Advantages of outsourcing accounting services and questions to ask your business
As business owners across Europe look for leaner, smarter ways to manage accounting, one question comes up often: What are the benefits of outsourcing bookkeeping, and is online accounting service a better choice than a traditional accountant?
A traditional accountant offers face-to-face meetings, paper trails, a sense of familiarity, and a reassuringly physical presence. This setup still works for many, especially those running long-established businesses. But it’s also built on a model that hasn’t changed much in decades.
Why even outsource accounting services
Traditional accountants offer a hands-on touch: in-person meetings, tangible records, and a steady presence. For established firms, this still resonates, but it’s a relic of slower times with manual entries, emailed documents, and rough analytics. Across the EU, small and medium-sized enterprises, which make up 99.8% of non-financial firms, face a time burden from compliance with EU laws and bookkeeping, a real drain that micro SMEs, say local bakery or freelance graphic designer, cannot ignore.
Online accounting services offer a very different value proposition. Most modern platforms provide real-time dashboards, automated invoicing, AI-supported categorization of expenses, and seamless bank integrations. Instead of waiting for a quarterly meeting, you can track your financial health on demand.
Time is money
Companies using integrated cloud tools for accounting services saw a 30–45% drop in back-office time requirements. These tools are especially helpful to fast-paced startups, solo entrepreneurs, and SMEs that rely on lean operations but still need compliance-grade accuracy.
Recent trends point to a growing interest in outsourcing, with searches for 'accountancy outsourcing' jumping by nearly a fifth in 2023. On a broader scale, global spending on outsourcing services for business tasks has surged by over 40% since 2019, reflecting a clear shift toward external solutions for business needs.
A recent Clutch report further underscores the popularity of outsourcing, with 37% of small businesses already outsourcing accounting or IT services. Nearly a quarter of these businesses cite boosting efficiency as the primary reason for outsourcing, followed by increasing available expertise (18%), flexibility (16%), and allowing employees to focus on other tasks (15%).
Weighing accounting options: outsourcing, traditional vs. digital
Experts see outsourcing foremost as a strategic edge. External teams bring specialized knowledge, staying ahead of EU tax codes and complex GDPR policies, which in-house employees might struggle to match without constant keeping up-to-date through additional training. There is more.
Deep familiarity with business ensures close and steady oversight with a full-time accountant. Local expertise without commitment reduces long-term costs with an external accountant. Real-time data access speeds up financial decisions with online digital accounting.
Advantages of outsourcing bookkeeping services
Across Europe, firms are leaning into this shift for practical reasons. 37% of small businesses outsource accounting, often to skip fixed costs like the €50,000 annual salary of a full-time accountant in Western Europe. Outsourcing limits these prices to €1,000 monthly for mid-sized companies.
Modern accountants are eager to embrace big data and analytics. Fortunately, digital platforms and tools already offer this potential without requiring accountants to build it from scratch. While traditionals may be reluctant to adapt, outsourced accounting teams are using these tools to keep data flowing in real time. This helps companies identify cash flow issues or errors early-before they escalate into larger problems-and improve financial decision-making.
Outsourcing also lowers risk, professionally speaking. External firms often have a network of experts who speak multiple languages and know the ins and outs of Europe’s tricky and varied regions. Beyond savings and tech, there’s a human perk: you ditch the spreadsheet slog for big-picture planning.
Potentially unfavorable sides of the deal
Traditional accountants are down the hall, instantly accountable. Outsourced teams are often remote, sometimes continents away. A provider in Poland might be snoring while you’re racing a deadline in Ireland. This is a persistent challenge, even as outsourcing booms.
Cyber breaches hit hard — financial data’s a prime target. While top firms encrypt and comply, smaller ones might skimp, risking leaks. Traditional setups keep files local, shrinking that exposure, especially in regulated sectors like healthcare.
Whether outsourcing accounting services will fit you may depend heavily on your professional field: if it is too niche, some same-for-all services will not fit. With the rising demand for specialized outsourcing, generic services can miss the mark.
