Choosing the optimal model to fulfill accounting functions is a unique and individual decision even for companies in the same industry. To make this decision, management considers the characteristics of their particular business as well as previous experience with outsourcers or internal specialists. You will find below the most important questions which should be addressed before making this choice.
We recommend considering not only direct costs as in addition to payroll, bonuses, sick leave and vacation pay, companies also pay for rent, office supplies, furniture, staff training and certification, administrative costs and, unfortunately, sometimes fines. Moreover, in some cases, fines can exceed the amount of all the aforementioned expenses put together. In other words, it is not entirely correct to compare the cost of outsourcing services with the cost of running an accounting department.
“Human factor” risks can be minimized by putting in place internal procedures, drawing up security policies, or applying other similar methods. Not every business is ready to invest in such administrative tasks, and in-house accountants with extensive knowledge of accounting and tax accounting can sometimes do much harm to their own company. This is where outsourcing companies have and confer a certain edge as their employees have to sign confidentiality agreements and their work is monitored at each stage of interaction with clients. Large outsourcing companies take information security very seriously. Processes are arranged so that the risk of information leakage becomes negligible. When considering these first two questions, it is necessary to determine what tasks you would like your company to handle at the end of the day and whether your company has sufficient internal resources to maintain secondary functions on its own.
We recommend looking into internal accounting processes to determine whether accounting functions should be outsourced or kept in-house. Raising this question will be a useful thing to do in any case. If you choose in-house accounting, then all the actions performed by your colleagues should be closely monitored, and checks and meetings should be held regularly regardless of your company’s type of business. If you opt for outsourcing, then it is important to clearly specify all the tasks that will be outsourced and constantly liaise with the selected outsourcer. Outsourcing is a joint and critical activity in which both parties should participate while the routine part is performed by the outsourcer.
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