Accounting is a key function in any business, regardless of size or industry. When it comes to managing a company's finances, business owners have a choice: hire an internal accountant or use an accounting firm. Both options have their pros and cons, but more and more businesses are choosing to outsource their accounting services. In this article, we look at four key reasons why you should choose an accounting firm over hiring an internal accountant.
One of the main drivers behind the decision to hire an accounting firm is cost savings. Having an in-house accountant can be significantly more expensive compared to outsourcing accounting services. Here are some aspects to keep an eye on:
A full-time accountant requires a fixed salary, regardless of the amount of work performed. In addition, employers must pay payroll taxes, insurance premiums, and other benefits. An accounting firm usually offers flexible pricing plans that can be adjusted according to the size and complexity of the work to manage costs more effectively.
A full-time accountant needs a workspace that is equipped with technology and software. This includes computers, furniture, specialized software, and access to databases. Accounting firms are already equipped with everything they need and include these costs in the price of their services.
Accountants must constantly update their knowledge and skills to keep up with changing tax and accounting laws and regulations. This can require additional costs for training and certification. Accounting firms bear these costs themselves by ensuring a high level of professionalism among their staff.
Accounting firms specialize in providing accounting services and have teams of experienced professionals with in-depth knowledge of accounting and taxation. They can offer a higher level of competence than a single in-house accountant.
Accounting firms employ teams of specialists, each with their own unique experience and expertise. They offer a more comprehensive and accurate service covering a wide range of accounting and tax issues. An accountant may not have such deep and varied knowledge.
Accounting firms are required to monitor any changes in legislation and update their knowledge. They regularly train their staff to keep up to date with all the latest changes and innovations. An accountant may not always be able to keep up with all changes and updates in legislation and accounting practices.
Accounting firms offer flexible and scalable solutions that can adapt to current business needs. This is especially important for growing businesses whose needs can change significantly over time.
As a business grows, so does its need for accounting services. An accounting firm can quickly adapt its services to new requirements by offering additional resources and expertise. This is much harder for a full-time accountant, who may need additional training or even hiring extra staff.
Accounting firms can offer a range of different service packages, from basic bookkeeping to comprehensive financial analysis and advice. This allows businesses to choose exactly the services they need at any given time without having to overpay for unnecessary features.
Accounting firms often offer their clients additional guarantees and levels of liability to help reduce financial risk and protect against errors.
Many accounting firms have professional liability insurance to protect clients against financial losses caused by errors or omissions. It provides additional assurance of the quality of the service provided. An accountant generally does not have this type of insurance, and mistakes can result in significant losses for the company.
Accounting firms must comply with all applicable laws and regulations and minimize the risk of non-compliance and sanctions. They closely monitor changes in legislation and follow best practices to ensure that all financial transactions are fully compliant. An auditor doesn't always keep up to date with all legislative changes, which increases the risk of errors and inconsistencies.