Outsourced Accountant Vs. In-House Accountant

Possibly you have heard that it is cost effective to hire an outsourced accountant but you are still in doubt whether it is actually cost effective or not. In-house and outsourced services offer different workflows when managing the bookkeeping and accounting for your company. While we understand that outsourced bookkeeping and accounting is not right for every business, if it does fit your business’s needs, it can often cost less and provide more expertise than a traditional in-house accounting department The table below attempts to show you clearly some of the areas where it can be more beneficial to engage outsourced accountant than in-house accountant. From the table, you will agree with me that overhead costs incurred on an in-house accountant add an additional 30% on top of an employee’s base salary.

 

In-house Accountant

Outsourced Accountant

Management time

Extensive monitoring time

Monitoring cost is minimized

Quality

If you don’t hire a competent and well experienced accountant (which are usually very demanding and costly), reports and other critical financial information may be inaccurate and incomplete, which impacts business decision.

Outsourced accountant is well grounded and exposed to different accounting system of various organizations. He also works in a team. This impacts the quality of his works.

 

Software

The company needs to buy accounting software for the accountant to use.

You don’t need to buy accounting software. Outsourced accounting firms have software the use to keep their cleints’ accounting records

Growth

Hard to catch up with the pace of fast expansion

Standard policies and procedures to support the rapid growth of business

Costs

HR costs is high, some of the costs that should be taken account of in determining include:

·Recruitment fees (advertising, agency)

·Opportunity cost of time spent interviewing potential new candidates

·Training

·Cost of a desk (provision of desk, computer, rent, software, administration, stationery, etc)

·Redundancy payments

·Temp staff while employee is on leave

·Subscriptions specific to employees

·Social welfare and pension for employees

·Medical costs

Only payment of service fee

Risk

Relatively high fraud and non compliance risk especially when the company cannot afford to employ enough hands that will ensure division of duties. When you have just one or two employees handling your books, your company has a higher risk of fraud. The person paying the bills might be the one reconciling the bank account, and because there isn’t separation of duties, you have just given them the keys to the bank.  They can steal from you and cover their tracks. And you won’t find out until it’s too late.

Low fraud risk, compliance with statutory requirements is achieved.Outsourcing helps reduce the risk of fraud associated with your business’s accounting because there are separation of duties and more rigorous steps taken when providing financial statements for the business.

 

 OTN Consulting is a firm of chartered accountants pioneering accounting outsourcing in Nigeria.  We help our clients succeed by providing expert, timely and dependable accounting services and financial insight. Outsourcing your accounting needs to our firm allows you to achieve cost savings through reduced need for internal bookkeeping staff, helps you make informed business decisions and gives you time to focus on your core business.                                  

Contact us for more information:

Tel: 2348024768668; 08155554892 

Websitehttp://www.otnconsultinglimited.comemail: This email address is being protected from spambots. You need JavaScript enabled to view it.

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