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Why outsource accounting?

Many small and medium-sized businesses decide to invest in a fully-fledged in-house accounting function, typically employing a mix of full-time accountants and accounts clerks.

In-house staff may appear to be less expensive when the hourly wage is considered, however, when you take into consideration the total costs for hiring, training, supervision, benefits, payroll taxes and the headaches associated with movement of staff, the actual hourly cost for in-house staff is much higher than expected.

While certain complex businesses do require a certain degree of in-house finance related staff, many can operate perfectly well by outsourcing all or part of the accounting function to qualified professionals.

The key benefits include…

  • Qualified accountants know accounting! – by outsourcing your accounting function to a professional and dedicated accounting firm that has experience working in various industries, you are effectively hiring a team of experienced experts that know what they are doing. This should result in higher levels of quality and reliability.
  • Difficulty in recruiting competent accountants – it is no secret that we are currently operating in an employees’ market and finding, and retaining, the right accountant is not an easy task. By outsourcing your accounting function, you are shifting the problem of recruiting onto the accounting firm, allowing you to focus on your main business.
  • Scalability – accounting firms can generally provide you with various options. For example, a business may initially require quarterly management accounts and not monthly management accounts, which therefore keeps costs low in the early stages. As the business grows, it is easy to scale upwards and increase the reporting frequency and type of services required. This allows a business a certain element of flexibility that cannot be achieved when in-house accountants are recruited.
  • Additional services – accountants generally have different strengths and weaknesses. For example, certain accountants may have a strong background in VAT and tax while other accountants may be more exposed to other areas. By outsourcing your accounting and finance function to a professional firm, you can request certain highly specialized advice and support that an in-house accountant might not have.
  • Access to better tools and processes – professional accounting firms have dedicated a significant amount of time and energy to implementing better tools and processes. Such tools and processes can help increase efficiency within your business, allowing your business to focus on more important targets.

What outsourcing options do you have?

1. Outsourcing all your accounting and finance function

A business may opt to outsource all its accounting and finance functions – this effectively means that the outsourced accounting firm will handle all finance related services, from basic tasks such as the issuing of sales invoices to customers, to more complex responsibilities, such as presenting the company’s financial statements to its board of directors.

2. Retaining an element of in-house tasks

In many instances, retaining an element of in-house finance tasks can be a smart move. If set up correctly, this option could be the most efficient and cost-effective way of setting up a successful accounting and finance function.

This is because certain time-consuming tasks, such as effecting bank payments to suppliers and employees, issuing of sales invoices and chasing debtors can be handled by individuals without a strong finance background, at a much lower hourly cost.

As a result, the outsourced accounting firm can concentrate on the more complex tasks such as preparation of management accounts, VAT and tax computations and reporting to management a regular basis.

3. Outsourcing specialized services only

A business with a fully functioning in-house accounting and finance function may still need support and advice on certain complex matters, such as tax, VAT and payroll matters.

Keeping abreast of the constant changes to accounting regulations and tax and VAT laws is a major challenge being faced by all accountants. Therefore, having the support of a professional accounting firm ensures that the business remains in line with all obligations.

4. The outsourced financial advisor

Hiring an experienced CFO at an affordable price is not an easy task in today’s job market. In the absence of a CFO, this option involves the hiring of a financial advisor to attend certain important management or board meetings to provide a fresh, unbiased perspective to the interpretation of a company’s performance and outlook.

The financial advisor could also act as a reference point to the in-house accountant. This option adds a new dimension to any small and medium sized company and, if done effectively, can provide management with invaluable support and guidance.

At Zampa Debattista we can assist your business with all your outsourcing needs. Get in touch with us for a discussion on how we can assist your team and add value to your finance function.

Mark Wirth


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