Accounting is essential for every business, and there are many opinions on the right ways to find the services needed to stay afloat. If you’re just starting up or can see that your accounting systems need maintaining, what is the right approach? You can recruit an in-house accountant or consider hiring an outsourced specialist.
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.
The In-House approach
There are potential benefits that come with having a bookkeeper or accountant in-house. Business owners choose this approach because they want to feel like they have control over the way the staff member works. It’s important for business owners to know what’s happening in their business, especially when it comes to the finance side of operations. One of the best things that you can do is hand the financial responsibilities over to an industry expert.
While benefits can come from an in-house finance team, you could also face serious issues. Here are some of the most common problems faced by businesses who choose in-house finance recruitment:
- High Costs: 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 staff member’s salary, but other overhead expenses should also be considered. The fully-burdened cost of another employee includes insurance coverage, holiday pay, office space, computer, ongoing training, and more. When you compare these costs with the price of hiring an outsourced specialist team, you’ll find that it is much more cost-effective to choose outsourcing.
- Recruitment Process: 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 finance specialists already has proven systems in place. When you choose these services, your business doesn’t need to worry about on-boarding or ongoing training.
- Wasted Work Time: Every business owner hopes 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 finance managers only charge for the time spent on your business, so you don’t need to worry about unnecessary costs for wasted work time.
- Low Quality of Work: Accounting and bookkeeping aren’t simple tasks. The person needs to stay on top of the accounts, maintain high attention to detail, and have high-level 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 costly mistakes, which often slip by unnoticed. Outsourcing means that you have services from a team of experts with knowledge about accounting in a variety of situations and sectors.
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 optimise the quality of financial services you are receiving, then hiring an outsourced accounting team might be the right solution for your business.
Benefits of Outsourcing
As mentioned above, 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 finance team:
- Pay for What You Use: 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 cashflow management, bookkeeping, payroll processing, and more. Then, if you need additional accounting services outside of the standard offerings, you can pay for what is needed. This outsourcing approach will save you thousands every year. When you outsource, you know exactly what you’re paying for, and there is no reason to overpay for time or services that aren’t required each month.
- Access to Systems and Tools: Consider the value that comes from working with an experienced finance 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 your company’s financial management.
- 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, 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 require.
- Option to Scale: You can have confidence knowing that your financial management 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 would be valuable to have a full team of outsourced finance professionals who can aid in your business’ growth.
- Less Risk of Down Time: When an in-house finance staff member is sick or on holiday, it means that you no longer have the support of a financial expert for your business requirements. However, you don’t have to worry about down time when you’re working with an outsourced finance 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.
Financial Management is Essential for Your Business
In the day-to-day workflow, it often feels like bookkeepers and accountants are a burden for your business. The truth is that these finance experts shouldn’t be a nuisance. High quality and well organised financial systems are key if you want to enjoy strong business growth and success in the future.
You need the right system to ensure that you are prepared for whatever may come into your business. A strong outsourced finance team can be an invaluable resource, ensuring a solid 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 right accredited expertise.
Business owners can get the bespoke support they need in outsourcing their finance & accounting services from EFM. Our nationwide team of experienced and multi-sector finance professionals range from high level Finance Directors & Financial Controllers, to lower level support functions, such as Bookkeepers, Credit Controllers & Payroll Managers.
To find out more around how EFMs tailored financial management services can benefit your company, get in touch with the central team. Contact us via email@example.com or call 01582 516300 to set up your free one-hour consultation.