Intercommunicating with leaders of different enterprises you have found out that many of them formed definite perception stereotypes in respect of staff accountants as well as outsourcing companies. Unfortunately, stereotypes form more often due to negative experience. At this claims to accountants more often concern their professionalism, while during interaction with outer companies many things are complicated due to misunderstanding, and, as a result, insufficiently accurate cooperation.
We shall consider three main known models of ensuring accounting at the enterprise. In all cases behind the term “enterprise” there are live people. Exactly on them, as well as on personal characteristics of the leader, his methods, preferences and objectives depends which way of accounting resources support and which control scheme will be formed at the enterprise.
1. Hiring the staff accountant
It is quite easy to recruit a staff accountant. Huge amount of applicants for the position normally makes the leader optimistic. In reality, in order to identify an actually worthy candidate one will have to become a good psychologist and personnel officer and, besides, to develop his foresight. As well as to minimize the risk «to repeat the procedure from the beginning». Recruitment companies can somewhat ease the torment, having performed preliminary selection based on parameters set by the leader. But they do not, in any case, guarantee the final result.
Besides, quite often your own accounting department becomes a «sacred cow». For whom many things are sacrificed… But this does not prevent an accountant, in first ranks, from being part of the «risk group» among the company employees as regards confidential data leakage, non-productive use of company resources and deliberate distortion of financial reports due to different reasons including that of negligence.
Pros:
for many people business is not just work, but «creation» and possibility for experiment. Therefore to have an accountant who is always «at hand», to personally control his occupation and to have a possibility to entrust him with something else, in addition, is huge help in such a creative process. Furthermore, when an accountant is always by your side, one may hope that he will be able to understand many things by hint. Seemingly, one should not strain himself to formulate tasks.
Cons:
at some moment you can feel that you have become your accountant's «hostage» - his manner or work pace do not allow to substantially accelerate the enterprise development, and search of another candidate will necessarily take a lot of time and means which are mostly needed right now. In addition, it can be not simple to dismiss a former employee. Especially «without offense».
2. Employment of a freelance accountant (home based accountancy)
At first sight, this is a sufficiently cost-efficient decision. Really, a freelance accountant often already has some volume of work and income level. Hence, he will not totally «burden» the leader. Such person is most often found upon friends’ recommendation. But, in fact, these recommendations do not always correspond to reality. Possibilities of such employee to a large extent are limited by his employment at main place of work or by absence at his disposal of some elementary resources and customary accounting instruments…
Nothing to be said about the legal status of such labor relations. Any aspects of reliability can be observed only based «on trust». And nothing can be done about it… Even if the person is grossly evading something. And nowadays this means big risks. The more so, as this person will most likely be unable to be a legal representative of the organization during settlement of tax and other disputes…
Pros:
Probably, this is the cheapest in all aspects decision with the lowest responsibility for both parties.
Cons:
responsibility of the employee is limited to reparation of loss caused to company by his actions. More often reparation of loss is replaced by the employee dismissal. As to a freelance employee, you cannot even dismiss him…
3. Hiring the professional accounting company
The principle of outsourcing is extremely simple – concentrate all your efforts on main direction and transfer auxiliary functions to others.
Most justifiable the use of outsourcing is in spheres of information technologies, accounting services, administrative management, corporate safety, quartering (catering, office cleaning, etc.).
One more reason to switch to outsourcing – preparation of reports according to international standards. This is necessary in case when the company is looking for foreign investors. Outsourcing by itself means accounting transparency. Besides, international accounting standards are most close to the developed system of management accounting. But be careful – transition to outsourcing involves some risks.
Pros:
adaptability to manufacture and effectiveness. Adequate services cost - payment to provider is directly connected with the enterprise activity and economic effectiveness. Simple process management and maximum flexibility.
Cons:
The main negative moment is in logical development of an advantage – outsourcing strongly disciplines. Under conditions when both sides are aspiring to more effectiveness, setting of tasks and distribution of functions require maximum accuracy. «Neglects» may cause time loss and misunderstanding of an executor.
Please be advised that any of above listed variants will surely entail a chain of managerial solutions. Which arguments will outweigh is up to you to decide. Not all pluses and minuses of outsourcing in the accounting area are evident at first sight, Their biggest part depends on the specifics of your business. But, from our point of view, one should aspire to creation of an enterprise as a system which reminds of a living body, which can independently resist outer and inner risk factors. And if you manage «to tune» an accurate cooperation with such company, you will fully feel all conveniences and advantages.
Accounting outsourcing is, undoubtedly, effective and can be positively recommended for the following companies:
We collect different materials in order for you to get to know different opinions and practical experience of use of accounting outsourcing in different companies. In separate cases opinions and experience can be diametrically opposite, but we consider ourselves obliged to submit to you all interesting or deserving attention materials notwithstanding the attitude of their authors to outsourcing. You will be able to find references, articles and notes on practical experience on pages of Acotax company blog.
