Being in business, you might find it both rewarding and challenging being your own boss. One of the main benefits of working for yourself, of course, is having greater flexibility over your time, tasks, vision, goals, creativity, and the like. However, apart from running your business, you may find yourself having to be your own accountant as well.
Unfortunately, there’s only limited energy you have and so much time in the day. Quite frankly, much of that time and energy you have you’re going to want to preserve for the things you want to do in your personal life like hang out with friends or watch your child’s soccer games. The financial part of a business can be exhausting for many.
In turn, you might hire an employee as your personal bookkeeper and accountant. However, the smaller and newer your business is, the least likely you might find this a viable option if you can’t yet afford any employees. However, the last thing you’ll want to do is leave the finances to yourself, especially if you lack the will and/or expertise.
That said, you might be considering outsourcing your taxes and other financial services to an accountant. However, there may be some uncertainties you have in terms of picking between having an in-house employee versus outsourcing an accountant. It’s only natural that you worry about picking the right option for the sake of your business.
Let’s talk about what makes these two options differ from one another, so you can decide which route you want to go on.
Training and Experience
Chances are, you don’t have the knowledge and expertise to engage in the financial part of your business accurately. However, even if you do, the quality may suffer if you put these vital tasks on the backburner or generally put little effort into engaging in such. After all, many business owners don’t have the time to perfect their financial records.
When it comes to either hiring an in-house employee or outsourcing your taxes and other financial records to an accountant, you’re more likely to get someone with better training, experience, and general financial knowledge when you go the accountant route.
To top it off, outsourced accountants also may have a better grip on common and complex accounting problems and their ability to deliver work on time. Meanwhile, with an in-house employee, you may be stuck with an amateur staff member who may or may not be as serious about accounting or even have formal experience at all.
This isn’t to say that when you hire someone in-house that they won’t be able to provide a high-quality, knowledgable experience. Rather, note that when you hire an employee, it’s possible that they are self-taught rather than professionally trained in their field. Self-trained and professionally trained can certainly make a noticeable difference.
Another benefit when outsourcing to an accountant is that fact that you may be able to find online reviews to verify that their work is top-notch. Nevertheless, consider the fact that even a professional accountant with years up their sleeves may not be comparable to the work of another professional or even self-taught accountant.
Everyone has their own way of doing things depending on their personality, skill set, experience, work ethic, and knowledge. However, when compared to in-house employees, an accountant that you outsource tends to work through a more streamlined process to get financial services completed.
However, the work process of your in-house accountant may be more lax and lenient depending on your expectations for them, how you train them, and what specific tasks you want them to complete. This, though, may be more beneficial if you want a little more control over how they complete the tasks you delegate to them.
Remember that when you hire an employee in-house, you are viewed “above them” as their boss. Although, when outsourcing your financial work to an accountant, you are essentially their client rather than their boss. For that reason, the process they use may vary dramatically from your own.
These different roles can impact the work process that the individual you opt for will offer you and your business. The varying work processes of in-house staff versus outsourced accountants brings us to our next point: the likelihood of mistakes and fraud they may commit on the job.
Mistakes and Fraud
When doing the taxes for your business and keeping its financial records, perfection is important. Especially as a business owner, you might find it too stressful and tedious to tend to the financial aspects of your business on your own. The more you feel overwhelmed and annoyed by such tasks, the less accurate your work may be.
Thus, it’s no secret that upon hiring an employee or outsourcing your business’s finances to an accountant, you want someone to know what they are doing. For those who want the most precise work, hiring an accountant can lower your chances of critical financial errors or fraud.
With many accounting service providers that you outsource to, you might not only have one highly-trained employee engage in the financial process but perhaps more than one. With more eyes and more brains involved, mistakes are much more likely to be caught and fixed before everything is finalized.
Also consider the fact that when you have an accountant in-house, you might give them other job duties like human resources. Although having this employee take on various tasks can be helpful for you, keep in mind that these duties may impede their ability to get financial tasks done in a timely, consistent, accurate manner.
Especially in business, the costs you pay to have your taxes and other financial-related services completed can be overwhelming to think about. No doubt, there are many other expenses that you have to tend to first before even thinking about paying someone else to engage in your business’s finances.
Many are shocked to find out that by opting for an accountant versus an in-house employee, they can save more money. When you hire an employee, you not only must pay them for their services but also must provide training, a benefits package, and equipment. However, by outsourcing, you have the potential to save about 40%.
The costs are also substantially more affordable with outsourcing financial duties to an accountant if you consider the fact that these individuals are more likely to provide quality, accurate work. However, many may prefer to pay more for an in-house employee if it means they have more control over how they engage in the work process.
Although, if you only need temporary or part-time accounting services, it’s possible that you could save more money by hiring a part-time employee with basic experience in finance. However, when you need a greater quantity of work done or have complex finances, you can usually get the most for your money with outsourcing.
Picking Between and Accountant and an In-House Employee
Just like when selecting an employee to hire in-house to get your financial tasks done, you’ll have to select an accountant if you plan on outsourcing these job duties. Like employees, not all outsourced accountants will be good selections for your business. For that reason, it’s important that you consider all of your options.
As you go to hire or outsource financial tasks to someone, it’s critical to familiarize yourself with their knowledge and length of expertise in their field. Also, ask them about their work process, and get to know what their strengths and weaknesses are as a person as well as, as a professional.
Although it may seem like outsourcing is the best option, this is not always true in all scenarios. For very small companies or startups, for instance, they might find that it makes more sense to hire an entry-level employee part-time to help them with their accounting. Other business owners might see it differently.
If you are interested in outsourcing financial duties to an accountant, you should learn more about hiring an accountant and what services they may be able to provide. For instance, Brown Smith Wallace, a top accountancy and CPA service firm, provides details of their services and customer testimonies on their website.
When it comes to choosing between hiring someone in-house to take charge of your finances and taxes versus outsourcing that works to an accountant, you might find yourself frustrated and uncertain. Of course, you want what’s best for your business, but how can you be sure you’ll end up making the right decision?
Although having an in-house bookkeeper and accountant gives you more control over the services they offer and how they deliver those tasks. However, choosing to outsource to an accountant tends to be more affordable, more timely, and more precise, even if it means allowing them more power over how they complete their work.
In the end, your budget and business needs will reflect which option is best for you. Small, new businesses who have basic financial-related work that needs to be completed may find it more cost-effective to hire a part-time employee or do the work themselves. However, larger companies may find it more applicable to outsource.