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Most businesses choose to entrust their accounting to a specialist. Keeping accounts independently is rare and occurs mainly among small sole proprietorships. Larger businesses tend to choose one of two approaches: hiring their own full-time accountant or using the support of a larger accounting firm. Let us see which solution is most advantageous from a business owner's perspective.
An in-house accountant – advantages and disadvantages
This solution is often chosen by larger businesses that can afford an additional employee. However, larger businesses also often need specialists in many fields, something one person cannot provide.
Advantages of an in-house accountant:
● A sense of security and control – a dedicated employee who has undergone recruitment for an accounting position may be seen as a safer option than an external accounting firm,
● Faster access to information – the accountant is available on site, so answers can be obtained immediately,
● Better understanding of the company's specifics – a full-time accountant works for just one company, knows its particular circumstances very well and can tailor dedicated solutions.
Disadvantages of an in-house accountant:
● Additional costs – these include not only the employee's salary but also creating a workspace, buying equipment and software, and training fees,
● Accounting problems during absences – when the accountant is on leave or ill, problems with correctly settling the company's finances may arise,
● Lower liability – if accounting errors occur, compensation may be sought, but its maximum amount does not exceed three months of the accountant's salary,
● No multidisciplinary approach – an accountant specialises in keeping accounting books, so their range of services is narrower than that of an accounting firm.
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An accounting firm – advantages and disadvantages
More and more companies choose an external accounting firm, particularly those required to maintain full accounting records. Access to an intuitive client portal, online communication and lower accounting service costs particularly attract young business owners open to modern solutions.
Advantages of an accounting firm:
● Lower costs – you do not have to pay for equipment, software, training or creating a workspace, only for accounting services (employee salary and contribution costs are also eliminated),
● Modern methods – accounting firms use more advanced systems than independent accountants, including a client portal with 24/7 access to accounting documents, a dedicated adviser or chat,
● Continuity of accounting services – you do not need to worry about your accounting during an employee's leave, because the accounting firm is responsible for continuity,
● Greater liability – in the event of accounting errors, you can obtain substantial compensation from the firm's liability insurance policy,
● A multidisciplinary approach – an accounting firm employs a multidisciplinary team of specialists who are experts in different fields,
● The best specialists – an accounting firm cannot afford to lose its reputation, so it hires only the best experts.
Disadvantages of an accounting firm:
● Trust issues – many companies are afraid to entrust their finances to an external company, making research and the use of experienced, reputable accounting firms very important,
● Possible communication problems – contact is usually electronic or by telephone, so this option is less popular with companies that prefer in-person contact,
● Less understanding of the company's specifics – an accounting firm serves many entities, so it cannot be 100% involved in the company's operations.
An accountant plus an accounting firm – does it make sense?
An alternative solution is to combine an accountant's work with an accounting firm's services. This is particularly useful during annual leave or sick leave. If we employ one accountant, we must realise they will be on leave for at least 20 days a year, not to mention unexpected situations such as illness. For this reason, we must have a contingency plan: a replacement accountant (an additional position) or cooperation with an accounting firm.
However, remember that the latter option may be somewhat troublesome, especially when urgent help is needed. The accounting firm must familiarise itself not only with our business profile but also with our accounting records to date. With exclusive cooperation with an accounting firm, we do not have to worry that an accountant will take leave, become ill or resign: the firm will arrange a professional replacement itself, without any loss of service quality.
Liability of an accountant and an accounting firm
An accountant is responsible for improper performance of their work. Their liability is regulated by Articles 77 and 79 of the Accounting Act, which list specific examples punishable by a fine or imprisonment (including failure to keep accounting books, keeping them contrary to the Act or entering unreliable data).
If an accountant makes an error that negatively affects the company's operations, the business owner may seek compensation. For an in-house accountant, however, this cannot exceed three months of the salary to which the employee was entitled on the day the damage was caused. Choosing an accounting firm with a current liability insurance policy is much more advantageous: the business owner may receive higher compensation, even several hundred thousand zlotys.
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Summary
The TaxCoach accounting firm comprises more than 100 specialists across many fields, including accountants, HR and payroll specialists, tax advisers and chief financial officers. This multidisciplinary team provides comprehensive accounting support while also offering a variety of solutions to help run a business.
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