The accounting arm of your business is just as crucial to success as your sales team. Without an accurate financial history, it’s difficult to predict how long into the future your business will be around! Therefore, it is of the utmost importance that you have a good bookkeeper and accountant on your side. But is it better to outsource your accounting or hire someone in-house? Let’s take a look at the pros and cons.
Hiring in-house is the most traditional way of building a team. This person will be right down the hall from you and at the ready for whatever you may need.
Pros of in-house
- Your accountant will know the ins and outs of how your business operates.
- Just from spending time with them daily, you’ll learn about their skills and strengths – and thereby be able to use those to your advantage.
Cons of in-house
- You have to make sure that this person fits in with your company culture.
- If your accountant makes a mistake, your business is liable for it.
- Accountants can be very expensive. You have to pay them not only a salary, but also health insurance, 401k, and other costly expenses.
- You could be fearful that the accountant is doing something you wouldn’t want them doing… much like the Jerry Seinfeld episode where Jerry thinks his accountant is on drugs… (watch video)
Utilizing virtual freelancers has become a popular solution for small businesses, startups and even large enterprises. Outsourced finance professionals can bring a lot to the table.
Pros of virtual
- Most small businesses don’t have enough work to require a full-time bookkeeper, accountant, or analyst so part-time and virtual is the way to go.
- You can hire somebody to fill any need – this is the beauty of the on-demand economy!
- You can more easily find and work with an accountant with the domain expertise you need.
- You can regulate their workload to reflect the seasonality of your business instead of paying somebody the same amount year-round.
Cons of virtual
- If you’ve yet to go fully digital, working with a paper trail may become more complicated until everything has been uploaded to the cloud.
- It may be harder to get in touch with your accountant if they aren’t in the same building as you.
Alternatively, some businesses choose to have a hybrid solution; they’ll hire somebody in-house, but that person will also have a virtual counterpart. The in-house employee will take care of invoicing, while their virtual help will classify transactions in order to reconcile monthly statements. Usually, the virtual help will a) do the lower pay grade work (such as bookkeeping if there is an in-house accountant) and b) act as a second set of eyes on larger projects that, if done incorrectly, can have very negative consequences.