As a startup founder, you may be trying to single-handedly take care of every aspect of your business, including managing your accounting and finance functions. However, research from the American Psychological Association shows that multitasking could take a toll on productivity — in fact, even brief mental blocks created by shifting between tasks can cost as much as 40 percent of someone’s productive time.

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ACCOUNTING
Outsourcing accounting services vs. hiring
an in-house accountant: Which is better for
your small business?
Posted by Neha De
July 4, 2023

2. As a startup founder, you may be trying to single-handedly take care of every
aspect of your business, including managing your accounting and finance
functions. However, research from the American Psychological Association shows
that multitasking could take a toll on productivity — in fact, even brief mental
blocks created by shifting between tasks can cost as much as 40 percent of
someone’s productive time
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But with accounting being crucial for every business, you may be on the fence
about choosing between outsourced accounting and an in-house accountant.
While both options have their advantages and considerations, understanding and
assessing them based on your specific circumstances and needs can help you
make an informed decision.
Let us compare the pros and cons of outsourcing accounting services to hiring an
in-house accountant, empowering you to determine which option best suits your
small business.

3. Cost considerations.
Outsourcing accounting services allows small businesses to access experienced
professionals without the need for a full-time worker. This helps you save money
by eliminating expenses such as salary and benefits like retirement, vacation time
and health insurance — outsourced workers usually cost less than regular full-time
workers. In addition, there is no need to spend money on software and the
equipment essential for handling the accounting and finance processes.
Employing an in-house accountant, on the other hand, gives you the benefit of
having someone dedicated to your business’s specific financial operations.
However, it calls for several fixed costs associated with salaries and wages,
benefits and office space.
Additionally, finding and hiring a qualified accountant can be a time-consuming and
competitive process. Retaining this employee may also be a challenge, as they may
seek career advancement opportunities elsewhere.
Experience and expertise.
Outsourced accounting gives small businesses access to a team of highly qualified
and trained accounting professionals, who specialize in various areas such as tax
preparation, bookkeeping or financial analysis.
These experts bring a wealth of experience and knowledge, ensuring accuracy
and compliance with regulations. Additionally, they use the latest technology and
processes to ensure that your data is accurate and secure.
Talk to us about how Escalon’s essential business services can help your firm
operate strategically.

4. In-house accountants, on the other hand, may possess a broad understanding of
accounting principles, but they may lack specialized expertise in certain areas. And
this can be a disadvantage for you when dealing with international accounting
standards, complex tax regulations or industry-specific financial requirements.
Scalability and flexibility.
Outsourcing accounting services offers flexibility, as it allows small business
owners to scale the services of the outsourcing firm according to their business
needs. This adaptability allows you to access the right level of expertise without
the burden of hiring and managing additional personnel.
While hiring an in-house accountant may offer a more personalized approach,
especially if your company needs constant communication and collaboration, this
approach may lack flexibility during slower periods or when specialized expertise
is needed on an ad-hoc basis.
Technology and tools.
Outsourcing accounting services gives small businesses access to advanced
accounting software and tools. Outsourced service providers stay current with the
latest technology, which can improve accuracy and efficiency in financial
processes. This eliminates the need for you to invest in expensive software and
ensures compliance with changing regulations.
With an in-house accountant, you have control over the choice of accounting
software and tools that align with your business needs. However, purchasing and
maintaining the necessary (and, often, expensive) software can add to your
expenses, and ensuring the accountant is proficient in using the tools may require
additional training.

5. Takeaway
The decision to outsource accounting services or hire an in-house accountant will
ultimately depend on your specific business requirements, budget, expertise
required as well as the flexibility you desire. Therefore, before making a decision
that aligns with your business objectives, it is important to carefully evaluate your
budget, business size and complexity, scalability needs, expertise requirements,
compliance concerns, risk factors and long-term goals. A thorough analysis of
these elements will help you choose the best option that suits your company’s
unique needs, and maximizes financial efficiency and accuracy.
Want more? Escalon has helped over 5,000 companies across a range of
industries to utilize the experience and knowledge of financial experts to tailor
their financial strategies and solutions. Talk to an expert today.
Schedule a call today
This material has been prepared for informational purposes only. Escalon and its
affiliates are not providing tax, legal or accounting advice in this article. If you
would like to engage with Escalon, please contact us here.
Author

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Neha De
Neha De is a writer and editor with more than 10 years of experience. She has worked on a
variety of genres and platforms, including books, magazine articles, blog posts and website
copy. She is passionate about producing clear and concise content that is engaging and
informative. In her spare time, Neha enjoys dancing, running and spending time with her
family.
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