Accounting Outsourcing vs Hiring an Accountant: Which One is Right for Your Practice?

Is running an accounting practice in the United Kingdom challenging these days? It can be if you are not prepared for it. Among the challenges to be prepared for is handling the accounting work; either you can start hiring an accountant for your in-house team, or you can outsource it to an accounting service provider. It’s an important decision to make that will impact the efficiency and productivity of your accounting practice in the foreseeable future. Both these paths of getting accounting done are quite different, but their goal is the same: getting the accounting work done for you accurately and professionally.

So, it’s Accounting Outsourcing vs Hiring an Accountant and we are sure you are interested in knowing more about these paths. That’s why we have created an in-depth blog that will explain in detail the pros and cons of hiring an accountant and accounting outsourcing. This way, you will get an insight as to which method will get you the better results, thus enabling you to make an informed decision.

So, let’s begin.

Understanding Accounting Outsourcing

Under accounting outsourcing, you can transfer a part or all the major accounting responsibilities to a third-party outsourced accounting service provider you can trust. With a service provider by your side, you will get access to highly experienced and talented professionals, which will be a blessing if your accounting practice expands rapidly. It will also save you from hiring and recruiting new staff, thus saving considerable time and money. For more on our offerings, explore Accounting Outsourcing Services.

Accounting and booking outsourcing are highly flexible options. During lean periods, you can scale back rather than pay in-house staff members who are doing nothing. The accounting outsourcing service provider has the capability to elevate your accounting practice’s performance, accuracy, and professionalism.

Under accounting outsourcing, service providers offer the following services:

• Bookkeeping services
• Payroll services
• Management account
• Year end services
• Audit services, to name a few

Pros of Accounting Outsourcing

While doing an Accounting Outsourcing vs Hiring an Accountant, you will find that accounting outsourcing has been gaining traction among UK accounting practices for its benefits. Some of those major benefits are as follows:

Time-Saving

Conducting accounting work in-house requires constant recruiting, hiring, and training of accounting professionals. Also, your teams will have to manage a large amount of client accounting work on a day-to-day basis. With accounting outsourcing services, you can rescue yourself from day-to-day accounting work and focus on your essential service offerings.

Accounting outsourcing will help you reduce your labour costs. It is also efficient and quicker than in-house. Service providers also widely use modern accounting software to speed up your accounting process.

Cost Savings

Accounting outsourcing will undoubtedly help you control costs, especially when hiring new people, and in some instances, it will also add value to your services. You can pre-decide with your accounting service provider regarding the accounting services required and decide on the price in advance. With the help of accounting outsourcing, you can reduce administrative costs and staff training.

Access to Experts

Accounting outsourcing service providers will deploy experts who are far more experienced and focused on bringing service efficiency. These experts will be appointed to you on a full-time basis and will deploy their wealth of knowledge. Their experience will add value to your service. These experts are well-versed with the latest accounting standards, rules, and regulations, thus maintaining compliance standards and avoiding costly mistakes.

Focus on Practice Growth

Accounting outsourcing assures you that capable people are handling your accounting tasks, leaving you ample time to focus on new areas that will give you a competitive edge in today’s accounting world, such as Advisory and Consulting Services. Also, if there is any domain where you lack expertise, then the outsourcing service provider will help you get access to that expertise so that your growth does not stop. You can check our insights on Top 10 Accounting Firms in the UK more information and better decision-making.

Cons of Accounting Outsourcing

While doing an Accounting Outsourcing vs Hiring an Accountant, you will find some drawbacks associated with accounting outsourcing, so if you are considering outsourcing your accounting services, you should know the downsides and make informed decisions accordingly.

Inability to Control Accounting Data

Cybercriminals already eye the sensitive accounting and personal data of your clients. When the data is transferred to a third-party accounting outsourcing service provider, chances of data breach increase, which needs to be mitigated. Hence, it is important to make arrangements with the accounting service provider about how to handle sensitive information according to data privacy laws and industry regulations. To handle this situation, professional service providers invest in systems such as accounting practice management software, to protect sensitive information.

