As growing businesses are faced with the task of equipping leadership with the tools necessary to make informed financial decisions, it becomes imperative that an appropriate accounting solution be in place. While historically, companies have elected to address these finance and accounting roles by hiring and retaining full-time in-house team members, the emergence of the outsourced accounting model has proven to offer a distinct alternative with several potential advantages. 

Each business faces unique circumstances when determining whether to hire internally or outsource its accounting function. However, understanding the key advantages of outsourced accounting is essential for identifying the most effective solution. 

There are a number of core factors to consider when deciding between in-house accounting and an outsourced accounting solution. 

EMPLOYMENT COSTS 

Hiring full-time internal staff is often a time intensive process that requires added costs associated with employing and maintaining in-house accountants. Beyond base compensation, businesses have a responsibility to meet standard employment considerations including payroll taxes, health benefits, PTO and retirement plans. In addition, maintaining internal accounting staff requires the added time obligations necessary to manage team member workloads and responsibilities. 

Conversely, outsourced accounting is uniquely positioned to offer clients a dedicated multi-person team of professionals while eliminating the added overhead costs associated with internal staffing. This solution alleviates the burden of searching for top talent along with removing the time demands of managing an additional full-time employee. Clients can then focus on the operations of their business while fully confident in the state of their accounting operations. 

INTERNAL CONTROLS 

The accounting department of most small-to-medium sized businesses is typically encompassed of one to two team members operating with minimal process oversight. Unfortunately, the reality of this scenario is with limited internal controls comes the increased potential for fraud and other risk-related activities. 

With outsourced accounting, client exposure and risk potential are limited through the implementation of quality control measures such as clearly defined segregation of duties, a multi-layered approach to process oversights and comprehensive financial statement reviews to ensure the accuracy and integrity of all client financial data. 

KNOWLEDGE/SCALABILITY 

The reality of growth when related to the accounting function is that as businesses grow, their internal accounting methods tend to become more expansive, more sophisticated and more labor intensive to meet their changing needs. When businesses elect to staff internally, this means hiring and training accounting staff becomes a higher priority as responsibilities must be allocated to meet the needs of an evolving workflow. Additionally, the potential for employee turnover is an ever- looming risk with significant ramifications should an experienced team member elect to leave. 

However, outsourced accounting maintains the flexibility to scale services based on changing business needs while presenting clients a unique level of stability within their accounting. With a team of highly knowledgeable and experienced accounting professionals with diverse industry expertise, the scope of responsibilities can seamlessly be adapted to meet client growth patterns while eliminating most training needs. 

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As businesses grow, maintaining accurate financial reporting, implementing efficient processes and managing scalability become increasingly complex. Ensuring strong financial oversight while adapting to changing needs requires the right accounting support. GHJ’s Client Accounting and Advisory Services (CAAS) Practice provides businesses with experienced professionals who help streamline accounting functions, enhance internal controls and deliver valuable financial insights. Contact GHJ to explore how outsourced accounting can support business growth and operational efficiency.