All businesses require an accountant, or someone to look after the books. The only decision that a business owner has to make in this regard is whether to employ a full time accountant or to outsource this function.

The needs and resources of your business plays a role in this decision. For example, a big corporation might be better off using an in-house finance team, while a small business can benefit greatly from outsourced accounting.

Let’s explore the pros and the cons of both options:

Full time employee

The Pros The Cons
Full time presence on site Recruitment fees
You may allocate additional job specs without having to alter their contract Will take leave (possibly maternity leave)
May randomly ask for increase due to personal reasons
Employee means payroll duties
Possible CCMA action if fired
Must buy accounting software
Succession planning required
Generally can’t sign off on financial statements
Most expensive option

Outsourcing to an accounting firm

The Pros The Cons
No employer-employee relationship No physical presence on site
No recruitment fees Additional job specs usually means increased fees
No payroll duties
Specialist knowledge in one package
No accounting software needs to be purchased
No downtime in terms of leave
May sign off financial statements
Succession planning not required
Usually month-to-month contract
No random fee increase requests
Most value-for-money option

 

Businesses would have to determine what their finance and accounting needs are, keeping in mind the following:

  • their budget;
  • their own knowledge of running the finances;
  • their time to do so; and
  • their technological requirements/preferences.

Once you know what you need in your finance side of things, then you can decide what you want.

Love tech? Don’t like to supervise? Not a big fan of admin? Then outsourced accounting is for you.

If you don’t mind spending a bit more on your accounting department, and prefer face-time then a competent accountant will take care of all your finances beautifully.