The decision-making process is common among small companies in the UK. But the real confusion lies in deciding whether to hire their own accountant or outsource to an outsourcing company.
There are numerous advantages to hiring an accountant in-house, including convenience; however, it can be very costly and demanding at times. Meanwhile, outsourcing can be cost-effective, easy, and flexible, while providing opportunities to learn about new industry trends.
AskGroup UK offers accounting services, and their small-business accounting solutions are flexible and affordable, without requiring additional budget.
Why Small Businesses Need Reliable Accounting Solutions
Being an owner of a small business entails many activities, including sales, marketing, and operational processes. And in that realm, accountancy is often neglected. However, neglecting finances may lead to difficulties.
Indeed, according to the Federation of Small Businesses, roughly 20% of small firms fail within the first year of operation in the UK due to inadequate cash flow management.
Accountancy is not limited by mere adherence to laws and regulations; instead, it involves assessing the status quo and determining how to earn profit. Accounting activities include monitoring value-added tax (VAT), processing employee payments, and forecasting cash flow.
Maintaining proper financial records also ensures that HM Revenue and Customs approve of the firm and attract potential investors.
In-House Accounting for Small Businesses
Hiring an internal accountant is a good decision, as they are always available when needed. Let’s understand some of the advantages of in-house accounting services for small businesses:
- Accessibility and Control: They will always be within reach, which means that you won’t have to wait for answers.
- Knowledge about the Company: They will gain an understanding of the company’s operations, including peak times and other factors.
- Integration with the Staff: An internal accountant becomes part of the organization’s culture, helping achieve its objectives and boosting employee morale.
For example, if you own a café in London, they will help adjust menu prices based on daily sales. However, in-house accounting has several major disadvantages too.
- Expensive: A UK-based accountant charges around £35,000-£50,000 per annum. Moreover, other costs include taxes, pension contributions, office rent, accounting software, and training.
- Insufficient Knowledge: Not all accountants specialize in each aspect of financial reporting, such as tax credits and VAT.
Many small firms face hiring difficulties due to costs. If the revenue of your company doesn’t exceed £1 million annually, hiring costs will eat up 10-15% of your revenue.
Outsourced Accounting Services in the UK
Outsourced accounting services in the UK help small companies manage their finances differently. Rather than employing accountants on a permanent basis, you will have professionals who offer their expertise when required.
Organizations such as AskGroup UK provide a range of support, from day-to-day accounting activities to consultancy, using advanced cloud-based technology.
1. Savings and Retention of Control
Outsourcing reduces expenses by 40% to 60%. The charges depend on the level of service required, ranging from £50 to £150 per hour to a flat monthly fee.
AskGroup UK provides packages that evolve alongside your company. There is no additional expenditure, such as benefits packages, recruitment costs, or severance pay.
2. Flexible and Professional Services
With our expertise, you’ll have access to qualified professionals with extensive experience in UK accounting and making tax digital (MTD), and who provide payroll services through the AskGroup UK.
This allows businesses to increase and decrease their service levels as their needs change throughout the year.
3. Technological and Tool Improvements
Outsourced firms use current accounting software and up-to-date forecasting systems. The accounting firms ensure that you have access to your financial information 24 hours a day through easy-to-use dashboards and application interfaces.
Small businesses can benefit from an agile, smarter approach to accounting through outsourcing.
Outsourced Accounting vs In-House: Head-to-Head Comparison
So how do you determine which is best for your company? Let’s understand some key differences between Outsourced Accounting vs In-House that help you make an informed decision.
| Aspect | In-House Accounting | Outsourced Accounting Services |
| Cost | £40K+ yearly | 40-60% savings; £500-£2K/month fixed |
| Expertise | Limited to hire’s skills | Full team: tax, audit, advisory specialists |
| Scalability | Rigid hiring lags growth | Instant scaling, no contracts |
| Availability | 9-5, limited outside hours | 24/7 cloud access, dedicated support |
| Compliance Risk | Higher if skills gap | Low; up-to-date with HMRC/MTD |
| Focus for Owner | Hands-on finance time | Strategic growth |
Key Factors to Consider for Your Small Business Accounting Solutions
The factors in small business accounting solutions include time, expenses, expert advice, compliance issues, and risk management, all of which are crucial considerations when deciding between in-house and outsourced accounting.
1. Stage of Business & Size
If you have a startup, outsourcing could help you save some cash. If your business has been around for some time and is earning more than £500K+, consider which you would prefer: control or cost savings?
2. Complexity of Industry
Certain sectors will need more complicated accounting. E-commerce should handle VAT matters, while construction must manage CIS.
3. Time Investment
If you dedicate 20+ hours per week to finances, outsourcing can help you reclaim those hours.
4. Future Growth
Planning growth rates of your company by 50%? Then it makes sense to outsource the additional work without increasing your employee numbers.
Calculate your costs. Is the cost of maintaining your own team higher than 5% of your revenues? In that case, outsourcing your finances is preferable.
How AskGroup UK Delivers Small Business Accounting Solutions
AskGroup UK has been helping small businesses throughout the UK find the ideal combination between outsourcing their accounts and getting the same advantages as if they had their own finance team since our formation.
We continue to fulfill this original objective by providing small and medium-sized enterprises in the UK with easy-to-use, adaptable financial options.
Our regulated team with the Financial Conduct Authority offers a range of services; these include:
- Fully MTD-compliant solutions using simple, automated accounting systems.
- Hassle-free, compliant payroll services to companies with one employee and up to five hundred employees.
- Assistance through tax strategy & advice to clients to save them money by utilizing available reliefs such as the Seed Enterprise Investment Scheme (SEIS) or the Enterprise Investment Scheme (EIS).
- Accurate, timely & relevant Management Accounts at regular intervals along with KPIs, plus providing clients with access to the latest available data.
Our services are scalable and evolve with your growth, with no commitment period or contract lock-in.
Conclusion
Utilizing outsourced accounting services in the UK can be a beneficial option for a small business in many different ways. Not only are they less expensive than traditional accountants, but they also provide access to a highly qualified pool of professionals and scalable services as the company continues to grow.
At AskGroup UK, our accounting services offer a simple, convenient way for small businesses to manage their finances with peace of mind.
Looking to simplify your business finances?
Contact AskGroup today to discover reliable and cost-effective accounting solutions tailored to your business needs.
