Traditionally, businesses have run their accounting department in-house, managing a diverse staff either fully dedicated to these responsibilities or serving other roles part of the time. However, technology has come a long way in the modern era, and now businesses find themselves divided as to whether maintaining their own accounting is the most cost-effective solution. Third-party agencies specializing in accounting and ecommerce bookkeeping have access to high-end technology and advanced skills and resources that can potentially turn the tables.
However, both sides of the argument have merits. If you are a startup trying to decide whether you want to host your accountant department on-site, here are some pros and cons that might help you decide if this choice is best for you.
Having your in-house department hard at work a short distance down the hall makes it convenient when you need to discuss something with them or modify processes or procedures. When using an outsourced agency, communication necessitates a telephone call, email, or some other form of message delivery. You may have to wait for a response, especially if the agency is too busy to accept a telephone call.
While you can customize outsourced accounting to some extent, their services will often come in the form of bundled packages and services, and they have their own procedures to accomplish their work. When you have your own staff, you are free to micromanage to your heart’s content, molding each employee into precisely what you want them to be, following your established methods.
This also means that if you detect a problem with current procedures, you are free to make immediate modifications, improving every aspect of your accounting, from communication and team collaboration to job operations and bookkeeping strategies.
When enlisting the services of an outside company for accounting, there is a specific set of tasks and duties they will accomplish based upon whatever service bundles or packages you agree upon. With your own team, the workers are not shackled into only accounting; if they have downtime or a slow period, they can perform other roles within your business, helping out when other departments are shorthanded, or there is an increased workload requiring additional assistance to complete tasks by their deadlines.
Since your number-crunchers are your employees, they are invested in your business and performance. That means you can build a strong relationship with these workers and instill in them a sense of loyalty beyond what you can hope for from an outside company. For most businesses, valued and experienced employees are a large part of what makes them successful, so having your own team that understands how your business works can prove invaluable.
One of the hardest parts of enlisting the services of an outsourced accounting firm is the feeling of giving up control. It is common to want to know everything about your business, including how every “i” is dotted and “t” is crossed. Handing over such an essential aspect as your business finances can be daunting. When maintaining this department in-house, you maintain that control and can keep one hand safely on the rudder, running a tight ship to ensure your company stays afloat in the financial waters.
Despite the many benefits of in-house accounting, there is a solid reason why so many companies are outsourcing payroll, bookkeeping, and other financial responsibilities. Saving money is often a primary motivation in the business world. Since technology has developed significantly, it is often more lucrative to have a third-party company take over these responsibilities.
With their state-of-the-art technology and software programs, they can save considerable time completing financial processes, keep improved and more accurate records, and save money on necessary supplies since they tend to have extensive relationships with their network of providers.
Coupled with their specialized expertise in this field and the fact that, as independent contractors, you only pay for their services as needed, businesses can save a lot of money compared to keeping a full-time staff on hand.
When your team does the work and makes mistakes, you have no one to blame for costly errors but yourself. Accounting is a multifaceted profession and requires adherence to many legal compliance measures and strict procedures to ensure that all paperwork is up to specs.
Everyone makes mistakes, but third-party agencies complete accounting procedures for many businesses and have made an art out of compliance and concise, accurate reporting. Not to mention they have the resources for the best programs and hardware to assure that errors are at a minimum. If they do make a mistake, they are culpable.
An unfortunate downside to having employees is that you must provide proper onboarding and training, and you will need to repeat this process if you lose one of your staff. When this happens, it costs additional resources to teach new workers how to perform the job, and since they are new, they are more likely to make a costly error. Plus, new employees require benefits such as insurance and paid time off, throwing more significant expenses into the mix.
During the training period, new employee productivity will likely be slow, meaning that the responsibilities take longer to complete, which can also put additional stress on the rest of your team. With third-party resources, training is their responsibility, and they typically have larger teams to fill gaps more efficiently.
The Bottom Line
Whether you choose in-house accounting or relegate these responsibilities to an outsourced business may come down to your personality and bottom line. There are many benefits to having your team, including the ability to communicate efficiently, mold and control your department as you see fit, and establish a sense of loyalty in the people staffing the department.
On the other hand, if you are looking to save money and don’t mind placing such a crucial part of your business into the hands of others, third-party account firms are experts that can provide a quality, compliant product on demand (and as needed), saving money and allowing you to focus on growing your business.