Some businesses have internal solutions for financial management. And in smaller companies, even the owners themselves can weigh in and tackle the task.
Such an approach could work for the business for a while. But it might not be the best option, especially once the company starts growing.
To answer the titular question, it's more ideal to outsource your accounting, or at least consider doing so. Here are the essential reasons why outsourcing might be a good idea.
Reason #1. Time Efficiency
Your team already has a list of responsibilities. If you don't have a dedicated accounting team, your team will probably spend their precious work hours taking care of the financials as well.
The time your team spends on accounting tasks means you get less time to focus on your company's vital operations, such as improving sales or bringing in new leads.
Additionally, if neither you nor your employees are trained or experienced, dedicating company resources to such tasks can be considered wasteful. You're diminishing your business capacity and distracting your team with a job outside their skill set instead of focusing on your strong points.
Outsourcing will save you time and get your financials in order sooner. Simply put, leave the accounting to the professionals.
Reason #2. Decreased Costs
If you consider hiring an employee solely for accounting, or you've already done that, notice that outsourcing could save you a significant amount of money.
There are indications that companies hiring accountant agencies save around 40% of the costs compared to those that have in-house accounting.
The calculation is very straightforward – by outsourcing your accounting, the only cost you have is the service price. On the other hand, keeping a full or part-time employee comes with additional expenses, not to mention taking away various resources better spent elsewhere.
Reason #3. Lesser Risk of Fraud
Small and medium-sized companies suffer significant losses due to employee fraud.
Larger businesses have better control over their metrics, with dedicated departments that monitor all transactions. A small business will usually lack this kind of control, which results in a higher risk of fraud.
When you decide to outsource your accounting, your company gains access to an affordable CFO service that will have no problems detecting fraud signs. You can get an objective analysis of the financials as the accountant is entirely independent of your company.
Reason #4. Professional Service
Professional accountants have an obvious advantage in financial dealings - they know accounting. Your business will be in safe hands with using a service that's well-familiar with all relevant codes and laws.
From a technical standpoint, an accounting agency will have every resource necessary to perform the job - from expert employees to the best accounting software. These resources won't be available to your company without additional expenses and hefty time investment.
Finally, a professional accountant could offer you some useful, impartial advice that you couldn't get from anyone other than an expert.
Focus on Business, Not on Accounting
Once the burden of accounting is lifted from your shoulders, you can expect work efficiency to improve in several ways.
Outsourcing your accounting is cost-effective, saves time, and lets you focus on the more important matters where you and your team can be the most productive.