Accounting office or an in-house accountant?
If you are considering how to organize yours accounting, the below text may help you.
I. What ‘accounting’ actually is?
The common understanding of accounting it is a financial service equalized with bookkeeping for the company.
In the fact, the focus of this service isn’t the registration of accounting documents in suitable tools, but the wider professional financial servicing of the company. It consists of: payroll, depreciation, duties, taxes, preparation of tax returns, Social Security statements, financial reporting, tax consulting and comprehensive settlement of budgets.
As far as the complexity of the process is concerned, in the age of universal computerization accounting of all business operations is not a primary concern. The principles of bookkeeping have been established in detail a long time ago and they aren’t altered too often. If we were to consider only tracking the financial evidence, the basis of that work would be similar in the accounting department of a small or medium-sized company, as well as in accounting office. In such a case, the choice of running accounting in-house or acquiring the services of an accounting office would be of no consequence.
However, when considering the broader spectrum of financial services, an accounting office is better equipped to deal with financial accounting cases and has broader means of following changes and interpretation of financial law.
II. Larger accounting companies
Larger accounting companies cooperate with at least a few dozens of customers at the same time. It is only natural that with such a number of companies, there is a variety of industry and some of the the largest supported companies may be involved in several branches of industry. This sees the accounting office in contact with different types and forms of economical activity on a regular basis and allows it insight into the organizational legal and register-accounting specificity of many industries, types and forms of activity present in Poland. In this way the accounting office employees rapidly receive a great range of professional experience, enabling them to handle different individual customers.
Not without significance is the fact that the company that has its own in-house accounting team is submitted to financial review only once every few years, if at all. An accounting office representing its clients receives such reviews relatively often. After some time it develops certain accounting techniques enabling it to act out of experience in the best interest of the customer and the company.
The accounting office resolves most of a companys current specific problems – fixed assests (roll, adding to the cost of revenue, taxation) – salaries and other settlements with employees – accounts of Social Security – local taxes – value added tax – income tax on natural persons and legal entities – accounting cost activities, taking account of the cost associated with settlement production – tax reporting – reporting Main Statistical Office (MSO).
In addition to supporting such a large number of companies, an accounting office is forced to:
– Have an adequate number of professionals which allows you to create stations and even specific groups, ensuring proper customer service;
– Work with other accounting offices to share experiences;
– Contact daily with the tax offices, Social Security and MSO;
– Subscribe to the basic legislative acts and professional literature to keep the current understanding of the frequently changing legislation and its current interpretation;
– Improve their skills by taking part in the training industry.
Every day our accounting office responses for dozens of questions and concerns raised by customers becoming for many of them the first and easily accessible source of information on many topics.
Given the abundance of regulations governing the conduct of business in Poland , accounting offices certainly something to be considered by small- and medium-sized companies that cannot afford to hire in-house financial and accounting teams. When hiring one or two people, the owners of these companies would have to be very lucky to retain employees well-versed in the issues of employment, labor and social security benefits, as well as wages, benefits, settlement of social insurance, VAT, income tax, the Central Statistical Office reports, etc.; From experience, we know that the acquisition of such 'all knowing' employees is quite difficult and very time-consuming, because the employment of professionals almost always requires notices and ads in the press, the collection offers, direct talks with the candidates. The interviewer, to be able to correctly assess the suitability of a candidate for a specialist position, has to devote sufficient time to prepare for the interview himself. Conversations with several candidates for one position sometimes take several weeks.
Employing a specialist in the field of accounting and finances, even for a trial period, does not always protect the interests of the company. The substance of the candidate’s suitability test usually takes place only during the next financial or accounting audit. Sometimes this delayed verification of employed staff can be quite expensive for the company.
Employing only one or two people to deal with finance and accounting creates problems with replacement during the holidays or a sudden illness.
The organization of a company’s own accounting department will see it need to purchase and subscribe at the very least some publications and professional journals to ensure timely access to current organizational and legal norms in the field of investment, production accounting, trade, warehouse management , employment, wages, taxes, duties, accounting, reporting, etc. This results in inefficient use of resources (the accumulated literature and software is available to only one or two people), and it doesn’t guarantee that with the sheer volume of our duties the employed accountant will find time to track all the changes.
