For many medium-sized companies, accounting and payroll are essential but time-consuming parts of operations. A common question many business leaders ask themselves is: Should we handle it internally, or is it more cost-effective to outsource to an external accounting firm?
The choice between in-house and outsourcing should depend on your company’s size, complexity, level of expertise required, and cost considerations. It’s important to keep in mind that the choice will significantly impact the company’s costs, flexibility, and level of control. In this article, we explore the pros and cons of both approaches to help you make an informed decision.
The Benefits of Outsourcing Accounting and Payroll
Hiring an in-house accountant means fixed salary costs, employer’s contributions, holiday pay, pension obligations, and potential training expenses. When you outsource, you only pay for the time and expertise you actually use. For medium-sized businesses, this can often be both more flexible and cost-effective.
An accounting firm typically consists of specialists in bookkeeping, payroll, VAT, and year-end reporting. This gives you access to an entire team – without needing to hire several internal employees. Professional accountants are also up to date on current laws and regulations, with strong internal quality control routines. This lowers the risk of errors and misunderstandings, helping you avoid extra work, penalties, or issues with the Norwegian Tax Administration.
The Downsides of Outsourcing
When outsourcing, you give up some of the day-to-day insight into your finances. You become more dependent on strong communication and availability from your accounting partner. At Leinonen our standard response time is 24 hours – often faster in practice, but some waiting time should be expected.
Some firms also operate with standardized processes. If your company has specific needs or industry requirements, it can be more difficult to get tailored solutions without incurring extra costs.
The Benefits of Keeping Accounting and Payroll In-House
Having an internal accountant gives you continuous access to up-to-date financial information and the ability to get quick answers. This provides flexibility and control – especially important for companies that require fast decision-making.
An in-house employee knows your company, culture, and industry – and may offer more tailored advice than an external provider.
The Downsides of an In-House Solution
An in-house accountant is often more expensive, especially when you include social costs, software, training, and sick leave. If you only have one person in this role, their absence can create significant challenges – particularly around VAT or year-end deadlines.
Accounting and tax legislation change frequently. Maintaining in-house expertise requires continuous investment in training and professional development.
What Should You Choose?
Outsourcing is best suited for: medium-sized businesses with up to 20 employees and relatively straightforward accounting needs. It provides predictable costs and broad expertise without the need to build an internal team.
In-house solutions are ideal for: larger companies, groups, or businesses with complex operations and a need for continuous financial advice and close follow-up. Here, immediate availability and detailed insight are often essential.
In many cases, a hybrid solution may be the most suitable. For example, you might handle invoicing and basic bookkeeping internally, while outsourcing payroll, VAT reporting, and the year-end accounts. What matters most is finding a setup that provides confidence, insight, and control over your finances – without compromising on cost-efficiency or flexibility.
Get in Touch
Are you considering outsourcing your accounting or payroll? We’re happy to help you assess what’s most efficient and cost-effective for your business – whether it’s a full accounting solution, just payroll, or a tailored combination. We have extensive experience working with medium-sized companies across a range of industries and know what it takes to build a successful partnership.
Get in touch – and let’s find a solution that works for you.
