When a bookkeeper or a team of bookkeepers are directly employed by a company for bookkeeping, then it is called in-house bookkeeping services. The employees for bookkeeping are a part of the organization and may be working on-site or work remotely for the company. The bookkeepers handle record-keeping activities and all the financial transactions of the company. Hiring an external service provider or a firm to handle the bookkeeping tasks of the company is called outsourcing bookkeeping services. The external service providers or firms can be individual freelance bookkeepers or even large accounting firms. The external service providers are different from in-house bookkeepers as they function differently and operate as independent contractors.
Difference Between In-House Bookkeeper vs. Outsourcing
The key differences between In-House Bookkeeper vs. Outsourcing are:
|
Particulars |
In-House Bookkeeping Services |
Outsourced Bookkeeping Services |
|
Employment Relationship |
The in-house bookkeepers are direct employees of the company. |
An external firm or entity manages the outsourced bookkeeping. |
|
Supervision and Control |
In in-house bookkeeping, the company is able to get immediate access and direct supervision to the bookkeeper. |
There is less direct control in outsourcing and the entire process of bookkeeping relies on the company’s communication with the external provider. |
|
Cost Structure |
In-house bookkeeping includes salaries, office space, equipment and other benefits provided to the employees. |
Salaries, office space, equipment and other benefits provided to the employees are not included in outsourcing. |
|
Specialization and Expertise |
The in-house bookkeepers may have limited expertise depending on the experience of the individual. |
Outsourced firms have teams of specialized professionals who are experienced. |
|
Scalability |
In-house bookkeeping requires additional staff for scaling up the business. |
Outsourcing Bookkeeping services are easier and depend on business needs. |
Pros and Cons of In-house Bookkeeping Services in USA
Some of the key pros and cons of in-house bookkeeping and accounting services are given below in the table:
|
Particulars |
Pros |
Cons |
|
Supervision and Control |
Hiring an in-house bookkeeper allows direct control, close supervision, and immediate access to company financial data and reports, benefiting both the individual and the company. |
Hiring an in-house bookkeeper involves a comprehensive hiring process that includes benefits, salaries, employment costs, equipment, space, and software. |
|
Consistency |
Bookkeepers' consistency in handling business-related issues during business hours is beneficial as they are familiar with specific company details and practices. |
The risk of turnover in bookkeeping is high, and sudden absences or sudden job changes can lead to continuity issues. |
|
Integration |
Hiring an in-house bookkeeper facilitates team integration, enhances understanding of company goals and culture, and manages administrative tasks beyond bookkeeping. |
In-house bookkeepers may lack expertise in specialized tasks and complex areas, and may not be beneficial if they have limited experience or have worked with few companies. |
|
Confidentiality |
The bookkeepers help the business to develop enhanced control and confidentiality of the sensitive information about the company including finances. |
Confidentiality is a little bit at risk as the entire key information will be shared with the third party. |
Pros and Cons of Outsourcing Bookkeeping Services in USA
Some of the key pros and cons of outsourcing bookkeeping and accounting services in USA:
|
Particulars |
Pros |
Cons |
|
Cost Efficiency |
Outsourcing bookkeeping is typically cost-effective, as it only requires the services needed, without additional benefits like office space, equipment, or insurance. |
Dependency on outsourcing can lead to increased reliability and performance issues, impacting company bookkeeping and operations if challenges arise during the outsourcing firm's operations. |
|
Specialization and Expertise |
An outsource for bookkeeping provides businesses with access to experienced, specialized experts, ensuring regular updates on the latest technologies, regulations, and best practices. |
Having outsourced bookkeeping leads to less direct control on the process of bookkeeping and timing. This also leads to delayed response time and affects communication. |
|
Scalability Outsourcing bookkeeping services | simplifies service scaling, allowing businesses to manage peak periods without hiring additional staff. |
Outsourcing bookkeeping can expose a company to potential data breaches and misuse of sensitive information, necessitating trust in the outsourcing firm's security protocols. |
|
Reduced Risk |
Outsourced bookkeeping services guarantee continuity, reduce turnover risk, and ensure accurate completion of tasks on time, thereby reducing errors and errors. |
Outsource bookkeeping may not always understand business nuances and specific needs, leading to difficulties in integration with existing processes and systems. |
Conclusion
In-house bookkeeping services and outsourcing are different from each other and depend on factors like budget, size of business, complexity of financial needs and control preferences. Both of them are beneficial in different aspects. The decision whether to outsource or hire an in-house bookkeeper for bookkeeping and accounting services depends on various factors like the specific needs of the company, their budget and the priority of the business. Those companies looking for expertise, cost efficiency and scalability can opt for outsourcing whereas those who require consistency, prioritizing control and integration lean towards in-house bookkeeping.
