For the ongoing success of the business, it is important to ensure financial accuracy of daily transactions and to use this data provided in order to make decisions for the business in future. As businesses grow from small to large the need for professional accountants for bookkeeping process is also increased. Small businesses may hire one person to handle all of the daily transactions and financial reporting but when business grows a full-dedicated team of accountants is required to handle huge business data and perform its entries in order to obtain accurate reports on time.
Large businesses build-up separate departments for maintenance of daily financial records. Professional accountants are employed by the department to carry out the accounting and reporting process in-house. The only duty of the department is to maintain records accurately, produce reports according to standards and regulations and provide recommendations to improve financial health of the business. All activities starting from bookkeeping, budgeting, financial decisions and tax preparation is duty of the accounting department. Large businesses usually employ accounting professional for a fixed salary of about $20,000 to $55,000 per year. Depending upon the volume and complexity of business data number of accounting department workforce is increased or decreased hence varying costs.
Other businesses often out-source bookkeeping service to professional bookkeeping service providing companies. Big 4 firms and their competitors are mostly hired if an organization wishes to out-source its bookkeeping function. Although they are very expensive to hire but after hiring them the business owner is at ease. It does not have to tale the headache of running its own accounting department at a big scale. Professional bookkeeping firms are highly experienced at bookkeeping in a wide variety of business sectors and business natures. Since they have high caliber bookkeepers they can handle any type of transactions that occur within the business. However, prices charged by big bookkeeping service providing companies is quite high. They set prices for the standard they give to the client.
In-house bookkeeping by your own employees gives you control over your bookkeeping process. The treatment of transactions is made according to the business operations. They can be personalized where necessary. There is nothing that the management is unaware of. The business has all the tracks how a particular entry was made and what effect it has on the statements. In-house bookkeeping is safe as internal data does not have to be shared with external companies.
In-house bookkeeping is safe and secure but it consumes extra time of the management to look after the running of this department. Big salaries have to be given on continuous basis to fixed professional accountants. Since internal department have limited knowledge, it becomes difficult for them to deal with issues that they have never faced earlier. This may lead to inaccurate bookkeeping producing inaccurate results due to mistakes. Bookkeeping service companies have diversified knowledge and experience hence chances of mistakes is minimized.