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The decision whether to create an internal accounting department or entrust finances to an external partner involves much more than comparing an accountant’s salary with an accounting firm’s monthly subscription.
For small and medium-sized enterprises, the cost of accounting includes not only salaries but also software, recruitment, training, cover for absent staff, supervision, data security, implementing new technologies and the risks arising from errors or the absence of key employees.
Before deciding, it is therefore worth calculating the total cost of maintaining the finance and accounting function and checking which model actually suits the company’s scale and way of operating.
In-house accounting or outsourcing — what is the most important difference?
An internal accounting department means that the business develops expertise, hires staff, purchases tools and takes responsibility for organising the entire process itself.
With outsourcing, the company buys a service. An external team takes over a defined range of duties relating, among other things, to posting documents, tax settlements, reporting or handling financial processes.
The difference is therefore similar to choosing between building your own infrastructure and using a ready-made service.
For an entrepreneur, this means a completely different cost and organisational model.
How much does an in-house accounting department really cost?
The first cost usually considered when hiring an accountant is gross remuneration. In reality, it is just one of many items.
When analysing the total cost of employment, employer-funded contributions, workstation equipment, software, administration and the time needed to manage the team must also be included.
The main costs of in-house accounting include:
Employee salaries, including employer costs;
Recruiting and onboarding new staff;
Holidays, sick leave and arranging cover;
Licences for accounting, HR and finance systems;
Software updates;
IT infrastructure and data security;
Workstation equipment and office space;
Training relating to tax and accounting changes;
Employee benefits;
Supervising the department’s work;
Creating and developing accounting procedures;
Implementing or configuring ERP systems;
Process automation and using AI tools;
Consultations with tax advisers, lawyers, IT specialists or financial experts;
The costs of errors and correcting them later.
There is also a cost particularly hard to notice in a conventional budget: the management time devoted to creating and maintaining the entire accounting function.
Instead of focusing on sales, customers and scaling the business, the owner or management board may become involved in recruitment, resolving staffing issues, selecting systems or arranging cover.
The hidden cost of mismatched staffing levels
In small finance departments, it is difficult to match staff numbers perfectly to the current workload.
In quieter periods, some of the team’s capacity may go unused. When document volumes increase, year-end closing or an inspection arrives, or the company grows rapidly, the same number of people may prove insufficient.
However, the company bears a fixed employment cost regardless of changes in current demand.
With outsourced accounting, it is easier to scale the scope of service as the number of documents, employees or transactions grows. The business purchases a defined service scope instead of building all the necessary resources itself.
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Should a highly qualified accountant be entering invoices?
Another problem with in-house accounting can be inappropriate use of expertise.
If the chief accountant performs routine tasks that could be automated or assigned to an employee with a different level of experience, the company is using expensive resources for simple operational tasks.
A modern accounting service model can look different.
Some data is read from documents automatically. The accountant is primarily responsible for checking accuracy, while more experienced specialists focus on quality checks, month-end closing and more complex issues.
A process organised in this way makes it possible to match employees’ expertise to the actual difficulty of the task.
The “one-person” risk in accounting
For small businesses, the risk of making financial processes dependent on a single specialist is particularly important.
If one person knows the settlement structure, the history of unusual transactions and how the systems work, their prolonged absence can create a serious organisational problem.
What happens if the accountant is ill for several weeks?
Who takes over if they resign just before month-end closing?
Where is the knowledge about unusual ways of accounting for individual transactions stored?
With one-person accounting, these questions can be difficult to answer.
Outsourcing reduces staffing risk
In a professional accounting firm, client service should be based on a team, procedures and systems documenting the operations performed.
This means that the absence of a particular accountant need not bring work to a halt.
The settlement history, documentation and client information are stored in the organisation’s systems, making it possible to maintain service continuity even when staff changes occur.
For an entrepreneur, this is one of the more important arguments for outsourcing.
Access to expertise beyond accounting alone
A company’s settlements increasingly require knowledge extending beyond traditional document recording.
The business may need support with:
Taxes;
HR and payroll;
Controlling;
Financial analysis;
Systems integration;
Automation;
KSeF;
ERP processes;
Management reporting.
One person rarely has expert knowledge in all these areas.
Moreover, some issues require the expertise or qualifications of other specialists. An accountant does not replace a tax adviser in every tax matter, just as a tax adviser need not be an expert in integrating financial systems.
In larger organisations providing outsourced finance and accounting services, clients can gain access to a team of experts in various fields.
TaxCoach is an example of this model, where accounting services are complemented by the expertise of tax advisers and technology specialists. This allows more complex problems to be resolved without having to find another service provider each time.
Technology as a hidden accounting cost
Digital accounting today requires much more than installing an invoicing program.
