Outsourced vs. In-House Accounting: Key Considerations for Your Business

In-house accounting or outsourced accounting considerations

Using an outsourced accounting firm is growing in popularity for many reasons.

Once reserved for larger organizations, smaller organizations are finding outsourcing a great way to solve the difficulty of segregating duties with a small staff and keeping up to date on current accounting knowledge and systems.

Here are some considerations when weighing your options:

Benefits of Outsourcing	Hiring an In-House Accountant	Partnering with a CPA firm
Provides expertise and allows you to benefit from continuous education	An in-house accountant has limited resources to refer to when questions come up. You must rely on the narrow scope of knowledge that one person has acquired.	Outsourcing with a CPA firm specializing in your industry ensures that your team has a deep pool of expertise to draw from. CPA firms invest each year to
Provides oversight and quality control	An in-house accountant often has no one qualified to ‘oversee’ their work other than a year-end audit to look for ‘material’ misstatements (meaning only very large mistakes). Audits do not look for fraud.	CPA firms have strict quality control standards to adhere to, as well as processes in place to oversee the work being done at each level.
Segregates duties and strengthens internal controls	Employing one person to be responsible for receiving, spending, coding, depositing, approving, and reconciling all activity is a setup ripe for fraud and uncaught errors.	Segregating these processes improves accuracy and lowers risk. It is important to note that good management, awareness of accounting and communication are key. Segregation does not mean handing off all management of finances but establishing solid checks and balances.
Stops the turnover madness	Maintaining an in-house accounting professional includes payroll benefits, training and absences. Knowledge and processes live ‘in an accountant’s head’ and often get lost each time you experience turnover.	Turnover happens. Having more than one person on your accounting team reduces the negative effects. Find an outsourced solution that has redundancy of knowledge on their team and documents processes as well. Outsourcing is not a temp service, but should be a team that invests in maintaining the quality of your accounting long term.
Allows you to recruit talent related to your mission	An outsourced firm ‘lives and breathes’ accounting and recruits accordingly. You ‘live and breathe’ your mission and can recognize the talent you need to fulfill that mission. Focus on finding the master that can lead your mission, not on finding a jack of all trades.	CPA firms invest in recruiting talent that excels in the correct areas. Outsourcing doesn’t mean your team will be ‘hands off’, it means that they will be guided and supported. You will still need responsive staff that can communicate and take care of daily office tasks. You can lean on your outsourced accounting team to focus your team on what finance information is most relevant.
Benefits from investment in finding and troubleshooting new and better accounting tools	As an in-house accountant is essentially an island. An outsourced firm is a team that evolves, researches and learns from a multitude of clients in your industry for what is working best and what to avoid.	Rely on your outsources team to give you options with pros and cons and be open to new tech and new processes.
Supports you efficiently during your audit, tax, or other outside projects	Depending on skillset, an in-house accountant may struggle to maintain books that are optimal for supporting other services such as audit, tax, and 1099 support throughout the year. This can cause unnecessary findings, errors, or additional work at year-end.	Partnering with a firm that specializes in these services increases the quality of your processes to optimize output. A CPA firm excels at communicating efficiently with third-party providers.

Each situation is unique, and a thorough analysis of costs and benefits is required before making the decision on how best to complete the accounting function for your organization.

Find out more about our outsourced accounting services or contact Ruth Lott, Director in the Business Solutions Team if you have questions.

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In-house accounting or outsourced accounting considerations

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