As a business owner, to be successful you have to meet every unique challenge while maintaining stable financial status. When we speak about business operations, people prioritize their work as per benefits they gain. It’s easy to guess which one holds the major interest, but when it comes to the backend, accounting is one of the most sensitive operations.
Apart from managing accounts on a day-to-day basis, accountants have to a lot in their hands. Preparing and managing weekly, monthly, and annual financial reports, coordinating with auditors, performing cost analysis, payroll, revenue and asset accounting and finally, forecasting future expenditure trends and commitments.
Perhaps looking at all these task and responsibilities, hiring in-house team may seem the most convenient option, but again will that be the same for business owners running SMEs?
In this blog post, our discussion will be focussed on whether accounting operations should be outsourced or to be carried out under the watchful eyes of an organization through a dedicated accounting team?
Option I: Hiring In-House Accountant/Accountant Team
You have perhaps decided to hire a team. So let’s see every possible consequence.
- One of the vital factors is you will protect the intellectual property rights of your business information. Since resources will be dealing with critical client information, you can make them sign a contract and protect the confidentiality of your business.
- With resources under one roof, it will be easier for you to resolve accounting issues then and there as per your convenience.
You don’t have to waste time setting up tough schedules, making long calls or wait in anxiety to meet deadlines.
- Loyalty – It’s a very big requirement and it’s easier to identify such qualities when you have resources or accountants working under your nose.
You may have contracts and other obligations to protect your rights and requirements, but at the end of the day, when you require something more than usual, loyalty plays for you.
- Let’s start with something that actually bothers you, I mean anyone.
Accountants don’t come cheap. It’s a luxurious profession. It requires an unmatched level of finesse to deal with tough financial circumstances. And hire some unskilful resources; again you have to pay in terms of both reputation and money.
- Accounting is an electrifying job. The state of your financial statements depends on the work performed by your team. But it’s not easier to find top talent. And if you have a thin budget, it will be impossible. And resources fresh out of the school will have you meet more expenditure.
- Meeting employee benefits is tough, especially when you have to pay for non-working hours. When you take-in a permanent employee, your responsibility will be to pay them full-time irrespective whether you have work or not.
Option II: Outsourcing to Professional Accountant Team
You decided to outsource to a professional service provider.
Let’s analyze, what benefits and drawbacks you get to witness when you manage your accounts and finance through a third-party service provider.
- Let’s come straight to the point, outsourcing addresses issue that bothers you the most.
Skilled resources do not come cheap. But when you hire third-party accounting agency, you will even meet that criteria at a lesser cost. Also, you don’t have to put up with employee payroll issues, benefits, insurance and other money-draining practices.
On the whole, you will be spending less.
- Employees and human resource issues are tough to deal with. Employee protection laws in the US are very rough. Since you will be outsourcing to freelancers or accounting agencies, you will keep yourself quite safe from such consequences.
- By reducing headcount and increasing revenue, you will be running an efficient business.
And one more point, since you will be associating with a professional agency, you will be assisted comprehensively in delicate financial situations.
- The drawback of working with remote agencies is you have to risk with sensitive business information. From hiring resources to dealing with negotiations, the process will take a very long time.
- Distance and time may play at your disadvantage.
Regular meetings should be obligatory when it’s something like accounting. But different geographical locations may not give much opportunity for such encounters.
Also, with large time-zone difference, you may have less knowledge about their accounting practices.
- Your accounting partner should be well-informed about various accounting practices and tax laws. And trust me, choosing the right partner is one of the major challenges when you are outsourcing.
So, should you outsource your accounting operations? Or not?
For every business, the requirements are unique. It’s never one size fits all. So when you are dealing with accounting, it’s all about numbers and staying in good books with tax authorities.
Whether you hire someone outside or have someone in-house to work on your accounting operations, your responsibilities will not change. Even if you choose the most suitable vendor, you should be in the loop monitoring all the time.