Your Accounting Department: Buy It or Build It?
It’s a quandary facing every entrepreneur: As you put the foundations of your business in place, does it make more sense to build up capabilities in-house or buy a solution that serves them up ready-made?
That issue applies to accounting in particular. Companies have the option to build up an in-house accounting department, which means recruiting staff, selecting software, finding office space, and funding the department into perpetuity. Or they have the option to outsource their accounting and tax requirements, in whole or just in part, to a solution provider that can handle everything and scale with you as you grow.
There are pros and cons to either option, along with important implications for the future of the business. That is to say, it’s not a choice to make lightly, especially as the answer may be less obvious than it seems. Here’s some things to keep in mind.
Realistic Needs
Some businesses need a financial professional focusing on their operations 100% of the time. That could be because they have complicated, sensitive, or fast-growing accounting requirements. But, realistically, most businesses do not need the services of an accountant for 40 hours a week. It’s overkill, and it makes a young business bloated at a time when most strive to be lean and agile.
Budget Considerations
Building an in-house accounting team can be an excellent long-term investment that equips a business with strong, scalable financial foundations. But it comes at a great upfront cost. Hiring one accountant is expensive, hiring a whole team costs much more. Then, there’s technology, office space, and countless other costs necessary to support it. An outsourced service provider may be able to deliver the exact same thing for significantly less overall.
Speed and Scale
When a business needs to accelerate, or navigate through turbulent times, in-house accounting teams struggle to adapt. What they can do is limited by the size of the team and the knowledge base and skills within. Also, recruiting new accounting talent, in addition to being expensive, is difficult due to long-term talent shortages. Many of these teams are great at what they do now but unprepared to do things differently when it comes time to scale.
Not so with an outsourced partner. One core value propositions is the fact that they tailor services to the client’s ongoing and evolving requirements, adapting whenever, however, and to whatever extent the situation requires.
For many small businesses, the choice of whether to buy or build comes down to this: Do we have the time, motivation, and means to build our own accounting team by the time we need to have it in place? If the answer is anything less than a confident yes, buying an outsourced solution that’s ready right now – and robust in every way – makes a lot of sense.
See for yourself what an exceptional partner has to offer. Contact the team at Proseer.
