While some business leaders are tempted to do their own bookkeeping, the majority prefer to use the services of an accounting firm.
What are the reasons for choosing one or the other solution? How do you know when it’s time for a company to hire a CPA?
We give you some answers.
The advantages of outsourcing accounting
Entrusting its accounting to an external firm has many advantages for the company, which can be divided into different categories
Compliance with accounting, tax and social obligations
This is the main argument that motivates entrepreneurs to entrust their accounting to a specialist.
Companies are subject to numerous obligations: declarations, balance sheets, account keeping… All these administrative tasks become sources of potential errors, with potentially unfortunate consequences for the company and its managers.
A certified public accountant guarantees that :
- The steps are done in time and on time
- The statements are made with full knowledge of the facts
Outsourcing accounting therefore ensures that the company will not be put at odds with the tax authorities.
⚠️ Good to know:
A chartered accountant is a professional whose ethics require him to protect his data. Thus, the information shared with a consulting firm is protected and preserved while respecting the client’s choices.
Ability to focus on your core business
Public accounting is a profession, which requires skills acquired during long studies.
Although most entrepreneurs have a basic understanding of business accounting, few have the knowledge to keep track of the company’s accounts, perform administrative tasks, or prepare an annual balance sheet.
As a result, internal accounting is resource-intensive. How many managers complain about “time wasted on administration”?
Outsourcing your accounting allows you to free up time that you can devote to developing your business. By not dispersing himself in tasks that he does not master, the manager can use his skills to ensure the growth of his turnover and the good health of the company.
Access to valuable tips and up-to-date information
For many entrepreneurs, this is the biggest advantage of outsourcing accounting.
A chartered accountant is a specialist trained in different areas of the business world, with extensive experience, up-to-date information, and a global view of the economy thanks to his collaborations in various sectors.
At all stages of a company’s life, from its creation to its transfer, the chartered accountant advises the managers and helps them make the best choices for the company.
⚠️ Good to know:
The Order of Chartered Accountants obliges its members to “provide advice”.
An external accounting firm will therefore always advise you on the steps to take and the solutions available to you so that you can make the best decision.
The disadvantages of outsourced accounting
Although there are many advantages tooutsourcing accounting, there are also some disadvantages that need to be mentioned.
The main argument against outsourced accounting is its cost, which can be a significant part of the company’s budget.
However, the gains in time, security and peace of mind provided by an external firm must be weighed against the costs. In the end, it is more often than not a profitable investment rather than an expense.
👆 O ur advice:
Review the engagement letter, the contract you enter into with the external accountant, in detail to ensure that you are getting the services you need, and not paying for others that have little value to your business.
Loss of autonomy
This is a disadvantage that we find every time we subcontract or delegate: the tasks will be accomplished in the way of the person in charge, and not as you intend.
And, when it comes to an area as important as accounting, some may find it difficult not to make every decision as they see fit.
However, it is good to remember that the chartered accountant is a specialist, whose mission is defined by contract and who has the obligation to carry it out: when a company calls upon an external firm, it is because this one is better able to keep the accounts in good and due form.
⚠️ Good to know:
In the age of digitalization, the problem of document availability is disappearing.
In the 2000s, it could cause some concern to leave the originals with an outside firm and not have immediate access. Today, the vast majority of these documents are digitized and available in a few clicks.
Who outsources their accounting?
Most entrepreneurs and small and medium-sized businesses are wondering about outsourcing their accounting. Some large groups have also taken the plunge to make operating expenses more variable.
The special case of microenterprises
The accounting and tax obligations of microenterprises are reduced to a minimum, and the declarations to be made are so simple that it is often unnecessary to call on the services of a chartered accountant.
This may change, however, when certain thresholds are crossed and the worker is subject to VAT. In this case, the assistance of a chartered accountant may be necessary.
Small and medium-sized businesses
Whatever their legal status (EI, SARL, SAS, SA…), companies have everything to gain by outsourcing their accounting:
- The complexity of the tasks requires the intervention of a consulting firm
- The volume of work does not justify the hiring of a public accountant
Often, large companies that can afford the cost of a full accounting department and the appointment of a CPA as CFO choose to internalize their accounting.
However, this is not always the case, as many multinationals choose to outsource their accounting to an external firm in order to facilitate their dealings with the various administrations.
In addition, even large groups use the services of external accountants for various assignments.
Signs that it is necessary to outsource your accounting management
If you are still hesitating about outsourcing your accounting management, Les Echos has compiled a list of signals that should help you know if you should take the plunge:
- Your business will change scale
- You have created a company with a certain scope
- You waste too much time and energy in accounting
👆 You can still have questions about outsourcing accounting management, it’s this way!
👆 You have an outsourcing project and want to discuss it with ourteams, it’s this way!