Many people start a business in a field they are not familiar with. However, regardless of your industry, running a business involves good accounting. Some business owners prefer to do their accounting in-house. Although this can be done, there are risks involved with in-house accounting. Keep reading to learn about the drawbacks of in-house accounting and why you should consider outsourcing your accounting needs to a Homewood and Birmingham CPA.
Depending on One Accountant
When handling your finances in-house, you may depend on one in-house accountant. Regardless of the accountant’s skills, they can make mistakes. Without another expert to check and revise their work, such mistakes can easily go unnoticed. But if you outsource your accounting needs to an accounting firm, you get access to a team of accounting and financial experts who will ensure accuracy and precision in their work. While the firm may assign your accounting needs to one of their accountants, there is a team behind this professional who won’t allow mistakes to slip through the cracks.
Possibility of Internal Fraud
Building an in-house accounting department increases the risk of internal fraud. This can particularly happen if the accountant also has other jobs. However, if you partner with a reputable accounting firm, you can be sure that parameters are in place to prevent fraudulent activities from arising. If you choose to run an in-house accounting without enough experience doing so, you may not be able to establish adequate protection against fraud.
Lack of Training
A trusted accounting firm ensures their accountant learns about new accounting practices and is familiar with accounting software updates. In-house accountants fall behind on regular training. One reason for this is that training means cost, and as you try to cut down on your expenses, training your team may not be at the top of your priority list. Besides, maintaining continuous training with an accountant with a heavy workload is not easy.
Constant Turnover Due to Work-Related Stress
An accountant may not have all the finance-related skills. You may recruit an accountant who specializes in tax compliance but does not have technical and management skills. As a result, this person can get stressed out as they try to keep things afloat while trying to meet your expectations of them.
When this occurs, you will need to hire somebody new. Sadly, you may realize that you do not know what the previous accountant had been doing. This person may have established an inefficient system without documentation. Thus, not doing a proper turnover before the accountant leaves can result in you training a new one on files and data you are not familiar with. 
Work Quality
Accounting requires strong mathematical skills, attention to detail, and extensive experience that is difficult to master. You may have an accountant do such tasks unless you pay more for a team of accountants. This could result in poor-quality work. Costly mistakes can be made until it is too late. Meanwhile, outsourced accountants work with a team of skilled and experienced professionals.
Inability to Scale
If you only have one or two accountants, you cannot scale your business. The demands of growing your business will overwhelm your accountant. As your company grows, your financial requirements also grow, and your accountant may not be able to handle it. This can result in issues and setbacks that could affect your organization. Outsourcing accounting can resolve this issue. It allows you to scale up or switch to another package as needed. An outsourcing firm can help you make a plan that fits the needs of your business. Also, you will get top talent who has the skills and know-how in new technologies to keep your business relevant in your industry.
