For a business, accounting is almost always never optional. There must be someone managing finances, especially in instances where the company is still growing, or when a high number of transactions occur every day. Small to medium-sized businesses frequently ask themselves if an accountant is necessary or if they can handle it by themselves to save money, but eventually, they find that it is indeed necessary for someone to perform their accounting, so they can focus on growing their business.
Nowadays, business owners in London are no longer asking whether an accountant is necessary; instead, the question nowadays is whether to hire one or to outsource the accounting. Thanks to advancements in both technology and in skills and methodologies, it’s now possible to outsource to a firm of accountants Central London offers instead of hiring one. But which option is better? Let us analyse in terms of the three most important factors when making a hiring decision: experience, employee lifecycle, and cost.
A well-seasoned accountant can bring much to the table upon hiring. He or she can go beyond simply bookkeeping and preparing taxes; depending on the extent of experience they can become trusted advisors who can perform valuations, forecasting, budgeting, and even take care of personal finance. The downside is the person’s experience may be limited to only one or a few industries, so the accountant may not be able to experiment with practices from outside his or her industry that might be able to improve the company. Additionally, if work is heavy, there is only one person bearing the load. On the other hand, outsourcing to an accounting firm means you’d be working with a team from varied backgrounds, and since they are a team you would never have to worry about a single accountant becoming swamped with work.
Good employees stay in good companies. Employees are more motivated to work through factors like work environment, pay, opportunities to grow, or a combination of all factors. Once one of these disappears, the employee may start looking for greener grass. This spells trouble for the company as they would have to spend time either looking for a replacement who is just as competent or to train someone to match the skill level of the one who just left. Outsourcing to an accounting firm ensures that this scenario will never happen, because there will always be accountants at the ready, and only a total closure of the firm would lead to a similar result.
While most companies think that they can pay an employee less than what they would pay an accounting firm monthly, the truth is that there are several other costs of keeping an employee that build up and amount to a much larger expense compared to outsourcing, like health benefits, bonuses, and paid leave. With an accounting firm, the company only needs to pay a fixed fee, and they may terminate their partnership at any time, allowing for greater flexibility.