Advantages And Disadvantages Of Outsourcing Accounting Needs

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By Adrian Cruce

It does not really matter what industry you are operating in since it is a guarantee that you have to deal with accounting. There are businesses that want to hire in-house accountants or set up an entire accounting department. This choice is usually based on company size. The firms that are smaller will usually opt for outsourcing accounting needs.

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As with every business decision you would make, it is obvious that there are advantages and disadvantages that are associated with such an outsourcing choice. It is important that you take both into account in order to make the best possible decision.

Outsourcing Accounting Needs Advantages

The very first advantage that has to be taken into account is associated with financial savings. When you work with a provider, you do save money as opposed to having full time employees. That is mainly because of avoiding the regular employee expenses like insurance, paid time-off, payroll taxes and so on. At the same time, no work space has to be provided.

Managing in-house accounting departments takes time. That time can be eliminated when outsourcing. That means that you can remain focused on the tasks that actually generate an income instead of having to deal with managing an extra company department.

It has to be understood that the third party providers do specialize in the services that are offered. This basically means that the accountants that work for you through an outsourcing deal will offer a really good quality in the work that they offer since they are specialized, sometimes even knowing a lot about the industry that you operate in.

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Outsourcing Accounting Needs Disadvantages

Although the benefits associated with outsourcing bookkeeping, there are still many companies that will want to keep this in-house, because of the disadvantages that appear. The truth is that it does not matter how great the chosen service provider is when you need access to really fast records and communication. Challenges and needs are communicated across a distance, sometimes forcing you to deal with a time zone difference.

When you choose the service provider, you might also be faced with language barriers. We all know about the language problems that are associated with the call centers that use outsourced services. Language barriers can also translate to working with an offshore accounting firm. You have to explain company structure and processes. Misunderstandings can lead to legal problems.

Outsourcing accounting automatically means that you have less control over the process. Managing in-house employees does offer complete control. Service providers do always try to train staff properly, based on the preferences that you have but there is always the chance that some information will not be transmitted.

The last disadvantage that we have to highlight is security. Business accounting is highly sensitive. The information that is offered and transmitted is really important. Working with a provider can automatically mean that security risks can appear.


As you can see, advantages and disadvantages do exist. It is very important that you always have the necessary patience to analyze them both. There are cases in which this is great for you and situations in which you will have to set up an in-house accounting department.

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