In-House vs. Outsourcing in the Time of Automated Accounting

As bookkeeping innovations evolve, they allow firms worldwide to evolve, encouraging them to offer more comprehensive and profitable services for their clients, while getting their staff out of the drudgery of day-to-day grunt work. In many ways, this has allowed the benefits to go well beyond pricing, and, as Forbes’ Hitendra Patil suggests, it’s become a matter of “creating a reliable growth engine.” 

Naturally, outsourcing requires research into your options and thorough preparation to ensure that all of its benefits match your existing infrastructure for a more seamless transition. Do they use the same technology? Do they have the same principles? Do they like long walks on the beach and deep conversations?

• Expertise: When you outsource bookkeeping, your partner company can guarantee workflow knowledge. They can assign the right people for your tasks and take all the training and education off your plate.

• Technology: Firms and service providers everywhere have taken advantage of the fact that accounting and bookkeeping tools have become more available to a wider audience. This can reduce friction in terms of training your new partner or merging different technologies.

• Reduced Fraud and Conflicts of Interest: More eyes on the books means less likelihood of mistakes or malfeasance. While you can’t completely remove the risk of error or fraud, engaging a different team to oversee the work can be more effective than using the same exhausted crew.

• Scalability: Sharing and mobilizing the workload allows firms to bring in new clients and explore new services.

• No Turnover and Reduced Onboarding: No changes in your core team means more stable transitions. Though you will need some onboarding, it can focus only on your clients’ specific needs, not the company structure.

Challenges in Outsourcing

Outsourced bookkeeping services are not for every firm; they can be a better fit for bigger players who can shoulder the costs and complications. But maybe you like complications, we won’t judge.

• Less Control: Though the outsourced accounting firm will presumably function well and in accordance with your agreements, you will nonetheless have less control over your clients’ data and how their books are handled. Naturally, you can schedule repeated calls with your account management team, but you’ll have to become used to limited control on a daily basis. And really, if you have to be talking to them constantly to check up on them, you’re defeating the purpose of outsourcing the work.

• Hidden Costs: Here’s where the research really shines. The wrong choice of service provider may have surprise fees. Hourly rates may fluctuate, and fixed rates may not be prepared to provide consistent services for variable needs, especially on credit-based retainers. We suggest carefully detailing and reviewing all outsourcing contracts. Legal charges and transition costs should also be factored into your research.

• Long-Distance Relationships: The right choice in outsourcing will probably have strong communication efficiency skills and systems, but even the most consistent weekly calls will fall short of going directly to the team’s office for a conversation. 

• Too Steady: Many companies will stick to the established workflow without offering any kind of improvement. This last one can be a pro, depending on what you need.

Benefits of Keeping It In-House

Having a strong in-house team is a surefire way to ensure control over each client’s books and needs. It’s also the only way to build a bowling league team in your area.

• Always There (from 9–5 (ish)): Perhaps the most obvious pro of having an in-house team is that you can always discuss any concerns in a client’s books directly. It’s immediate access whenever you need it — within reason, okay?

• Part of the Culture: An in-house team is familiar with your business, its structure, and the culture. They understand your team’s needs and limitations and can be a source of insight for your firm.

• Part of the Growth: As in-house teams learn to handle your clients, they also grow their talents and potential services. They learn to use the tools and handle increasingly complex tasks and challenges, improving your firm overall.

• Client-Facing: Regardless of how you go about your business, few things convey trust as well as a team that is present and ready to communicate with clients whenever they need it.

Challenges Relating to In-House Teams

• Costs: Salaries, healthcare, retirement contributions, time off, toys they’ll ignore and play with the box instead — though they bring many benefits to your firm, hiring new accountants can be costly. 

• Training: As you build a team of accountants, you’ll likely have to train your incoming staff to bring them up to speed. Flexibility and new talents may take some time to develop, too.

• Potential Turnover: As with any hiring process, you have to come to terms with the fact that a trusted employee in your in-house team may leave for any reason.