Are you wondering whether to manage your business finances in house or outsource it to an offshore accounting firm? This is an essential decision for your business' financial health & development in the future. Each approach has challenges and advantages, particularly regarding efficiency and cost.
This article compares in house accounting to offshore accounting services and also examines what matters most to U.S. companies: cost savings, access to expertise & operational efficiency. At the end, you will be better aware which option could fit your business best.
What Are In-House Accounting & Offshore Accounting Services?
Let us first understand the two in detail:
In-House Accounting
If you employ an in house accounting staff, you hire an accountant that is working for you directly. These employees handle daily monetary tasks like accounting, payroll and tax preparation. Having an internal team gives you instant access to the financial details and complete control of the way the accounting procedures match your company objectives.
But in-house accounting is costly. Other costs beyond salaries include benefits, training along with other operational costs. For smaller sized businesses, those costs might be more expensive compared to the advantages.
Offshore Accounting Services
Offshore accounting solutions, also called outsourced accounting services, have external specialists or firms working on your accounting for you. Companies usually make use of this to save money and get specific skills. Offshore teams also bring flexibility, so you are able to scale services up or down.
For many U.S.-based companies, offshore accounting services represent a low cost choice without sacrificing quality.
Comparison of Costs: In-House vs Offshore Accounting
Here is a cost comparison between the two:
In-house Costs
Running an in-house accounting team could be costly. You're responsible for:
- Salaries: Accountants in the United States average USD 70,000 annually and senior level experts make more.
- Benefits: Health insurance, retirement plans and paid time off total roughly 30% of an employee's compensation.
- Overhead: Office space, equipment, and software licenses add costs.
- Training & Turnover: Accounting regulations and software are always changing and call for ongoing employee training. In case an accountant departs, recruiting and training replacements takes time and money.
Offshore Accounting Costs
Offshore accounting services clearly demonstrate the cost savings:
- Lower Salaries: Offshore professionals usually charge lower rates in case they operate in cheaper countries like India or the Philippines.
- No Benefits/Overhead: Because these accountants work independently or through a firm, you don't provide benefits or office space.
- The Pay-As-You-Go Model: Most offshore providers charge per use so it is an affordable choice for businesses with changing needs.
Small to medium sized companies frequently find outsourcing their accounting projects offshore to lower costs by up to 50% on average.
Efficiency Comparison: In-House vs Offshore Accounting
Here is an efficiency comparison between the two:
In-house Accounting Efficiency
With an in-house team, you have access to your accountants immediately. This might help with urgent financial tasks or align accounting methods with your overall business objectives. However, efficiency is restricted by :
- Skill Gaps: Employing an in house team means you get stuck with local talent. In case your team lacks specialty skills, you might face challenges with complex tasks like global tax compliance.
- Capacity Problems: In hectic seasons, like year end financial reporting, in-house teams might struggle to handle the load.
Offshore Accounting Efficiency
Offshore accounting services are aimed at efficiency with the following:
- Expertise on Demand: Offshore providers usually have big teams of experts with various backgrounds to attend to your financial needs quickly.
- Scalability: Need additional help with taxes this season? Offshore teams can scale up fast without recruitment.
- Focus on Main Business: Delegating accounting tasks lets your internal team concentrate on growing your company instead of on paperwork.
Most U.S. businesses obtain much more precise financial reporting by outsourcing accounting services.
Making the Right Decision
Selecting in-house accounting vs offshore accounting services ultimately comes down to your business. In case savings in costs, flexibility and access to knowledge are top priorities, outsourcing your accounting tasks offshore could be the answer. It allows you to do what you do best - operating your business, and leave the numbers to the experts.
Read Also | Outsourced vs. In-House Accounting: Which is Right for Your USA Business?
Final Thoughts
In the US, having accurate finances is essential. Offshore accounting services give U.S. companies a low cost, flexible means to manage financial tasks while not losing control or quality. Outsourcing your accounting needs provides you with a chance to access a worldwide pool of professionals to help simplify your operations and boost your profits.
In case you wish to explore offshore accounting services, find professionals that understand your requirements. The Fino Partners are here to assist you to get started on better financial management. Call us today to learn more!
