they act as your finance and accounting team.
Before seeking professional financial services from any of the two accounting professionals, you must know more about their differences, and so we’ve compiled some pros and cons of hiring a full-time accountant vs outsourcing an accounting firm to help you streamline your accounting process.
Cost
Cost is one of the major deal breakers when one is thinking of outsourcing a business function. 70% of businesses also think the same way according to a 2020 Deloitte survey. That's because accounting is one of those important departments that can take a large chunk out of a company's resources.
Hiring in-house accounting staff would require you to not only pay for their salaries but also for overhead costs that come with traditional recruitment such as health benefits and vacation pay. However, when you outsource to an accounting firm, you're only going to pay a monthly retainer fee. They can also offer you a variety of bookkeeping and accounting packages depending on your needs.
Time
If there is anything an accountant values more than a hot cup of coffee, it's their time. Accountants are very busy people, and so are business owners like yourself. You ought to know that just like cost, time is also an important factor to consider whether outsourcing is the right call for you.
In traditional recruitment, you're submitting yourself to the exhaustive end-to-end process of having to fill an open full-time role. An accounting firm, on the other hand, frees up the workload of your team so they can focus their time on other important tasks by executing certain accounting functions on your behalf. Through this, you are able to better dedicate yourself to other core areas of your business.
Internal control
A company’s finances are delicate, which is why the company bank accounts are only usually managed by trusted authorized personnel namely: the company’s accountant, chief officers, and the purchasing manager who handles the company’s purchasing account. When you hire in-house accountants, you’ll feel more secure knowing that you have complete control over financial reporting, as well as tracking how work is performed.
However, there’s always the issue of internal control and security risks when you delegate such a delicate business function to a third service provider. Having an external party handle the company’s finance function poses a great risk the further away home the outsource provider is. To navigate through this, companies must establish a clear framework with their outsourcing partner on how tasks are done to avoid discrepancies and errors.
Work performance
An in-house accounting department will always have merits whatever stage your company is in. Yet a common mistake business owners make is only employing one or two accountants to oversee the whole finance and accounting facets of the company. Making that mistake would often result in unnecessary internal auditing and even worse, deliberate fraud. With only one person controlling the flow of finances, banking, and reporting, it is easier for books to be manipulated and expenses faked.
Now, wouldn’t it be better if you have highly experienced accountants who have years of specialized knowledge at a fraction of the price of in-house accountants? When you partner with an accounting firm, you’d have multiple eyes checking your reports so they’ll be able to notice and fix errors much faster than an in-house accountant.
Productivity
An in-house accounting team may be pulled from their main responsibilities by other departments, impeding progress and productivity. But when you have an accounting firm, they can support your in-house team by reducing workload and helping them focus on the tasks at hand.
Companies would usually outsource to an accounting team to act as financial supervisors, and they may also train or supervise an existing in-house accounting team when they get stumped in complex situations general accountants would find it difficult to navigate. Now, with a promising workforce like that, who wouldn’t want that extra layer of security in your financial process?
Transform your accounting team with UpStaff Remote
Hiring the right kind of accountants can make or break your company. It all boils down to the state of the current financial health of your company and the needs of your workforce. Financial missteps can lead your company into a tight spot, but it doesn’t have to be too complicated, especially when there’s UpStaff Remote to point you in the right direction.
UpStaff is your trusted partner in offshore accounting. We have a wide array of seasoned accounting experts based in the Philippines to help you with all your accounting and offshore needs. Having problems with finding the right accountants? Leave us an email at info@upstaffremote.com with details on how we can further assist you and your business.