When it comes to managing your business finances, hiring an accountant is one of the most important decisions you’ll make.
A good accountant can save you money, keep you compliant with tax regulations, and provide valuable financial insights.
But here’s the big question: Should you hire an in-house accountant or work with an outsourced firm?
Each option has good and bad, but in this blog, we’ll talk you through the differences.
Understanding Your Accounting Needs
Before getting into the pros and cons of each option, you need to ask yourself what your business actually needs from an accountant. For example:
- Do you need full-time financial support or occasional expertise?
- How complex are your tax obligations and bookkeeping requirements?
- What’s your budget for accounting services?
- Do you need strategic financial guidance and advice, or just compliance and bookkeeping?
Your answers to these questions will help you determine whether hiring an accountant in-house or outsourcing is the right fit.
The Case for Hiring an In-House Accountant
An in-house accountant is a permanent employee who works exclusively for your business. This can be an attractive option for companies that need daily financial management and strategic advice.
Pros of Hiring an In-House Accountant
✅ Immediate availability – Your accountant is always on hand to answer queries and make financial adjustments in real-time.
✅ Business familiarity – In time, they will have an in-depth understanding of your company’s financials, industry, and specific needs.
✅ Hands-on control – You have direct oversight of their work, ensuring transparency and accountability.
Cons of Hiring an In-House Accountant
❌ High salary costs – A full-time accountant doesn’t come cheap, with salaries ranging from £35,000 to £80,000+ annually, depending on experience.
❌ Additional expenses – You must account for National Insurance, pensions, training, and employee benefits.
❌ Limited expertise – A single accountant may not have the diverse experience of a team in an outsourced firm.
❌ Scaling issues – As your business grows, an in-house accountant may struggle to handle increased complexity without extra staff support.
The Case for Hiring an Outsourced Firm
Outsourcing your accounting means hiring an external firm to manage your financial operations. This model is growing in popularity among small businesses because it offers flexibility, expertise, and cost savings.
Pros of Hiring an Outsourced Accounting Firm
✅ Cost-effective – You only pay for the services you need, without the burden of a full-time salary and employee benefits, whether your business scales up or down, pricing can be adjusted effectively.
✅ Access to a team of experts – Instead of relying on one person, you get a team of specialists who bring a wealth of experience in tax planning, bookkeeping, payroll, and financial strategy across multiple industries.
✅ Scalability – As your business grows, an outsourced firm can easily adapt to your needs without requiring additional hires.
✅ Up-to-date compliance – Outsourced firms stay on top of the latest tax laws and financial regulations as part of their role, ensuring you avoid costly mistakes.
✅ Technology & automation – Many firms use advanced accounting software.
Cons of Hiring an Outsourced Firm
❌ Less direct control – Since the team isn’t physically in your office, you might feel less control over their work (though modern communication tools help bridge this gap).
❌ Response time may vary – Depending on the firm, you may not get immediate responses to minor queries (but a well-organised firm ensures timely service).
Cost Comparison: In-House vs. Outsourced Accounting
One of the biggest deciding factors when hiring an accountant is cost. Let’s break it down:
Cost Factor | In-House Accountant | Outsourced Firm |
|---|---|---|
Salary | £35,000 – £80,000+ per year | Varies (often £200 – £5,000/month) |
National Insurance & Benefits | 13.8%+ of salary | £0 (Handled by the firm) |
Software Costs | £500 – £2,000 annually | Included in the service |
Training & CPD | £1,000+ annually | Included in the service |
Scalability | Difficult – Requires hiring more staff | Easy – Adjust service package |
For most small businesses, outsourcing is becoming increasingly popular, due to it providing higher expertise at a lower cost than hiring in-house.
Why Outsourcing is the Better Choice for Most Small Businesses
For many small and medium-sized enterprises, the flexibility, expertise, and affordability of an outsourced firm make it the best choice. Here’s why:
- You get access to a full team of accountants and specialists, rather than relying on a single employee.
- You save money on salaries, benefits, HR and software costs.
- You remain compliant with tax laws without having to keep up with constant regulatory changes.
- You can scale services up or down depending on your business needs.
- You reduce the risk of errors and missed deadlines that could cost your business money.
Unless your business has complex, daily financial needs that require a full-time employee, outsourcing is the smarter, more flexible choice.
Choosing the Right Accounting Solution
If you’re looking for expert accountants, equipped with the knowledge and hands-on advice, our outsourced finance team is here to help.
Schedule a free consultation today and let’s discuss how we can support your business.