Warning: In-House Accountants Could be a Risk to Your Business
When companies are building their finance department, they typically believe they should hire in-house accountants. However, from our experience, this can cause a lot of painful issues. In this article, we’ll share with you the real risks and a viable alternative.
First…here is why businesses love the idea of having in-house accountants:
It feels great to have someone in charge of all of the accounting and finance-related tasks that are not the best use of your time. You can assign anything to them with few limitations. You can work with them for a fixed cost for what seems like a lot of flexibility. Plus, it feels great to be able to talk to the person in the office anytime you need!
But, here are the problems that businesses don’t realize exist with their in-house accountant until it’s too late:
Your primary risk? Your accountants won’t stay with you forever. Maybe they won’t leave for another 2-3 years, but it’ll happen.
Companies, especially those with small finance departments, expect their accountants to be as strategic as a CFO, execute junior-level bookkeeping, and be happy to do everything in-between. That’s a lot of pressure!
The reality is that all finance-related skills cannot be found within a single person. You might hire someone who’s skilled in tax compliance without realizing they lack process management and technology skills. Because of this, most in-house accountants find themselves stressed. They are trying to keep everything afloat because they have too many expectations placed on them and end up leaving.
And when that happens, you’ll have to scramble to find someone new, FAST, because your accountant is going to use up all of their accrued paid leave before their last day.
Unfortunately, you’ll realize that you have no clue what that accountant had been doing. They had created their own inefficient system without any documentation. So if you can’t perform a proper handover before they leave, you’ll be left trying to train a new person on data and files you’ve been in the dark about.
So, in a nutshell, when you hire an in-house accountant, there is a good chance they will get burnt out and leave. And you’ll wind up in charge of a rushed handover for work you don’t know anything about.
So, how do you avoid this risk?
One good alternative is to outsource work to an accounting firm. When you outsource, you gain two main benefits compared to having in-house accountants: business continuity and a team of experts.
Business continuity means that you won’t have to worry about any complicated handovers or business disruptions when a team member leaves. With a good accounting firm, they will handle any turnover within their team behind the scenes without disrupting your business.
You’ll also be equipped with a team of experts. This means that instead of having a single accountant with limited skills stretched too thin trying to do everything, you’ll have a team that excels at each skill necessary for a comparable cost.
If you agree this is a real risk to your business, feel free to contact us here and we’re happy to walk you through how we can help.