Articles | In-House VS Outsourced Accounting Services
In-House VS Outsourced Accounting Services
We have mentioned time to time how important it is for a business entity to have a good accounting department and have up to date and accurate accounting books. A business entity will require an accounting information so as to enable it manage and control its finances and resources. It also needs it for it to be able to improve on its level of profit earning, should it realizes it is declining in its profitability level. But most small to midsized companies either because of shortage of capital, right resource or other reasons fails to have excellent accounting records.
Here is where accounting outsourcing comes into play.
I have listed some of the benefits Outsourcing firms enjoy over maintaining an in-house accounting staff:
Cost: Accounting outsourcing can save you between 30% to 60% than maintaining an in house accountant. Eg. Average salary of a bookkeeper in US is $ 32,000 plus overheads cost plus payroll taxes plus other misc. benefits (medical, conveyance etc). All included will cost you around $40,000-45,000. But an outsourced bookkeeper would cost you anywhere around $12,000-15,000.
Outsourcing Companies are much less vulnerable to employee absences and illnesses because they employ more accounting and bookkeeping personnel than any small- to mid-size business.
Outsourcing companies invests in quality control to retain clients, so their work is highly accurate. They also maintain ongoing training for their staffs.
These outsourcing service providers provide a full range of required skills, from the clerical to the controller level.
Staffing: One of the benefits outsourcing services has over in-house accountants is the power of flexible staffing. Hire the outsourcing services only when you have work whereas this is not possible in case of an in-house accountant.
Hire, Train, and manage staff: For an in-house accountant hiring and training full-time accounting staff or temps can be very expensive and time consuming. Whereas in outsourcing services you do not have to bother about hiring or training the person. It is the duty and responsibility of the outsourcing company.
These are some of the benefits small to midsized entities can enjoy by employing an outsourcing service provider. Some companies may view outsourcing as "giving up control" of a vital part of the business. In fact, it is really a way to gain control by managing the day-to-day operations of the organization and paying someone else to report the numbers. More and more companies are recognizing the need to stay focused on what they do best - their core competency or process. To business entities that means keeping up with what is going on in the organization with the clients, customers and staff. Outsourcing accounting means one less internal function that takes time and resources away from what really determines a company's success.
