For many businesses, a question they will face at some point as their business grows and becomes more complex is whether to keep their accountancy in-house or to outsource to an external accountant.
On one hand, an in-house accountant is likely to cost more but allows for better communication and quicker answers. On the other hand, outsourcing your accountancy gives you access to a team of experts and knowledge that an in-house accountant may not possess, but it may slow down communications.
With so many different factors to consider, let’s take a look at the main benefits and pitfalls of both outsourced and in-house accountancy.
Benefits Of Outsourcing Your Accountancy
When outsourcing to an accountancy, there are many benefits gained by the business owner:
Expertise & Advice – One of the main benefits of outsourcing is the expertise you receive, outsourcing gives you access to a team of experts, their industry knowledge and their accountancy and taxation tools.
In addition to their expertise, your accountant should be able to provide you with professional business advice, allowing you to take all the relevant costs and considerations into account before making a business decision.
Time & Cost Savings – With all the weekly hours business owners put in when managing their accounts in-house, the savings of outsourcing to an accountancy do stack up, especially when coupled with the financial costs of hiring or training somebody in-house.
Reduce Chance Of Mistakes – Accounts that are repeatedly inaccurate, late or wrong will not only draw fines but can initiate a tax inspection from HMRC. Using an accountant significantly reduces the risk of mistakes being made.
Potential Pitfalls Of Outsourcing Your Accountancy
However, business owners should be cautious of the potential pitfalls of outsourcing to an accountancy, generally caused by using an accountant that isn’t suitably accredited or has a poor reputation.
Less Control – In some cases when outsourcing accountancy, business owners may find accountancy firms are unreliable or unresponsive for long periods of time, if this is the case – you should start looking for a new accountant.
Security Risks – Your business’s financial information is sensitive to you, and the databases accountancies hold can be valuable to hackers. To prevent this happening, do your research before choosing an accountant to ensure yours is trustworthy and uses secure accounting systems.
Benefits Of Keeping Your Accountancy In House
More Control – Keeping your accounts in-house gives you more overall control over your accounting, whether it’s faster responses to questions or speedier completion of tasks. Additionally, when your accountancy is done in-house you are able to assign your employee more tasks should it get busy, whereas an outsourced service might charge you more for this.
Multitasking – Unfortunately, you can’t ask an outsourced accountant to make you a coffee. Having an in-house accountant brings all the benefits of having another person in your office, whether it’s to help other members of staff with tasks, train other employees to use the accounting software, or answer the phones.
Potential Pitfalls Of Keeping Your Accountancy Inhouse
Cost – As well as their salary cost, hiring or training an accountant in-house will require you to pay out the usual added employee costs including employers National Insurance, paid holiday and sick pay, bonuses etc, you will need to consider your office space requirements, your in-house software and investment in additional technology.
Staff retention – For small businesses, the cost of training an in-house accountant from scratch is a substantial one. If an accountant leaves for any reason once trained, it can be devastating for the business to have to incur that cost again, hiring an experienced accountant in-house requires a large investment of staff time and money.
Can’t I Just Do The Accounts Myself?
When you first start your business up, accounting for yourself can be a quick and cost effective alternative. However, as your business grows, accounting requirements become increasingly more time intensive, and you may find yourself getting nothing else done.
In addition to this, without the appropriate level of qualification and knowledge of accounts that an accountant possesses, you may find yourself making mistakes in your accounts that cost your business more than just your time.
Need A Hand?
As you can see, there are a number of factors for businesses to consider when deciding whether to keep your business accounting in-house or outsource to a specialist accountant. Whatever your requirements, we can help, whether it’s fully managed accounting services or simply working with your in-house team to ensure compliance.
Give us a call on 0117 3790810 today to arrange a free consultation and see how we can help your business flourish.
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This post was written by Steph Roffey