Jan 12, 2018

Posted by in Business tips

Bookkeeping and accounting: In-house or outsourced?

CEOs and business owners oftentimes wonder if creating an in-house bookkeeping and accounting department is more convenient than hiring a third-party specialist to manage this sphere. And to be blunt, the answer is simply no. An in-house accounting department is far from delivering the same service, of the same quality, like an outsourced collaborator would. This is not a secret anymore, plus there are plenty of other reasons for which they should consider this option.

Outsourced bookkeeping service always have a higher quality

When establishing an in-house bookkeeping and accounting department, the chances for you to identify skilful and talented, as well as knowledgeable candidates for this position, are quite low. Because, mainly, these types of employees can be found at companies that handle such matters exclusively. Also, even if there are still candidates that have these qualities, the chances for you, an untrained individual in terms of accounting matters, to identify those, are low. It is not impossible, but outsourced bookkeeping services always come with higher expertise, skill and level of knowledge. This usually happens because companies like fgsanfranciscocpas.com put continuous efforts into training their employees and increasing their value to the company and the company’s clients at the same time.

Outsourced accounting and bookkeeping services reduce the chances of fraud

The accuracy of the information flow between the sales and accounting department oftentimes determines the quality of the data introduced in the accounting system. When an in-house department consisting of only one or two employees handles a large volume of data, invoices, checks and balances, the chances of accidental fraud appear, since it’s difficult to process those correctly in a timely fashion. However, you must always think about malicious action of these employees, since many companies offer these all the necessary means to access their bank account and cover their traces, if necessary. This is why duty separation (which appears only in the case of outsourced bookkeeping services) is necessary inside accounting departments. But chances are, small and medium enterprises cannot financially afford such measures. This is when the prospect of hiring outsourced services of this kind appears.

It’s a matter of costs as well

Obviously, for small and medium enterprises, the costs associated with bookkeeping and accounting pay an enormous role. The annual salary of an in-house bookkeeper reaches somewhere $ 45,000, while the costs associated with the wage of an in-house accountant reach somewhere around $ 60,000. To these, add 20% with some additional expenses per employee, expenses which consist of medical advantages, vacation expenses, sick leave expenses, retirement expenses, testing, training and employee screening expenses. These are expenses that can be avoided when hiring third-party bookkeeping and accounting services. The approximate costs associated with an outsourced bookkeeper revolve around $ 25,000, a friendlier budget for many companies out there.

Generally, small and medium enterprises can have more advantages when outsourcing these duties. Of course, in the case of some companies the in-house option might work wonderfully, but these cases are extremely rare.