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In-house and outsourced accounting services – what’s best for your business?

Project Alfred
July 7, 2021

It’s so common for businesses to stick to something because it’s the way things have always been done. “If it ain’t broke, don’t fix it”. But what if there was a better way?

Traditional doesn’t always mean better and this is certainly the case for accounting and bookkeeping. With improvements in technology and changes to the way we do business, it’s now much easier to outsource your accounting. 

But why would you want to do that?

The difference between in-house and outsourced accounting 

Outsourcing your finances gives you options that you just don’t get with in-house accounting. But don’t worry, we’re not here to convince you to drop everything and come with us, though! 

We’ll be the first to say that outsourcing isn’t right for everyone and it definitely depends on your individual situation. But we also believe when it’s done right, outsourcing your accounting often costs less and provides more financial expertise than you typically get in-house. 

There are key differences in training, quality control, financial reporting and cost that could all influence your decision as well. That’s why we’ve decided to outline what in-house and outsourced accounting can offer you. We want to give you all the info you need so you can choose the best option for your circumstances. 

Hiring and training

It doesn’t matter if your accounting and bookkeeping is in-house or outsourced all that matters is that they know what they're doing. But when it comes to hiring the best accountant for your needs, there are quite a few differences depending on what avenue you choose to go down. 

If you choose to go in-house...

If you’re hiring a bookkeeper to manage your money in-house, you’ll want someone with a few years’ experience, someone on the same page as you and (ideally) someone who knows your industry.

This is hard to gauge if you’re going through interviewees like singles on a speed-date table. On top of all this, even with a decent amount of experience, you’ll still need to make time to onboard your accountant.

If you choose to outsource...

If you outsource your accounting and bookkeeping, you don’t need to deal with the issue of going through tonnes of applicants (especially if you don’t end up finding a good fit at the end of it all!). 

With an outsourced accountant you’re almost guaranteed to be dealing with a qualified expert who already has a range of practical knowledge and experiences. While there’ll still be some time spent onboarding, the process is much more streamlined, especially as they’ll bring their own processes and experience to the table.

Four people sitting in chairs holding resumes as they prepare for a job interview.
When hiring an accountant you will need to go through a long recruitment process. While you still need to do research if you choose to outsource your accounting and bookkeeping, you're more likely to find a qualified expert in a shorter timeframe.
Quality control

Whether you go for in-house financial support or outsource, you’ll need some sort of checks and balances to prevent things turning south. 

If you choose to go in-house...

Most businesses only have a small finance team made up of one or two bookkeepers or finance managers (not enough if you ask us!). Having such a small number of people responsible for your business’ finances means there’s a greater risk of honest mistakes but also intentional fraud. 

If you choose to outsource...

While you might think an outsourced accounting firm wouldn’t care about your business, that couldn’t be further from the truth. An accounting firm’s entire reputation relies on them doing a good job of your finances. The only way to be successful and recommended to others is to make sure books are managed well and everything adds up. 

Financial reporting

All those facts and figures on your financial reports might make you feel like your brain’s about to explode, but understanding your financial position shouldn’t cause headaches. Knowing where your business stands when it comes to cash flow and growth should actually excite you because it allows you to make confident business decisions (we aren’t just saying this because we love numbers either, promise!). 

Using an in-house team compared to an external one can actually influence whether you’re picking the right things to look at and review.

If you choose to go in-house...

While an in-house finance team can keep track of expenses, finances and investments, they can also find themselves getting caught up in other responsibilities. For example, HR might pull them away from numbers and have them focus on everyday tasks like data and clearing bills.

Don’t get us wrong, those things are still important, but time has to be put into financial reporting. The last thing you’d want is incorrect figures or something important being missed (ahem the Australian treasurer’s team miscalculating a measly $60 billion with JobKeeper estimations last year). 

If you choose to outsource...

Outsourcing your accounting means you’ll have accurate financial reports (the stakes are high for us because it’s our name on the line). We can also help you with important responsibilities outside of straight financial reporting that can provide other benefits to your business. 

For example, when it comes to in-house bookkeeping, you have to provide resources for support and also focus on retaining your accountants. We don’t want to sound like heartless number crunchers, but outsourcing your accounts and bookkeeping can actually be a win-win as we can help you review the performance of your current employees and provide them with greater support, supervision and guidance. 

Cost

As much as we might try to tip-toe around it, the cost of doing business is an important factor when it comes to choosing the right accounting and bookkeeping options for your business. 

If you choose to go in-house...

When you hire an accountant or a bookkeeper, you’ll need to hire a new employee. This salary will go up depending on qualifications and you’ll also need to pay for services and employee benefits. This includes paid time off, the cost of interviewing, hiring and training, as well as superannuation. 

If you choose to outsource...

When you outsource your accounting you still pay for services but overhead costs are left out of the equation. Costs usually start low but go up based on the complexity of the tasks. It can often be cheaper for a small business to outsource rather than hire an accountant. 

We’re always open and honest about our pricing – and you can use our pricing calculator to see for yourself whether our prices are fair for what you need.

A calculator and pen are used to calculate budgets and determine cashflow forecasts.
There are a range of differences between in-house and outsourced accounting, however you've got to choose what's best for your business. This might even be a combination of both.

To in-house or to outsource, that’s the question...or is it?

After reading all this, you might be asking yourself what to do next. The best part of outsourcing your accounting is that you don’t have to upend your existing team. This isn’t the Hunger Games – you don’t have to get rid of your in-house team! In fact, we’d love to work with – not against – your existing finance team. 

Choosing to outsource all, or parts, of your accounting and bookkeeping gives you access to expertise you might not be able to afford to have in-house. You also have peace of mind that you’re working with finance experts you can trust, and often at a lower cost. 

We care about your business as much as we do our own and we’d love to work with you no matter what your needs are.

Looking for someone to help steer your business finances in the right direction? Book a discovery call with us today to learn how we can work and grow together.

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