III. The costs of each of the solutions.
Another issue, already hinted at aboveis the cost of each of the alternatives.
In the case of an accounting office the case is simple – the monthly fee iseither fixed or is a variable dependent on the terms of the contract, generally not exceeding the remuneration of a quality specialist. The matter is entirely different in the case of in-house accounting. You should consider the need to incur one-time expenses for purchase of equipment (office equipment, computers, software) and fixed costs related to salaries, social security contributions and rental of additional office space and as mentioned earlier, the cost to provide current legal information necessary for the effective work of the accountant.
Also, the financial responsibility for any errors is distributed differently in both cases . In the case of an accounting office, the customer can request repair to any damage caused by the agency – regardless of their amount (required to have liability insurance).The material liability is limited by the worker legislation Article 119 and 120 of the Labour Code, to the amount of a triplicate monthly salary, unless the damages were caused intentionally.
IV Criteria for the selection of the accounting office
If, having considered the reasoning presented above, you have made a decision to entrust your accounting books to an office, there remains only the dillema of choosing the right office, which will give you the guarantee of reliable service. Although there is no way to become 100 % sure, you may at least check the formal basis of the accounting office’s existence and collect the opinions of the office’s customers. Therefore, there should be no problem in gaining access to the following documents – an entry in the business register or an extract from the Commercial Register; a certificate TAX; a confirmation of the VAT registration; the professional certificates of the providing bookkeeping services to the Office; or confirmation of entry on the list of tax advisers and confirmation of the existence of a consultant contract for the Office’s liability insurance.
If you would like more information on the formal basis of accounting services and tax advice, please refer to the Accounting Act and the Act on taxation advisory. It is only when you find that the Office can legally provide their services, you can ask for a reference list of customers operating in a scope similar to your company, toinquire after their opinion. The next step should be to familiarize yourself with the terms of the agreement proposed by the Office. Only after such preparation should you begin negotiating individual terms of the contract.
Very often customers focus on obtaining the lowest price, not paying due attention to precise determination of the responsibilities on each page. And it is undeniably a most important issue. Especially in the case of tax matters, the taxpayer (the customer!) ALWAYS BEARS RESPONSIBILITY TO BODIES OF TREASURY for the proper conduct of the records and tax calculation. Agents who claim that they automatically take that responsibility off their custiomers' shoulders are simply acting unfairly. Negligence or a mistake of the Office can only be the basis for an investigation towards appropriate compensation after the fact.
However, despite the obvious advantages of entrusting books to a specialist entity, it is not a solution fit for every company.
V. Final considerations
Who then should from the beginning be set to organize the company’s own financial and accounting services? In fact, it is only the large companies for which the cost of the organization and maintenance of an at least five-strong department, along with the employment of suitably trained and experienced staff is a small enough fraction of the total costs incurred and for whom the benefits arising from the possibility of obtaining information about the status with a delay of only a few hours are disproportionately high. An accounting office, depending on the way it’s organized, is able to provide this information at a pace it receives and records the documents of the customer, which for most companies is perfectly adequate. Obviously, advice and answers to questions will be dealt with on an ongoing basis, over the phone or via email.
In our Office there’s a practice that the customer doesn’t have to come with the documents to our office. Our staff takes care of it. They receive all documents from our customers, at their place of business. The customer is exempt from contact with the Tax or Social Security offices, while we act on his behalf.
A relatively new form of cooperation is the option to perform all customer service related activities in the company’s office. Despite the higher price it incurs, it is a solution that combines the benefits of hiring an employee (both the contractor and the documents are in place) and removing the drawbacks of the Labour Code (social security contributions, as the accounting office does require any leaves, as well as maternity, parental or sickness benefits ).
If after the analysis of the above you would entrust our office with providing our services to your company, please contact us directly, by phone or e-mail.
We are looking forward to hearing from you.
BERATER Accounting Office Warsaw