Hiring vs Outsourcing Accounting: What AAT Students and UK Businesses Should Understand

BenWatkins

If you’re studying AAT or advising UK businesses, one decision you'll often encounter is this:

Should a business hire an in-house accountant or outsource their accounting to a specialist firm?

This question is more relevant than ever – especially with the rise of cloud-based accounting, compliance complexity, and the growing demand for financial efficiency in SMEs.

As an AAT student, affiliate, or full member, understanding this decision can help you:

1. Support employers or clients better
   
2. Build a career plan around industry trends
   
3. Prepare for roles in both practice and industry
   

Let’s break down the key considerations that impact cost, control, and confidence.

💷 1. Cost Breakdown: What Do Businesses Actually Pay?
In-house accounting costs aren’t just salaries. They include:
Employer’s National Insurance
Pension contributions
Software licences (Sage, Xero, etc.)
Training and CPD
Holiday cover or temporary staff
Recruitment and retention costs

A single hire can easily cost £40,000–£60,000+ per year when fully loaded.
Outsourced accounting often comes with fixed monthly packages, ranging from:
£200–£400/month for bookkeeping
£500–£2,000/month for full finance function support


📊 2. Control and Transparency: Is In-House Always Better?

In-house staff give business owners a sense of control – they’re on-site, visible, and available. But this can be misleading:

1. If they go on leave, what’s the backup plan?
   
2. Can one person handle VAT, payroll, year-end, and forecasting?
   
3. What if they fall behind or make errors?
   

Outsourced providers, especially cloud-based firms, offer:

1. Real-time reporting via platforms like Xero, QuickBooks, or FreeAgent
   
2. Secure client portals and live dashboards
   
3. SLAs and scheduled review calls
   

Many firms gain control through outsourcing – by removing bottlenecks and ensuring deadlines are met.


🧠 3. Expertise and Continuity
In-house hires have one set of experiences – and they need continuous CPD to keep up with regulations (MTD, payroll, CIS, etc.).

Outsourced teams offer:
Multiple specialists (bookkeepers, payroll experts, tax advisors)
Built-in training and compliance
Structured processes and oversight

For AAT professionals, this means career opportunities in firms that offer outsourced services are growing – from entry-level to senior advisory roles.


📈 4. Scalability and Growth Support
As businesses grow, financial needs change. Hiring more staff internally takes time and budget. Outsourcing allows:

Quick scaling of services
Immediate access to reporting and cashflow forecasting
Support with funding, VAT inspections, and R&D tax credits

AAT members working in outsourcing firms often gain exposure to a variety of industries – something not always possible in-house.


🎓 Final Thoughts for AAT Members and Students
If you’re training towards your AAT qualifications or working with UK SMEs:

Learn both sides: in-house processes and outsourced workflow
Stay up to date with cloud accounting software and automation tools
Build advisory skills – because strategic input is now more valuable than manual data entry

Outsourcing isn't about replacing jobs – it's about reshaping roles. And as an AAT-qualified professional, you're in a prime position to lead that change.