Should You Outsource Accounting Services or Hire A Full-Time Accountant?

Should you outsource accounting services? Or should you hire a full-time accountant instead?

Maybe you’re a startup company looking for the cost-benefit solution.

Maybe you have been doing the accounting on your own but it starts to become overwhelming as your company grows larger.

Maybe you just want to delegate the accounting so you can have more time on your own.

Maybe you want a professional qualified accountant to prepare an accurate account so you can better monitor your financial performance.

Either way, outsourced or in-house is a common decision most entrepreneurs and business owners have to make. And there is no easy answer especially for those start-up and small companies.

Why?

Simply because these companies have not much work to do. So it isn't worth paying a full-time salary just to see the accountant sitting there scrolling the phone. Or, they simply couldn’t afford to hire one. What’s the point of hiring someone receiving a higher salary than you as the business owner, right?

Now the answer might seem obvious. But before reaching a conclusion, there are several things that need to be taken into consideration.

1. Outsourced Accounting Services Is More Cost-Effective

According to one of the Big 4 firms Deloitte, cost savings is the primary driver to outsource.

Let me explain.

The salary for a fresh graduate accountant starts at a minimum of RM2,300 - RM2,800. But the fresh graduate is expecting a minimum starting salary of RM3,000 - RM3,500. This could be a big expense to the small companies. It costs you at least RM36,000 a year. Not to mention the bonus or any other allowance, incentive and benefit yet.

On the other hand, outsourced accounting services could go as low as RM297 a month. It’s only 10% of the fresh graduate’s salary but with more experience.

How could it be that low? It’s because an accounting firm doesn’t only serve one company. Unlike full-time staff, it doesn’t depend on you to make a living.

In fact, CP Leong & Co as an accounting firm in KL doesn’t charge more than RM3,000 per month for their accounting services in KL and Selangor area. And the RM3,000 per month pricing is only for those companies with annual revenue of more than RM 10 million. So you could save a lot more by outsourcing accounting services than hiring a full-time accountant.

2. Outsourced Accounting Services Produce A More Accurate Account For You

As you can see, if you choose to hire a full-time staff, with RM3,000 you’re only getting a fresh graduate or someone who is not a chartered accountant. That means it’s hard for you to get a good quality financial account. This could affect your financial decision badly. For example, the accounting profit is overstated which leads you to spend more.

Besides, the accounting standards and regulations are changing. For example, the government introduced GST and then SST and now it may be going back to GST again. It could cost you a fortune to send your staff to attend seminars or training to keep their knowledge up to date. Not to mention that they might resign afterward.

However, a good accounting firm will have up to date industry knowledge so it can retain clients at the same time attracting more clients. And there will be at least one chartered accountant to maintain the quality of work.

Why?

Because only a MIA chartered accountant can open an accounting firm. So even if the accountant who is handling your account is new, his work will be reviewed by the experienced chartered accountant.

This is the quality control that you can’t get by hiring in-house.

And that also means you’re getting a chartered accountant’s brain at just a fraction of a full-time salary.

For those who don’t know, CP Leong & Co is a MIA registered accounting firm in KL who provides accounting services in KL & Selangor area.

So, we have just talked about the benefits of outsourced accounting services. Now, let’s talk about the downside.

3. You Have Less Control Over Outsourced Accounting Services

Everything has a downside. The main disadvantage of outsourced accounting services is less control. You can’t keep track of your financial account every single day. And you can’t ask about every single financial event that takes place. But you will be able to get weekly or monthly updates and reports. You can call the person in charge occasionally if you have an important financial decision to make.

For some business owners, they might not be comfortable handing over the control of the books. But sometimes this can be solved easily by discussing it with the accounting firm. For example, CP Leong & Co as an accounting firm in Malaysia offers to allocate its staff to prepare accounts at your office. So the books will not leave your place.

However, this is only restricted to businesses that subscribe to its accounting services in KL & Selangor area only.

4. Unlike In-House Employee, Outsourced Accounting Services Is Not Local

Similar to what we discussed above, you have better control over your in-house employee. He can answer your questions immediately. And you can order your staff to do something other than accounting if you wish.

It’s difficult for the outsourced accounting services to do the same. This is the limitation of not being in the same office. However, you could still get answers by phone call. Just not as convenient as by asking face-to-face.

Conclusion

Everyone has different preferences. Maybe money is not an issue for you and you prefer to have better control by having in-house employees. But if you would like to get a professional and accurate financial account at a lower cost, using outsourced accounting services is the best option.

CP Leong & Co is an accounting firm in KL that offers low-cost accounting services in KL and Selangor area. Its accounting service ranges from RM297 per month to RM3,000 per month.

CP Leong & Co has a group of professional accountants (ACCA & ICAEW). They have helped more than 257 businesses to achieve the peace of mind and efficiency they needed to succeed. And the number is still growing.

If this is what you’re looking for, you could contact us to learn more.