For any business, the decision to outsource the accounting function is a great milestone. The choice is hard to make, as it adds an extra business cost and cuts into the enterprise revenue. However, hiring for professional accounting does allow companies more time to focus on their core business processes. For addressing their accounting worries, enterprises can either select their services of a professional accounting firm or freelance accountant.
The choice depends on various factors, including the size of the business, the allocated budget, accountant being in the same city or local accountants, accounting requirements, etc. To ease the struggle, we have summed up a comprehensive comparison of the benefits of hiring professional accounting firms vs. freelance accountants.
The Cost Factor
When it comes to professional accounting firms, the expenses incurred by clients are high. This can be due to a wide variety of reasons, such as service guarantee, faster reconciliation of queries and access to a larger team of experienced experts who can offer a range of accounting services. Many professional accounting firms also have tie-ups with application and service providers; thus, these firms can pass on discounts and rebates on accounting software, applications, payroll services, etc. to their clients. On the contrary, freelance accountants usually offer their services on a low per-hour or fixed rate. Freelance accountants do not have a high business overhead, and they can work from home or even the client’s office, which further reduces the expenses, thereby making it possible for them to offer low-cost services to their clients.
Professional accounting firms, these days, manage their clients’ accounting data via cloud-based software and applications, which have enabled these firms to offer their services remotely from their office location. The software and applications usually have a customer self-help portal that clients can use to manage/modify their own information, register service requests, track the status of requests and scan & upload documents, among other tasks. With cloud-based software, professional accounting firms help their clients go paperless—all these and other benefits without even having to meet clients on a day-to-day basis.
On the other hand, freelance accountants are usually open to travelling and may agree to work from their client’s office. This has its own advantages and disadvantages. Having a freelance accountant work at the office will allow anytime redressal of queries or last-minute questions. Moreover, the accountant will be able to easily understand the day-to-day operations of the business. However, it would also mean an additional cost to clients, as they will have to offer office space, working equipment and other furniture for accommodating the freelance accountant.
Schedules and Deadlines
With regard to schedules and deadlines, professional accounting firms offer more value to their clients as compared to freelance accountants. This is because professional accounting firms have several experienced personnel working in specific accounting areas, and when a client is on boarded, he/she is assigned a dedicated accountant who tends only to that specific client. Moreover, if this accountant were to go on a leave, even for a long duration, the professional accounting firm has ample resources to cover up and ensure the client’s deadlines are not missed. On the contrary, a freelance accountant is more than likely to have multiple clients, as he/she is not permanently employed in any specific organisation. Though a well-managed freelancer can efficiently handle all client deadlines, there is always a possibility that things may not turn up on time. Moreover, if a freelance accountant were to go on a vacation, the client’s entire accounting function would come to a standstill.
The services offered by professional accounting firms are not limited to a single accounting function, they are multifarious. These firms hire accounting professionals who have expertise in different accounting processes, such as compliance, bookkeeping, auditing, etc. This offers a one-stop solution that can handle all the accounting needs of clients across multiple domains. However, with freelance accountants, these wide-ranging capabilities are not available, as freelancers are individuals who may have expertise in a specific or a couple of areas. Therefore, clients would have to manage with the limited industry knowledge of the freelancer. This works well if the client’s operations are within the ambit, but if they were to exceed it, the client would face difficulties. Moreover, the expertise of freelancers may not match up to the expertise of the accounting specialists hired by.