Many business owners rely on in-house accounting team to prepare their financial statement. As they fear that by handing the task of bookkeeping and accounting to a third party provider of outsourced accounting services, their vital financial data can get leaked or be misused. However, when the question of managing a company’s financial statement comes along with running a business smoothly, it is advisable to leave the task of accounting and bookkeeping in the hand of experts. Thereby, it would allow company employees to provide full concentration on their work and bring more productivity to business.
Difference between In-house and Outsourced Accounting
According to a research, when a company employs an in-house accountant, the accountant works for the organization solely. He/she usually performs functions and activities related to tax filings and making financial reports. On the other hand, the function of an outsourcing firm/ person is very similar. However, they are responsible to the form and not to the organization for their daily accounting work.
Well, in-house and outsourced services can provide different level of workflow while managing the accounting service of a company. Well, outsourcing the services can cost less and provide experts for a error-free accounting.
Benefits Associated with Outsourced Accounting
- As the outsourcing accounting firm is a professional, it have with them a team of skilled experts. They can be of immense help for a business as they can do the accounting job with care.
- The outsourced accountant being available 24×7 can serve the clients at any point of time. Also, that can easily back up any work left unfinished by the business’s accountant.
Major Differences That You Get To See
Quality and Training
When hiring in-house accountants, you will look for their experience. Hiring an unskilled accountant may lead you spending more. You will need to train them so that they can process and provide better reports. However, outsourced accounting can provide high-quality services. They have skilled and certified accountants for the job.
Financial Reporting Process
The financial reports vary for businesses based on their needs and the number of transactions. In-house accountants need to be skilled, educated and trained; so that they can provide accurate reporting at the month end. Often in-house accountants get involved with other tasks that can lead to delay in financial reporting. Well, outsourcing accounting services can help in avoiding delays and also reduces the risk of inappropriate financial reports.
For business entities cost is always a crucial factor when choosing an accounting service provider. Maintaining full-time in-house accountants can be very costly for small businesses. On the other hand, business organization is not responsible for paying overhead costs when taking the help of an outsourced service provider.
In-house team can have better controls and they can manage the information that comes to the accounting system. They can ensure the information is properly classified. When a company is having two-three accountants for handling books, it increases the chance of frauds. On the other hand, outsourced accounting services reduce accounting fraud risks as they are not related to the organization. Outsourcing companies usually reviews the accounts to ensure no discrepancy is present.