As a business grows, its financial requirements increase with the same time. As a result, the Directors / owners (often without accounting know-how) have to go through a difficult time deciding whether they should hire an internal accountant or choose another option of hiring. in addition to professional accounting.

The size of the business is a key factor in understanding the financial and accounting challenges that businesses face.

For Large Enterprises (100 or more full-time employees)

Bulky machines always struggle with maintaining business efficiency, Forcing to apply technology to optimize operations. Because for large businesses, the organization of accounting by software systems or data centralization technology, streamlining, saving costs and thereby achieving and maintaining efficiency.

For Medium-sized Businesses (10 to 99 full-time employees)

Mid-sized businesses face various challenges, including:

• Attract and retain talented people; 
• Business development planning;
• Comply with relevant laws and regulations.

Therefore, mid-sized business owners expect the accounting department to be able to:

• Consulting and Financial Planning for growth process planning;
• Consulting and Financial Planning to enable businesses to apply superior salary policy to help recruit and retain talent;
• Control compliance with closely related laws and regulations, to support future development goals.

For Small Business (less than 10 employees)

Small businesses face a different set of challenges, including:

• Not having enough time to handle financial and accounting issues;
• Cash flow is not stable;
• The need to optimize management costs.

As a result, business owners expect the accounting department to be able to:

• Control compliance with relevant laws and regulations as a way to free up time for entrepreneurs to focus on stabilizing their revenue streams;
• Help them optimize management costs

Choosing internal accountants and external accountants to meet the goals is difficult. Therefore, in order to understand the differences and pros and cons of both and be able to make the correct choice, read through this article.

1. Cost factor

Cost is clearly becoming a major concern when it comes to business decisions. Hiring an employee requires large sums of money and ensures reasonable returns.

On the whole, hiring a full-time accountant costs you more. It's not just about how much you pay them as salary but also additional benefits including, insurance, bonus, allowance etc, facilities to work. In this case, another option – outsourcing accounting can save more than 65%.

2. Quality assurance factors

Having an internal accounting team and bookkeeping brings many advantages; you can meet them in person anytime you want and in the event of any urgent accounting job you can get it done right away. However, you may not reap much benefit if you lack the economic resources for the accounting department.

On the contrary, when you buy outsourced services, you will have access to an entire team of experts with detailed knowledge, skills and experience. As a result, the quality of work completed for you is much higher.

3. Consistency

Having an in-house accountant can help comfort you, but their mistakes may go unnoticed. According to the Vietnamese Accounting System norms, organizations are responsible for the incorrect payment of taxes and financial statements made by their accountants. Meanwhile, outsourcing companies often have a team of supervisors assessing the work of their accountants, not letting mistakes happen, making accurate reports consistently.

Second, if your only accountant leaves the company without prior notice, you may have to rush to find a new equivalent and, in addition, have to devote your energy to getting them familiar with the account or your accounting process. This can affect your own performance and that of the business.

Unlike so, outsourcing accountants eliminate such risks. In the event that your outsourced accountant leaves, they can delegate your work to anyone on their team of experts. With outsourcing, businesses can be assured of operational consistency.

4. Questions about loyalty and confidentiality of business information

This is one of the most overlooked factors in the business world. According to one study, 22 to 28% of businesses have experienced employee fraud. Furthermore, corporate scams are more likely to affect small-scale businesses, where the older employees are, the more fraud opportunities they have and the larger the scale of fraud. Plus, the complexity of the process can help someone prevent fraud.

On the other hand, internal employees may be knowledgeable about trade secrets.

Such cases are less common with outsourced accountants for a variety of reasons. They usually have auditors to make sure no fraudulent activity is done. They seriously care about reputation. They are not knowledgeable about business secrets in depth but only on the surface of their professional work. They have no condition or incentive to cheat and gain access to trade secrets.

Therefore, loyalty and reliability are two great reasons to consider outsourcing instead of hiring in-house staff.

5. Vietere, experience and sharpness

You are fully capable of getting expert experience for your accounting work, but using outsourced accounting is the most effective solution to have professionals with a diverse range of expertise, Consistent experience and professional advisor acumen at the cheapest price.

On the other hand, for the most part, with internal accounting and financial resources limited to small and medium enterprises, you can only use accounting with basic functions (Workgroups 1-2).

5.1. Transactional works

• Bookkeeping
• Accounts payable / bill pay
• Accounts Receivable
• Payroll
• Transaction processingFinancial closures

5.2. Compliance works

• Prepare all kinds of tax report (Tax preparation)
• Prepare various types of financial reporting (Financial reporting)
• Payroll compliance reporting

Meanwhile, the large and professional accounting service providers can provide you with important accounting services (Working Groups 3-4-5):

5.3. Consulting works of experts

• Tax consulting
• Tax planning

5.4. Performance works

• Cash flow analytics
• Data analytics
• Financial performance
• Internal control

5.5. Strategic works

• Budgeting
• Financial Planning
• Enterprise valuation and investment plan (M&A & Funding)

Refer: Package tax accounting service

Situation 1

You are considering hiring a full-time accountant in your office.

It is precisely the SMEs that maintain a balance between income and expenditure, a positive cash flow. As an entrepreneur, you must know that an accountant can add more expenses to your business account. The most notable downside here is that you may have to expand your office space, buy a computer system, buy an accounting software (keep up with trends) and pay employee benefits.

Advantage:

• Resolved quickly when required.
• Control more employees

Disadvantages:

• Expensive
• Limited experience
• Does not support solving accounting problems
• Unable to deal with complex problem situations

Situation 2

You are planning on doing your business accounting or assigning this responsibility to an employee while using accounting software.

Assigning an employee the role of a bookkeeper, especially for a potential growing business, can become a bit risky for a number of reasons. The biggest risk is that the employee will not have knowledge of accounting processes and will not be able to help you with financial planning.

Advantage:

• Cost-saving
• No complicated hiring

Disadvantages:

• Lack of accounting knowledge and experience
• Inability to provide financial details
• Increased risk of costly mistakes

Situation 3

You are planning on implementing your business growth plans, you need a financial expert to evaluate and provide financial parameters for your decision.

Hire an expert with a fairly high salary or hire a large, professional accounting firm to advise

Advantage:

• Resolved quickly when required.
• Control more employees

Disadvantages:

• The cost is too high compared to outsourcing
• You are incapable of assessing an expert's accounting knowledge and experience
• Increased risk of making the mistake of damaging the development plan

There are significant benefits you can reap by leveraging the skills, expertise and experience of the accounting professionals at your outsourced partner company.

They can help you run your business smoothly, you will benefit because they will take care of your finances and accounting in a consistent and organized manner, while reducing the burden. tax to you and provide personal accounting services.

Each company that provides accounting outsourcing services will have different service costs, policies, work schedule models, etc.

It's important to consider what you get from your outsourcing partner.

You need to check their service details, including:

• Have your questions been answered promptly?
• Do they offer a stable cost plan?
• Are they committed to providing quality services?
• Are they willing to provide complete accounting services?
• Are they willing to give you professional financial advice?
• Will they represent you in the case of tax audits?
• Will they represent you in the case of a financial audit?

You should check their service delivery authorities and management, including:

• You are protected only when you hire a qualified service provider, check if they are qualified to practice accounting?
• Does management have sufficient professional experience with your industry
• Is the board of directors available to assist you?