5 STRONG ADVANTAGES OF OUTSOURCING ACCOUNTING, TAX AND PAYROLL FUNCTIONS INSTEAD OF HIRING IN-HOUSE
We are frequently asked by our clients – especially small to medium size businesses – to advise on the benefits of hiring an accountant inhouse (either full or part time) compared to outsourcing their accounting function.
A lot of business owners seem convinced that as their business grows, the accounting should be performed inhouse, or ‘’close to the operations of the business’’, as we often hear. The reality is that many business owners are simply more comfortable when they can physically see and talk to their accountant.
It is important to state – for the sake on objectivity – that we are accounting services providers, and we therefore do have an incentive to advise in favour of outsourcing bookkeeping.
However, the reason we are in the business of offering outsourced accounting services in the first place, is because we genuinely believe this is the most effective solution for the accounting needs of most businesses.
1. Valuable time saved
Interviews take time. And time is money. And if you are a decision-maker for your company, you need to be very ungenerous with your valuable time.
Often you will have to go over tens, maybe hundreds, of CVs before you even start interviewing.
Then, when you do start interviews, you find that some people are not good enough, others seem good but ask for too much, and some people don’t even bother showing up to their interview.
Some people apply for jobs to ‘improve their interview skills’, while some others are just looking to leverage an employment offer from you for a higher salary with their current employer.
Even when you think you hired the perfect accountant, he or she may always resign unexpectedly. According to the figures of the (US) Bureau of Labour Statistics, employees now change jobs more frequently than ever before in history.
Outsource accounting, and you are free to focus on growing your business.
2. Quality of work
A fundamental advantage of outsourcing is that you can benefit from junior accountants doing the bulk of the work, and more experienced managers reviewing that work.
In addition, if you want VAT advice or other specialised tax assistance, this will most probably be allocated to a tax specialist.
Hiring an in-house accountant means that you only have a single set of eyes doing everything. Moreover, your accountant will need to have an in-depth knowledge of a wide range of subjects to fully cover the needs of a single business (book-keeping, VAT, payroll, etc).
3. Flexibility
Employment contracts are largely inflexible, ie an employee is typically paid for a fixed number of hours every week (typically 40 hours per week).
On the other hand, outsourcing your accounting, tax or payroll function is perfect for scaling purposes.
You could agree to a small increase in your accounting fees as the volume of a business’ operations increases. But you cannot negotiate 5 more hours per week from an employee who is already working 40 hours every week!
You could even negotiate a fee based on volume of work – ie if the company does 100 transactions in a month, accounting cost will be €X. If the company does 500 transactions, cost will be €Y.
4. Efficiency
Unsurprisingly, the value for money you get when you outsource is significantly higher than when you employ someone in-house.
For example, you can benefit by having an experienced accountant reviewing your company’s books and charging a few hours per week only, instead of having to pay their full salary.
You can also benefit by using a top-notch accounting software (specially designed for Cyprus tax rules) without having to purchase the full software license.
You can avoid paying for expensive training seminars, having your managers spend (paid) hours on interviews, spend time on salary negotiations etc. Money you spend on accounting is spent only on what is necessary.
5. Continuity
A fundamental advantage of outsourcing vs in-house bookkeeping, and a common denominator in all previous 4 arguments, is the guaranteed continuity of service when you outsource.
Hiring in-house means your accountant will not always be available. Maybe because he/she is on annual leave. or maternity leave, or sick leave, or resigned, or…
Outsourcing your bookkeeping means you now have a dedicated team, and at least one member of our team will always be available to talk with you.
You can view more details about our accounting services here.
Or, if you are convinced about the advantages of outsourcing your bookkeeping, get in touch with us.