The following are increasingly important:
Electronic document workflows;
Integration with banking;
Integration with sales systems;
Automatic data retrieval;
A digital archive;
Data quality checks;
Reporting;
ERP systems;
Process automation;
Tools using AI;
Solutions adapted to KSeF requirements.
A company with its own accounting department must purchase, implement, maintain and develop these solutions itself.
In the outsourcing model, technology costs are spread across many clients of the service provider. This allows even a smaller company to use solutions whose independent implementation would be disproportionately expensive.
Accounting outsourcing — when does it pay off most?
External accounting is particularly attractive to businesses wishing to reduce fixed costs while also gaining access to broader expertise.
Outsourcing is especially worth considering when a company:
Is growing rapidly;
Does not want to build its own finance department from scratch;
Needs easily scalable service;
Wants to reduce the risk associated with a single employee’s absence;
Needs access to tax or technology specialists;
Plans to automate processes;
Uses or intends to use an ERP system;
Wants to focus management resources on its core business.
In such a case, the monthly service price is just one element of the decision. Far more important may be how much time, risk and investment the company eliminates by outsourcing processes.
When can an in-house accounting department be a better solution?
Outsourcing need not be the best option for every organisation.
An internal finance and accounting team may be justified in large businesses with extensive and highly specific operational processes.
This particularly applies where the finance department must work continuously with many other organisational units, participate in daily operational decisions or support an unusual business model requiring ongoing expert involvement.
A hybrid model also exists. A company can retain controlling, the CFO position or strategic finance functions internally while outsourcing transactional accounting, HR or selected processes to an external partner.
In-house accounting versus outsourcing — what should the cost calculation include?
When comparing the models, it is worth looking at the total cost of the accounting function rather than a single invoice or payroll alone.
A good calculation should cover five areas:
1. PeopleSalaries, recruitment, training, benefits, holidays and cover.
2. TechnologyAccounting software, ERP, integrations, cybersecurity, automation and AI.
3. OrganisationCreating procedures, supervision, team management and quality control.
4. RiskErrors, turnover, absences, loss of knowledge and problems with timely settlements.
5. Opportunity costTime spent by the owner and managers on building and maintaining accounting resources instead of developing the business.
Only such a comparison can answer which option is more economically advantageous for a particular business.
Summary: an in-house accounting department or an accounting firm?
For many SMEs, outsourcing accounting can be more efficient than building an internal department from scratch.
However, the most important benefit need not be the lower price itself.
The company gains access to a team, technology, procedures and additional expertise while reducing the risk associated with employee turnover and absences.
An in-house department, on the other hand, can have an advantage in larger organisations where finance is closely linked to unusual operational processes and requires specialists to be permanently present within the company.
Therefore, instead of asking only “how much does an accountant cost?”, it is worth asking a different question:
How much does organising all accounting internally really cost the company?
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FAQ — frequently asked questions
Is outsourcing accounting cheaper than hiring an accountant?
In many small and medium-sized businesses, outsourcing can be cheaper because the entrepreneur does not directly bear the costs of recruitment, holidays, cover, infrastructure, some software or maintaining a full team of specialists. Actual cost-effectiveness depends on the scale of operations, document volumes and the required service scope.
What is the biggest hidden cost of in-house accounting?
The most frequently overlooked costs include recruitment and staff turnover, software, training, cover, maintaining IT infrastructure, process management and management time spent supervising the department.
What are the advantages of accounting outsourcing?
The main advantages are scalable service, reduced risk associated with one person’s absence, access to a broader team of specialists, use of modern technologies and a more predictable cost model.
Can an accounting firm replace an internal accounting department?
In many SMEs, yes. Outsourcing can cover a substantial portion of accounting, tax and HR processes. In larger companies, however, a hybrid model often works well, with some finance functions remaining within the organisation.
When is it worth creating an internal accounting department?
An internal department may be justified primarily in large organisations with complex, unusual processes requiring the finance team’s daily involvement in business operations.
Does outsourcing accounting reduce the risk associated with holidays and sick leave?
Yes, if the service provider works as a team and has suitable cover procedures. The company’s settlements then do not depend solely on one person’s availability.
Can accounting outsourcing include KSeF and automation?
Yes. Modern accounting firms can handle electronic document workflows, integrations with business systems, KSeF-related processes and automation of some accounting work. The precise scope depends on the selected provider.
How do you compare the cost of an accounting firm with in-house accounting?
You should compare not just the monthly subscription with an employee’s remuneration, but the total cost of both models. For the internal department, include salaries, employer costs, software, equipment, training, recruitment, cover, management, specialist advice and the risk of errors and turnover.
What should a small business choose: an employed accountant or an accounting firm?
If the business does not require an accountant’s daily presence and wants cost flexibility, outsourcing is often worth considering. Before deciding, however, compare the service scope, communication, technology, responsibility and expertise of the team serving the company.
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