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Breaking Down the Differences: In-House Accountants vs Virtual Accountants

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Published: July 18, 2024
Last Updated: March 5, 2025

With the changing landscape around us, businesses can not only connect to the world but also get access to all kinds of information, learn new skill sets, and even carry out business transactions. On top of it, with technological advancement and the rise of automation, businesses can now work more efficiently and cost-effectively. One such example is the rise in popularity of virtual accountants, who can be someone working for you from anywhere in the world, and this is one effective way of reducing costs. The decision between hiring an in-house accountant and opting for a virtual accountant is pivotal. As businesses strive for efficiency and cost-effectiveness, understanding the nuanced differences between these two options becomes crucial. This blog aims to dissect these roles to aid business owners and decision-makers in choosing the most suitable accounting solution.

Who are In-house Accountants and Virtual Accountants?

An in-house accountant is a salaried employee who handles the financial operations within the company’s premises. Their tasks typically include bookkeeping, preparing financial statements, managing payroll, and ensuring compliance with tax laws. A virtual accountant provides similar services but operates remotely, often as part of an outsourced firm. This model leverages technology to deliver services like tax preparation, financial reporting, and advisory services without being physically present in the company’s office.

Quick Read: Explore the evolving landscape of financial management through our blog “A Guide on Virtual Accountant: Why Your Business Needs One?”. Delve into the myriad benefits, understand the inherent challenges, and equip yourself with essential knowledge for integrating virtual accountants into your business operations.

Difference Between an In-house Accountant and a Virtual Accountant

Basis of Differentiation	In-house Accountant	Virtual Accountant
Location	Gets the work done sitting at a desk in your business office	Get their work done online from the location of their choice.
Recruitment Process	The recruitment process for an in-house accountant is your responsibility, and to do so efficiently, you must screen them properly. But if you are not an accounting expert, this process will be a problematic one.	If you are hiring a virtual accountant service from an outsourced accounting services provider, they will be responsible for the selection of the right virtual accountant for you. Service providers are a better judge of the expertise of accountants as they have extensive experience in doing so.
Quality	The quality of work is dependent on your recruiting skills. Just in case you hire someone who lacks any skills that you need in your accountancy, you cannot expect high-quality work and, at some point, may witness some inefficiency.	After the right selection of accounting service provider, you will rarely find any issue with quality as long as you communicate your requirements accurately.
Accounting on-the-go	There is accounting software that makes the accounting process a breeze for most businesses. However, due to some reason, if businesses can’t invest in software, it is difficult to get access to accounting information.	Virtual accountants always work on cloud-based software, which makes it easier to access financial data from any device and any location.
Paperwork	Conducting accounting traditionally by an in-house accountant without accounting software leads to a mountain of paperwork to work with. Keeping track of all this paperwork and maintaining the physical books can turn out to be challenging and time-consuming.	Virtual accountants conduct accounting using popular accounting software. This makes it easier to maintain and update all financial details easily with minimum use of paperwork.
Growth & Downsizing	Hiring or firing human resources is easier said than done, and there are restrictions in terms of other variables that can’t be downsized or increased as per the dynamic requirement.	Growth or downsizing is an ease in terms of a virtual accountant. Here, you can increase or decrease the number of virtual accountants working for you without the stress of infrastructure needs.
Industry Knowledge	When hiring an in-house accountant, you must ensure that they have prior work experience in the same industry; otherwise, the expense and time invested in training will be significant.	You can choose from a wide array of virtual accountants who have worked for diverse industries or virtual accountants who specialize in your industry.
Training	It is your responsibility to ensure that your accountant is regularly trained to help you stay current and meet your financial requirements.	Virtual accountants generally work with different businesses, and it becomes their responsibility always to be trained, as this makes them more demandable for companies.
Cost	A full-time in-house accountant can cost you about $70,000 for a year, which is exclusive of overhead costs. Superannuation, contributions to employee retirement schemes, fringe tax, child support, employee income tax, office space, IT system, and similar overhead costs can add up to about 20% of the base salary.	Virtual accountants are not your employees; instead, they are contractors providing accounting services, and thus, overhead expenses are not incurred when you hire a virtual accountant. You can hire virtual accountants from Whiz Consulting for as low as A$3000 a month.
Confidentiality	Accounting involves a lot of sensitive financial information. With an in-house accountant, you have better accountability if there is a leak in any financial information.	It is crucial to hire a trustworthy and reliable virtual accountant whom you can trust. Also, don’t forget to sign a non-disclosure agreement to safeguard your business’ financial information.

Are you ready to explore how a Virtual accountant can benefit your business?

Choosing between an in-house accountant and a virtual accountant hinges on understanding each option’s inherent benefits and constraints. While in-house accountants provide familiarity and immediate accessibility, virtual accountants offer flexibility, cost-efficiency, and access to a broader range of expertise. This decision must not only reflect your current business needs but also anticipate future growth and technological trends. With the right approach, virtual accounting can transform your financial management and operational efficiency dramatically.

We recommend conducting a thorough assessment of your financial operations to determine which accounting practices are best suited to your needs. Don’t hesitate to reach out to reputable virtual accounting firms. Engaging with a professional can provide personalized insights and recommendations tailored to your business model and industry. Contact a virtual accounting firm today to see how they can help streamline your financial processes, reduce overhead costs, and provide scalable solutions that grow with your business.

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