Let’s first understand the importance of accounting before we delve into the specifics of the choices that any business has.
Whenever anyone ventures out to start any business, there are three common reasons:
- a) Make profits
- b) Grow to a global level
- c) Give back to society by way of employment & revenue by way of taxes & duties
In all the above three reasons, a business is helped by accounting to not only know where the business stands vis-à-vis the goals, but also helps the business in taking measures to achieve the goals faster & in a better way.
But how does Accounting do this?
- a) By making sure that all the transactions that the business is entering into is recorded in a timely manner
- b) Ensuring that all such transactions are grouped under the correct account heads
- c) Ensuring that the profit & loss account and the balance sheet along with other reports like the Cash Flow Statement, Funds Flow Statement, Debtors Aging report are prepared in a timely manner & presented to the owner for taking the right actions.
Given the importance accounting has on business, it is natural that businesses the world over consider accountants very critical. Probably that is the reason why a CFO goes hand in hand with the CEO of a company.
Now that we have understood the importance of accounting and accountants, let us now understand the differences between an in-house accountant and an outsourced accountant.
An in-house accountant means a business hires an accountant as full time employee to keep its books and manage the finances.
The benefits attached to having an in-house accountant are:
- (i) In-house accountant is a person from the same region as the business and thus understands the business and its environment better. This can be beneficial when the accountant has to analyze the conditions affecting the business.
- (ii) An in-house accountant may be called on to extend a helping hand in areas other than accounting whenever there is a requirement of the business.
An outsourcing accountant is a person not under the employment of the business and has a contractual relationship with the business to provide accounting services. An outsourced accountant can be in the same country as the business is in or may be in a foreign country.
The benefits associated with outsourced accountant are:
- (i) Since an outsourcing accounting firm is a professional service provider, it would have highly skilled experts at its disposal who can be of immense help to a business as they can add tremendous value to accounting.
- (ii) Unlike in-house accountants, a business does not have to bear with leaves since outsourced service provider will have someone to back up the person who would be working for the business’s accounts when that person takes leave.
- (iii) Many outsourced accounting providers serve clients in different countries, so they have people available 24/7. A business cannot ask an in-house accountant to be available 24/7.
- (iv) If the outsourced accountant is in a different country, there can be a couple of additional benefits like:
a. Due to the difference in time zone, people in India work when it is night at US. So, work can be done overnight by an accountant in India.
b. Due to the foreign exchange difference, the Indian accountant can provide services at costs much lesser than the costs incurred on in-house accountant.
Thus the benefits of an outsourcing accounting provider are far more than the benefits in having an in-house accountant.
If you need a Dublin based accountant to look after your accounting, bookkeeping, management accounts or other financial related business needs. Then click here now to call us here at Kilcoyne Accountants for a discussion regarding your requirements.