In-House Accounting Vs. Outsourcing

Posted on December 15, 2020Categories Finance   Leave a comment on In-House Accounting Vs. Outsourcing

In-House Accounting Vs. OutsourcingThe primary difference between the two is that In-House Accountants provide accounting services to the company to an outsourcing accountant provides all accounting services through a third party. This is not only expensive for the company but can also be detrimental for the accountant. For example, if a client finds out that your company is outsourcing its accounting services, they may find a reason to sue you. They will argue that your company is not paying you enough and you should be compensated for the work that you have done. In-House accountants on the other hand cannot do anything about this since they are employed by the company and cannot sue them or their employer.

In-House Accounting Vs. Outsourcing

Another problem with In-House accounting is that it may leave your company’s assets/income in a bad situation if the accountant forgets to file the financial records. For example, if your company is making profits, the accounts payable may not be sufficient to cover the salaries of the employees, incur costs and so on. Therefore, a lot of resources can go to waste if the accountant fails to file all the documents required by the law. In addition, many difficulties can arise when outsourcing accounting. For example, you are in a foreign country and your accountant fails to file the books in your native language. You may be forced to pay huge sums of money for translating your books.

All these reasons make outsourcing a more attractive option than In-House accounting. Apart from all these disadvantages however, it has been observed that most companies tend to retain the services of an In-House accountant after the initial work is completed. This is because once the company grows large and needs lots of work done, it does not make sense to hire another professional as the first one would have done the work for them and they would definitely charge more than the ones that have worked previously for them.