Test. Will an outsourced accounting work for my business?
24% of UK companies outsource accounting, but some reconsider when savings become uncertain. It's a gamble: efficiency versus oversight. Still, the benefits of outsourcing accounting for entrepreneurs, such as freeing up 20 hours a month for strategy, often tip the scales.
This quick test will help you figure out if your business is ready to hand over the numbers and switch to outsource online accounting. With just 8 questions, you’ll get a clear snapshot of how paperless bookkeeping could fit or clash with your setup.
Grab a pen, notepad, or your phone to write down your answers. For each question, pick the option — A, B, or C — that feels most like your situation.
- How much time do you spend managing your finances monthly?
- A) Over 20 hours — I’m drowning in spreadsheets.
- B) 10-20 hours — it’s manageable but eats into my day.
- C) Less than 10 hours — I’ve got it under control (delegated).
- What’s your budget like for accounting?
- A) Tight — I need to cut costs wherever I can.
- B) Moderate — I can afford some help but will watch spending.
- C) Comfortable — I’m fine paying for full-time staff.
- How comfortable are you with cloud-based tools?
- A) Love them — I’m already using GoogleSheets.
- B) Okay with them — I’d learn if needed.
- C) Not a fan — I prefer paper or local files.
- How often do you deal with complex regulations (e.g., tax codes, GDPR)?
- A) Constantly — I need experts to keep up.
- B) Sometimes — it’s tricky but I manage.
- C) Rarely — my setup’s simple enough.
- How important is direct control over your financial data?
- A) Not critical — I trust pros to handle it.
- B) Somewhat important — I like oversight but can delegate.
- C) Very important — I need to see everything myself.
- How fast do you need financial insights (e.g., cash flow updates)?
- A) Real-time — I can’t wait for answers.
- B) Weekly or monthly — that’s fine for me.
- C) Quarterly or yearly — I’m not in a rush.
- How big is your business?
- A) Small (1-10 employees) — I’m stretched thin and there are many invoices.
- B) Medium (11-50 employees) — growing but steady, we could save on incentives.
- C) Large (50+ employees) — I’ve got a solid team and need efficiency in finances.
- Have you had issues with accounting errors or penalties?
- A) Yes — mistakes are costing me.
- B) Occasionally — nothing major yet.
- C) No — my system’s airtight.
TIPS: Results of the self-test
- Mostly A’s
Outsourcing calls. Time sinks and errors are already costing you a penny, don't let yourself slip because you don't think the revenue is big enough for a full-time company accountant. Automation could change your game, and there are many services that offer flexible solutions to fit smaller budgets.
- Mostly B’s
Outsourcing might ease the load, but control’s a must-have. Try a hybrid model to find your own advantages of outsourcing bookkeeping services: is it for having stats at hand when applying to grants, or you will deal with tax issues and have no chances to spare.
- Mostly C’s
Stick with what works for you. Maybe you'll go digital with one or two processes that bother you the most, but overall your efficiency doesn't need to be outsourced. Tell us, how did you climb this Olympus?
If A’s and B’s tie, lean toward outsourcing with caution. If B’s and C’s tie, you’re likely okay in-house but open to change. A’s and C’s together? Focus on what’s pushing you most and decide from there.
The 40% spike in global outsourcing spend signals a shift, fueled by cost cuts and digital tools that accompany or replace in some cases traditional accountants. Yet, the risks, control gaps, security hiccups, remind us it’s no cure-all. Dig into the data, grill your providers, and you’ll steer toward a choice that’s less about outsourcing’s hype and more about your bottom line.
Frequently Asked Questions (FAQ)
Why outsource accounting if I have a traditional accountant?
What are the main benefits of outsourcing bookkeeping?
Is outsourcing accounting safe for sensitive data?
Source: icaew.com, ec.europa.eu, accountancyage.com, explodingtopics.com, inaa.org, single-market-economy.ec.europa.eu, glassdoor.fr, digital-strategy.ec.europa.eu
We took photos from these sources: Behnam Norouzi on Unsplash
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