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.