Accounting books of any business are seldom discussed in public. Unless it is a public listing, where you are compelled to disclose your numbers to your stockholders, the accounting books are very much an internal matter for most small to medium businesses. For this simple reason, the success of any business is hardly ever attributed to their well-maintained accounting books. But the truth of the matter is that those well-maintained accounting books are a crucial part of the success of the technology they use, the workforce they employ, or the service/product they offer. Not many consider bookkeeping and accounting a substantial contributing factor towards the success of the business, small or large.
Well-maintained accounting books not only allow you to set budgets for business growth, help with future predictions in terms of business plans, but also keep you on the right side of the law by complying with the statutory regulations. For this reason, CFOs and business owners have put bookkeeping and accounting atop their priority list when it comes to investing in new technologies, resources, and disruptions to boost business productivity. The recent technological developments in the accounting space attest that managing a company’s accounting books is as vital a task as any other aspect of the business.
Therefore, there are compelling arguments both in favor and against in-house vs. outsourced bookkeeping and accounting services. The statements go way beyond the standard topics of time zone difference, price tag, and so on. So, we thought it is only fair to have a closer look at both, understand the arguments, and maybe help some of you get over the conundrum of choosing between in-house and outsourced Bookkeeping and Accounting services.
In-house bookkeeping & accounting – the good & the bad
The Good –
Having an in-house bookkeeping function has certain advantages. We offer our bookkeeping and accounting services to many businesses to understand why some prefer in-house over outsourced services. The most frequent argument in favor of in-house bookkeeping is to have control over their books. Some even suggest that the in-house bookkeeping function understands the nitty-gritty of the business’s finances, which makes them the suitable option to hand over the financial responsibilities.
The Bad –
While we do not deny the obvious benefits that an in-house bookkeeping function brings with it, we feel it is essential to highlight some of the issues they get. Here are some of the problems that you might run into when going for an in-house bookkeeping service:
- High cost – Having a full-time accounting team on company payroll is an expensive maneuver; do not let anyone tell you otherwise. You must pay for an individual’s salary and everything else like insurance, time off, space, office equipment, and so on. When compared with hiring an outsourced accounting team, all those costs make outsourcing a lot more affordable option.
- Educating, onboarding, & hiring – The pain of having an in-house bookkeeping and accounting team begins even before you have them on board. You need to invest heavily in the scouting of suitable talent, their training, and educating them on your business finances. All of those hassles are taken care of by your bookkeeping outsourcing partner, should you get one for your business.
- Quality of work – In no way should it be construed that the in-house bookkeeping and accounting team’s employees compromise on the quality of their work. It’s just that bookkeeping, and accounting are complex tasks and need incredible mathematical skills and a vast amount of industry experience to operate at optimal efficiency at all times. If you have a small accounting team, that is just almost impossible. However, an outsourcing partner has teams to address all those issues at once.
Outsourced bookkeeping & accounting services & its perks
The perks of having a bookkeeping and accounting partner could vary depending upon the nature of the business you are into. However, there are some industry/business agnostic benefits that most firms with bookkeeping and accounting outsourcing partners in general reap. Here are a few of those benefits observed from the CPAs & business owners’ perspective while delivering bookkeeping and accounting outsourcing services to them.
- Advanced accounting systems & tools – Modern accounting professionals work on highly advanced systems and tools. From Artificial Intelligence to Machine Learning and Cloud, the modern accounting professionals need to have the know-how, if not being adept with all these advanced technologies. The accounting outsourcing partners, like Datamatics, work on all the latest systems and tools to make sure that every business need is met with the best-suited solution. If you decide to go in-house, these systems, tools, and the training for them comes at an additional cost.
- Pay only for the service you avail – An à la carte approach works incredibly well when outsourcing. It saves you thousands of dollars annually as most outsourcing partners offer a relatively flexible pricing plan. In most cases, you pay for the services you take, but you can also create your packages to meet your needs.
- Compliant and knowledge of industry – Most of the outsourced bookkeeping service providers have a team of experts well-versed in the compliance and regulatory issues of the geographies they serve. As they have years of specialization in accounting and bookkeeping, their cumulative knowledge is more significant than any in-house team you could ever have. It would take you years to train your in-house staff to reach those levels.
- Quality output – Review and quality check are embedded in the process of delivery for any outsourced service providers. You do not have to worry about over/under payment to your creditors or duplicate entries in the system or wrong posting of expenses. Every output is thoroughly reviewed for quality by senior accountant before delivery.
Wrapping up –
That outsourcing is better than having an in-house accounting and bookkeeping team is a never-ending debate. There always will be better and well-built arguments made both in favor and against both the ways of getting your accounting books done. But with decades of experience of serving over 100+ CPA firms, preparing and delivering thousands of bookkeeping and financial statements, we can say that getting your accounting and bookkeeping services outsourced is just an intelligent way of maintaining your account books.