Should I hire an accountant or outsource accounting?

The vacancy is usually written before the requirement is. This article sets out what a finance function actually consists of, what an employed hire really costs once it is loaded properly, and why most Caribbean businesses end up with a hybrid rather than a choice between the two.

IN SHORT

The choice is not between a person and a provider. It is between assembling a finance function out of individual hires and buying one that already exists — with defined outputs, a fixed calendar, written process, enforced segregation of duties and cover for absence. A hire is a capacity decision that must be taken again every time the business grows or the person leaves. A finance function is a scope decision, and scope is easier to change than staff.

SECTION 1

The pattern

The vacancy is almost always written before the requirement is.

Something has gone wrong — the filings are late, the bank has asked for management accounts, the bookkeeper has resigned — and the response is immediate and unexamined: we need an accountant. A job description is assembled, usually by listing what the last person did. Applications are reviewed against that list. Somebody is hired. For a period of months, the queue shortens.

Then it lengthens again. The business has grown, or the new person has discovered the same workarounds the old one used, or the statutory deadlines have collided with the reporting deadlines in the way they do every quarter. And the conversation begins again: perhaps we need a second one.

The error is upstream of the hire. A job description describes a person. What the business actually needs is a product — a defined set of things produced, to a defined standard, on defined dates. Very few owners have ever written that second list down, which is why the first one keeps having to be rewritten.

Three quite different things are being bought under a single heading, and they have almost nothing in common:

Processing capacity. Coding, matching, reconciling, filing. High volume, low judgement, entirely systematisable, and the thing that consumes most of the hours in any finance department.

Technical judgement. How a transaction should be treated, what a standard requires, whether a position will survive an assessment or an audit. Low volume, high consequence, needed unpredictably.

Commercial advice. What the numbers mean, what to do about them, how to fund the next twelve months. Rare, expensive, and the only one of the three the owner actually experiences as valuable.

A single hire is asked to supply all three. Almost nobody is good at all three, and the ones who are do not stay in a one-person department. So the business quietly gets whichever of the three the person happens to be strongest at, and the other two are absorbed — usually by the owner.

The test of a finance function is not who works in it. It is what comes out of it, and on what date.

SECTION 2

The Caribbean variant

 

The build-versus-buy question is universal. Six regional conditions push the arithmetic decisively in one direction.

A qualified market that is thin and getting thinner. The pool of qualified finance professionals in any single territory is small, and the most capable are actively recruited by larger firms, by regional groups and by employers abroad. Competing for that person is not a one-time cost; it is a permanent salary escalation, and it renews every time somebody makes an approach.

Departments of one. A business of forty or eighty staff typically has a single finance person. That means no segregation of duties, no review, no cover for illness or leave, and no second reader for anything. The risk is not usually dishonesty. It is that an ordinary error has nothing standing between it and the financial statements.

Loyalty substituting for process. Many small finance functions here are staffed by someone who has been with the family for twenty years and is entirely trustworthy. That is a real asset. It is not a process, it does not transfer, and it makes the eventual succession conversation harder rather than easier.

Qualification as an exit ramp. Businesses invest in study leave and examination fees for staff who, on qualifying, are immediately worth substantially more than the employer can pay. The training is genuinely worthwhile and the departure is entirely rational. Both are true at once.

Statutory complexity multiplied by territory. A group trading in four jurisdictions has four payroll regimes, four filing calendars and four sets of penalties. Expecting one person to hold all of them accurately is not a staffing plan; it is an exposure.

No bench to hire from at short notice. When the single finance person leaves, the recruitment cycle runs for months and the handover period is usually two weeks. Whatever was in that person’s head and not in writing leaves with them.

None of this argues that internal finance staff are unnecessary. It argues that a business which needs a finance function should not be forced to solve a regional labour-market problem in order to obtain one.

SECTION 3

What it costs

Comparison is usually made between a salary and a monthly fee, which is the wrong comparison and flatters the hire considerably. The figures below are indicative, drawn from advisory experience across the region rather than from survey.

The loaded cost, not the salary. Statutory contributions, leave, recruitment, training and study support, equipment, software licences, supervision and workspace commonly bring the true cost of an employed finance person to between 1.35 and 1.5 times the headline salary. The fee comparison should be made against that number, not against the salary line.

The months before productivity. Recruitment typically runs three to six months, and a new finance hire is rarely producing reliably before month three or four. On a first hire that is most of a year in which the problem that prompted the hire is still present.

The single point of failure. A department of one has no segregation of duties. Preparation, approval and reconciliation sit with the same person, which is the control weakness auditors, lenders and insurers all identify first, and the one most likely to be priced.

The cost of turnover. Departure disrupts six to nine months of output — the notice period, the vacancy, the recruitment, the learning curve — and the undocumented knowledge does not come back. Businesses that have been through this twice usually describe the second time as worse.

The owner’s time. The cost nobody records. Where there is no reviewer, the owner becomes the reviewer, checking work they are not best placed to check, at the most expensive hourly rate in the business, in the evenings.

A hire is a fixed cost carrying a variable output. A bought function is a variable cost carrying a fixed output. The second is the one you can plan around.

SECTION 4

What the capability actually does

What is a finance function, specified as a product rather than as a set of people? Nine things, and none of them is a person.

A defined output set. Not “maintain the books” but a named list: the monthly management pack and what is in it, the statutory filings and their dates, the reconciliations performed and by when, the year-end file prepared to audit standard. The list is agreed at the start and is the thing delivery is measured against.

A calendar rather than availability. Work happens on dates, not when capacity allows. Days one to three capture and match; days four to six adjust and review; days seven to nine report and advise. A busy month does not move the dates, because the capacity absorbing the busy month is not a single person’s week.

