All organizations — irrespective of their sizes, need accounting and bookkeeping to manage finances, ensure stability, and comply with legal and regulatory requirements. However, accounting and bookkeeping are time-consuming tasks that require a lot of man-hours.
This naturally creates immense opportunity costs that could be invested in revenue-generating elements of the organization instead. Understandably, organizations often face a dilemma: whether to hire full-time in-house accountants or opt to outsource certain, or all, accounting and bookkeeping activities.
To help business owners decide what’s best for their company, we have conducted an in-depth analysis and enlisted some factors to consider below.
Why opt for Outsourced Accounting Services?
1) The Cost Factor
Hiring a full-time employee is a substantial expense as business owners must pay a fixed monthly salary and benefits like paid holidays, health insurance, sick leaves, and many others. For instance, the median salary for a full-time accountant in the US in 2020 was $73,560.
On the other hand, accounting outsourcing is usually charged a fixed rate based on man-hours, no. of reports, or an all-in-one fee structure. This is especially conducive for SMEs, which may not have the capability and the requirement to justify hiring a full-time CPA.
2) The Training Factor
Hiring a full-time in-house team of accountants is a major investment that requires business owners to spend a lot of time and effort evaluating and choosing candidates who are the best fit for the job. Additionally, the new staff must be trained well to fully adjust to and learn the company’s operations and accounting systems and processes. Often, businesses prefer candidates that have “XYZ” years of experience and require minimal training to do their job.
On the contrary, Finance and accounting outsourcing companies already have the right technologies and human capital in place, eliminating the need to hire and train new talent entirely.
3) The Expertise Factor
While some organizations may have CPAs with the latest certifications and up-to-date knowledge, most often, not everyone within the in-house accounting teams may be updated with the changes in the accounting and taxation rules, regulations, and software.
Accounting outsourcing companies, on the other hand, offer a team of accounting and bookkeeping experts who are well-versed with the latest industry norms and standards, leading to higher quality and greater outcomes.
4) The Time Factor
While an in-house accounting team generally follows a 9-5, 40-hour workweek, efficiency may suffer when there are urgent matters that need to be attended beyond this timeframe. In addition, key members within the team may go on leave, thus pushing back work to a later date.
However, outsourced accounting companies cater to businesses across different time zones and offer extended operating hours and 24/7 services to meet urgent demands.
Why opt for In-House Accounting?
1) The Niche Requirements Factor
For organizations that operate in highly-specialized industries with unique accounting or bookkeeping requirements, finding an outsourced accounting services company that fully understands your needs would be difficult. In such a situation, it could make sense to hire a bookkeeper to manage in-house.
However, as client accounting services become more and more sophisticated, outsourced accounting companies with expertise in specific industries and processes have emerged. These help organizations to not spread themselves too thin by investing in outsourced accounting services.
2) The DIY Factor
Many organizations prefer to keep their financial information confidential. This is understandable, as it provides a greater control over day-to-day finances.
However, it ignores a key factor. As organizations grow the demands on the accounting and finance teams will grow as well. For instance, a 1-person invoice management is simple in case of a few clientele. However, that 1 person can be overwhelmed when having to manage the invoice of multiple projects across multiple states, time zones, and regulatory requirements.
Are you looking for reliable Accounting Services?
Then, Sentient Solutions’ Client Accounting Services (CAS) is the answer!
At Sentient, we provide scalable accounting services (bookkeeping, audit, and tax operations) for businesses of all sizes.
We leverage qualified workforce blending onshore and offshore resources, including Chartered Accountants (CAs), MBAs, and CPAs, to improve accuracy, speed, and transparency in accounting activities.
With 25+ years of experience in the industry, we use accounting technologies powered by AI, machine learning, and robotic process automation (RPA), along with our highly qualified team of accounting experts to ensure 100% accuracy, transparency, and quality.
To know more about the technologies and services at Sentient, please feel free to schedule a personalized consultation with our experts.