Unprofessional Accounting Outsourcing Service Provider

Outsourcing your accounting tasks to an inexperienced accounting outsourcing service provider will damage your practice. Hence, you must conduct thorough research about a service provider before outsourcing. Check the reviews of accounting practices who have experience working with service providers. Also, check their achievements by going through their case studies, which professional service providers publish on their websites. Based on that, compare with other service providers and choose the best one.

Unseen Costs

You will find some service providers pushing services you do not require without your knowledge, leading to unseen costs. Aside from that, some service providers do not offer customised rates and flexible services as per your requirements. Hence, it is of utmost importance to do thorough research and pick a service provider that offers the services you require.

If you are looking to address certain accounting problems, you must research case studies of professional service providers to find out which provider can address your problem efficiently and without any additional cost.

Why Some Accounting Practices Prefer Hiring an Accountant?

With accounting outsourcing being the talk of the town, you may find it hard to believe that there many accounting practices that prefer hiring an accountant or other professionals in-house. Such practices are financially well-secured and can expand their in-house team as per their requirements. These practices prefer this option because they can freely choose professionals with the required skill set and mould them as per their values. For now, we will focus on the pros and cons.

Pros of Hiring an Accountant

Hiring an accountant in-house has many advantages, and we have taken the liberty to list the important ones. These pros are as follows:

Less Occurrence of Data Breaches

Securing your client’s sensitive data from cyber criminals is the prime concern of every accounting practice. You must be aware of the new ways cybercriminals devise to conduct breaches and stay on the toes for privacy regulation updates. Managing the risk of cyber security in-house is the best way because there is a limited need to transfer sensitive data outside of your practice, and you have complete control over your data protection.

More Direct Control

You will have much more control over data entry and security, unlike accounting outsourcing, where it’s handled by a third-party service provider. This means there will be no back-and-forth transfer of sensitive data. If there is any issue, the in-house staff will manage it directly and in real-time.

Access to Experts

Rather than depending on outside expertise, you can start hiring professionals with special skill sets to fill the gaps in your current practice. This will give you immediate access to expertise, thus helping your clients and enabling your growth.

Cons of Hiring an Accountant

However, you should be aware of some challenges in hiring an accountant in-house. So, we are providing a full picture by listing these shortcomings so that you can make a wise decision.

Challenges of Getting the Right Talent

Getting quality staff on an immediate basis is not possible, and multiple accounting practices are on the hunt for quality staff, making your life difficult. To attract qualified talent, you will have to offer attractive salaries, work-life balance, growth prospects, and various other perks. While this will attract new talent and motivate existing ones, it will also strain your budget.

In-house Training

Upskilling and training are required for in-house accountants at regular intervals; however, they are time-consuming and costly affairs. While necessary, they will introduce new ways of doing things that will increase their efficiency. However, there will be costs associated with them, such as training and system updates, along with salaries and hiring costs, which will dent their finances.

Cost

When keeping work in-house, the most obvious cost is the salary of an experienced accountant. However, practices must take a holistic view of all costs involved beyond salary, such as practice and accounting software, professional training, employee benefits and equipment, as this can often get overlooked during the hiring process.

Conclusion

Now that we have explained in detail the pros and cons of hiring an accountant and accounting outsourcing service provider, we will leave it to you to decide which suits you better. As of now, in Accounting Outsourcing vs Hiring an Accountant, our opinion is in favour of accounting outsourcing because of the cost savings, easy access to experts, flexibility in services, and streamlining of the accounting process it offers. However, we leave the final decision to you; after all, you will have to choose based on your requirements.

Speaking about accounting outsourcing, you must be well aware of the competition between multiple service providers in the UK. Among them is a highly capable and rising star, Corient UK. We are based in Coventry, UK, and specialise in offering a wide range of tech-savvy accounting services. From bookkeeping, year-end, payroll, audit, and VAT outsourcing services, we have got you all covered. State your queries and questions on our website contact form, and our executive will get in touch as soon as possible.

We are eager to associate with you on a long-term basis. Hoping to connect with you soon.