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When it comes to managing the finances of a business, there are a number of options to consider. If you’re a smaller business or just starting out, it is possible to handle the finances yourself with the aid of apps and websites. However, as you grow a little more, you might be faced with deciding whether or not it’s time to employ an in-house accountant (or team of accountants!).
Employing an in-house accountant has pros and cons, and it is important to understand them in order to make an informed decision on what is best for your business.
Having an in-house accountant allows for a great deal more control and flexibility than an outsourced team. Businesses can work directly with their accountant to develop financial strategies and plans that align with their overall goals.
An in-house accountant can also be more accessible and responsive to the needs of the business, and can adapt their services to meet those needs. They can be told straight away if there are issues or new developments, or if budgets need updating.
Communication with other employees and departments is also easier with in-house accountants. Data can be exchanged quickly and directly, and financial decisions that other departments make can be discussed and managed more easily.
Another great advantage of employing an in-house accountant is that they have a better understanding of the unique financial needs of the business. They will have knowledge of the company’s specific accounting software and systems, as well as comprehending the company's financial history and current situation.
This can be particularly beneficial when it comes to evaluating the financial performance of the business and identifying areas where improvements can be made.
Another benefit of hiring an in-house accountant is that all of their working time is dedicated to the business. As a result, they can provide more immediate support and assistance. This can be particularly valuable during busy periods, such as tax season or when preparing for an important financial meeting or presentation.
An in-house accountant can also be available to answer any questions or concerns that may arise throughout the year, rather than having to wait for a response from an outsourced accounting firm.
Despite all the benefits that an in-house accountant brings, there are also some downsides to employing one.
Often the most significant disadvantage is the cost of hiring and maintaining an in-house accountant, particularly for small businesses. All the expenses associated with hiring an in-house accountant can add up quickly.
For example, when outsourcing, you pay a flat rate for the work accomplished. However, with an in-house accountant, you pay them a consistent salary but also need to include the cost of benefits and office equipment they need.
It is important to evaluate how much your business would spend on in-house accountancy compared with outsourcing financial services. There will likely be a point where it becomes more cost-effective for your business to employ an accountant, or even a team, in-house.
Next, in-house accountants may not have the same access to the latest accounting regulations and laws compared with accountancy firms. Professional accountancy firms usually have allocated hours and employees specifically for staying up to date with changes. An in-house employee may not be able to dedicate the same amount of time to this.
Professional accounting firms may also have a team of accountants with a diverse range of experience, and can provide specialised services such as tax planning, financial forecasting, and risk management. It is unlikely that an individual accountant will be specialised in all of these areas.
When hiring someone in-house, it takes to interview, hire, train, educate and manage an employee. It is estimated that this whole process could take around 90 days.
In particular, managing an employee is a large responsibility. It requires regular check-ins, 1:1s, maintenance of company values, etc. Therefore, this can become time consuming, especially in the short-term.
Ultimately, the decision to employ an in-house accountant will depend on the specific needs of the business.
Businesses that require a high level of support, or that handle a significant amount of financial transactions, may find that an in-house accountant is the best option. However, outsourcing the task to a professional accounting firm may be more cost-effective and efficient for businesses with simple financial needs.
Whether you choose to stay in-house or use external services, you need to carefully consider the business's financial needs, budget, and future goals. By taking the time to carefully weigh the pros and cons of each option, business owners can make an informed decision that will best support the long-term success of their company.
At Fintech, we can support you and your business as you seek to hire for accountancy and finance positions. Get in touch with us today and we can work to match you with the right candidate for your business requirements!
