The decision between whether to use outsourced accounting services, do it yourself, or hire someone to handle it in-house can be a challenge. While many choose to do it themselves, enough are outsourcing to support a growth of 2.2% in the accounting services industry in 2021. Some choose regular accounting firms or DIY their bookkeeping, while others opt for white-label accounting services. So what’s the best choice for your business? Here are the pros and cons of both keeping your accounting in-house and using outsourced accounting services.
The Pros and Cons of Doing Your Accounting In-House
For some, handling their accounting in-house is their default option. Here are the plusses and minuses of either DIYing your accounting or having an employee do it.
You can maintain precise control over the process. For some companies, control over their accounting may offer some benefits, particularly for those who prefer a hands-on approach to all aspects of their business’s operations.
It’s easier to establish a relationship with an in-house accountant. You may see an in-house accountant five or more days a week if they work for you, and, for some business owners, this has value. You can foster a trusting relationship as you get to know your accountant. This connection can make you feel more comfortable providing detailed financial information.
In-house accounting services can be very expensive. Whether you hire a full-time or part-time employee, using an in-house accounting service can be costly. The average salary for an accountant, according to Payscale.com, is $52,233, which can quickly impact your budget.
In-house accounting services can vary significantly in quality. With an individual or even a small team of accountants working for you, you may not get the kind of comprehensive, thoughtful accounting you need. Without a team of voices and accounting minds supporting a decision, there’s a higher chance of mistakes or oversights. The chances are far greater when you do it yourself, particularly due to understandable biases business owners may have.
The Pros and Cons of Outsourced Accounting
Outsourcing your accounting by hiring a white-label accounting firm or using outsourced bookkeeping services also comes with benefits and drawbacks.
You get reliable, professional service. Bookkeeping and accounting services for small businesses provide you with highly skilled and experienced professionals who put their expertise to work on your behalf.
It’s less expensive. Whether it’s tax preparation accounting, auto repair shop accounting services, or restaurant bookkeeping services — you can pay less for detailed, comprehensive accounting services if you outsource your solution. Whether you pay a monthly subscription or a flat fee for services, the investment can be far less than what you would pay an in-house CPA.
You save time. With outsourced accounting for retail business, construction bookkeeping services, or other industries, the amount of work you have to do is minimal. So there’s no need to rush and stress at the close of your fiscal year or other times when the pressure is on—your outsourced solution has you covered.
Overspending on services. You can accidentally over-spend on outsourced accounting services, particularly if you lose track of what you have them do for you. For companies that charge by the service, it’s best to keep track of the services you request, as well as how much each one costs.
It may be difficult to micro-manage your services. When your outsourced solution is many miles away, you may have difficulty checking their work throughout the day or conveying concerns the minute they arise. If you’re used to in-house accounting services, it may take a little while to get used to someone on the outside handling your finances.
Use a Combination of Both In-House and Outsourced Accounting
You can also opt to use both, particularly if you own a small-to-medium-sized business. For example, you could keep some of the simpler accounting in-house and outsource the more time-consuming tasks. Also, if your in-house team—or you—don’t feel confident doing a certain kind of accounting, you can let your outsourced solution handle it.
Whether you choose to outsource some or all of your accounting, you can rely on PABS for reliable service that saves you time and money. To learn more, connect PABS today.