Owners of companies face a lot of ambiguity in deciding whether to go with in-house accounting staff or opt for another available option – Outsourcing accounting functions of the company. Many businesses consider making smart decisions toward effective financial management and reducing operating overheads in recent times. However, many small to mid-sized businesses and Startups with limited resources usually find it challenging to choose between in-house staff and outsourcing.
Let us discuss the factors which makes a difference between in-house accounting and Outsourced accounting.
Employing a full-time accountant will involve expenses such as hiring costs and monthly salaries. Along with the amount paid to them as a salary, the company should also provide various benefits such as health insurance, paid leaves, pensions, and other perks. It is very crucial to hire a qualified and experienced consultant to ensure error-free accounting, which is not cheaper.
On the other hand, outsourcing accounting may be more cost-effective. If the accounting function is outsourced, the company usually pays a flat fee for the contract period with the accounting firm without any additional costs towards employee benefits or any other overhead costs. The accounting firms usually charge their services at an hourly rate, while some offer a flat rate with a transparent fee structure and billing clarity. In the case of a small firm, usually, the accountant fee won’t be more. If one compares the overall costs, the outsourcing costs are much lower than the other option.
Improved Technology Accessibility
Technology empowers accounting professionals to make the company accounting process more systematic and streamlined. But the technology could be costly and may take a significant portion of the company’s budget. In addition, the technology requires additional costs for implementation and training.
Accounting Firms use cloud accounting software to organize and report company financials, and it will save both time and money and provide necessary insights. In addition, as the firms deal with several clients, buying, implementing and training the staff is feasible as accounting is their sole function.
The quality of accounting obtained by the accountant varies depending upon the skills and experience of the accountants. However, accounting quality will impact the various financial insights and affect the decision-making process. Therefore, it is imperative to have proven accountants in the company. Additionally, the in-house bookkeepers and accountants take up other responsibilities, such as payroll and human resources, which can take time away from their core accounting and may affect the accounting quality.
In the case of accounting firms, the reputation of the firm is always at stake. It ensures the firm employs and practices an error-proof accounting with higher accountability and streamlining. In addition, the firms ensure that clients’ accounts are accurate and critical when considering in-house accountant vs outsourced accounting. Outsourcing Accounting Services in the UAE means a team of qualified professionals will be handling the books of accounts, providing the best service. Accounting firms in Dubai are full of experts with the required qualifications, skills, experience, and a sharp eye for detail.
Upscaling is required whenever a company is on a growth trajectory and expands rapidly. It will require hiring additional staff to cater for the accounting demands and investing significant time to ensure that the right talent is hired. It can sidetrack the owners from their main agenda of achieving set targets. Accounting firms with qualified and well-trained staff can come to the rescue of such firms at all times. Accounting firms also work closely with growing companies to fulfil the increased accounting demands with minimal disruptions.
Companies will face a higher risk of fraud when one or two employees are handling the accounting functions of the entire company. In addition, in companies, the same people are usually also involved in paying the bills and dealing with the bank accounts. Therefore, it will further increase the risk of fraud.
Outsourcing accounting functions will help reduce the risk of fraud associated with accounting because the accounting firms ensure the separation of duties related to accounting, bills and bank handling. The firms employ rigorous steps in providing financial statements for the clients. Most outsourced companies use a system where two sets of eyes review each step with various accountants working on one single company account.