Process held in writing and in the system. The chart of accounts, coding rules, approval matrix and close checklist exist as documents and as platform configuration. They are not a set of habits in somebody’s head. This is the single largest difference between a function and a hire, and the one that only becomes visible when somebody leaves.

Segregation of duties enforced by permissions. Preparation, review and approval are separated by system roles rather than by good intentions. The person who codes a payment cannot release it. The trail exists whether or not anyone thinks to create it.

Cover as a standing condition. A named engagement manager and a named reviewer, both of whom know the file. Illness, leave and resignation are absorbed inside the provider rather than transmitted to the client. There is no fortnight in which nothing is reconciled.

Capacity that scales with volume, not with headcount. A thirty per cent increase in transactions is a scope adjustment, not a recruitment exercise. Growth stops being the thing that breaks the finance function, which is otherwise its most reliable behaviour.

Technical depth on call. A GCT treatment question, an IFRS classification, an assessment from the tax authority, a lender’s covenant definition — answered by someone who does that specific thing regularly, rather than researched at speed by a generalist who will not meet the question again for two years.

Work performed at the right level. Processing at processing cost, judgement at judgement cost, advice at advisory cost. In a single hire all three are paid at one rate, which means either the processing is expensive or the judgement is absent. Usually both.

The platform as institutional memory. Every transaction carries its supporting document, its coding rationale, its approver and its date. The history of how this business has been accounted for is in the system rather than in a person, which is what makes it survivable.

None of these nine is unavailable to an internal team. They are simply expensive to build once, for one business, and they are the first things abandoned when the department is busy.

SECTION 5

How the Accounting Services BPO Division delivers it

 

The engagement is scoped as a product, and the sequence matters.

The output list comes before the fee. The Finance Function Diagnostic establishes what must be produced, for whom and by when, before any discussion of price. A proposal that quotes a fee without that list is quoting for hours, which is the arrangement being replaced.

Two named people, minimum. Every engagement carries a named engagement manager and a named reviewer. That is not a service nicety — it is what creates the segregation of duties a department of one structurally cannot have.

A written division of labour. Your office retains approval of payments and payroll, pricing and credit decisions, authorisation of new customers and suppliers, and banking mandates. The division performs processing, reconciliation, the payables and receivables cycles, payroll computation, statutory filings and the close. Nothing is assumed on either side.

Existing staff are usually repositioned, not replaced. The common outcome is not redundancy. The internal person moves to the work that genuinely needs presence — credit control, supplier relationships, stock, the front desk — and stops spending three weeks a month on data entry. That is frequently the highest-return change in the whole engagement.

Escalation is built into the fee. Technical and advisory input is drawn from the firm’s tax, audit-readiness and corporate finance capability as questions arise, rather than commissioned as a separate engagement each time.

Stated service levels. Nine days to close and issue. Forty-eight hours maximum response on any finance query. Quarterly scope and service review as volumes change.

Exit terms agreed at the outset. The ledger, the documents and the history are yours, exportable in standard formats, and the platform subscription transfers to you or to another provider. A function you cannot leave is not a service; it is a dependency.

SECTION 6

Where to start

In the next thirty days. Write the output list. Not the job description — the list of what must be produced, for whom, and by what date each month, quarter and year. Then price the current arrangement properly: loaded employment cost, plus software, plus the external accountant’s annual fee, plus an honest estimate of the owner’s own hours. Most businesses have never seen those two lists side by side, and the comparison usually settles the question without further analysis.

In thirty to ninety days. Separate the three layers. Decide which parts genuinely require presence in the building and which do not. Cash handling, stock counts, supplier relationships and customer credit conversations often do. Coding, reconciliation, payroll computation and statutory filing almost never do. The line you draw here is the scope of what you buy.

Beyond ninety days. Most mid-market businesses in this region end up with a hybrid rather than a wholesale outsource — one internal person doing the work that needs presence, with the function around them bought as a service. That arrangement is usually cheaper than the single hire it replaces, and it is the one that survives a resignation.

The question to put to any proposal, internal or external: if this person were unavailable for a month, what would stop? If the honest answer is “everything”, you have not bought a finance function. You have hired a single point of failure.

 

REFERENCE

Frequently asked questions

Should I hire an accountant or outsource accounting?

Compare the loaded cost of employment — typically 1.35 to 1.5 times salary once statutory contributions, recruitment, training, software and supervision are included — against a fixed monthly fee for a defined output set. For most businesses under roughly a hundred staff the outsourced function costs less and delivers more, principally because it supplies cover, segregation of duties and technical depth that a single hire structurally cannot.

Will we lose control of our finances?

No. Approval authority, banking mandates and signing rights remain entirely with the client. The division prepares and processes; the client releases. Because approvals are enforced by system permissions rather than by habit, most businesses end up with more control than they had, and a record of it.

Do we have to make our current bookkeeper redundant?

Usually not, and it is rarely the best outcome. The common arrangement is to move that person onto work that needs presence — credit control, supplier and customer relationships, stock — while the processing, reconciliation and close move to the division.

What if we grow, or acquire another entity?

Volume and entity changes are scope adjustments reviewed quarterly, not recruitment exercises. This is the practical advantage of buying capacity rather than hiring it: growth changes the fee rather than breaking the function.

Who is accountable if something goes wrong?

The engagement carries a named engagement manager and a named reviewer, with stated service levels and defined responsibilities on both sides. Directors remain responsible for the financial statements in every case — outsourcing the work never outsources that duty, and any provider suggesting otherwise should be treated with caution.

Is an outsourced finance function acceptable to lenders and auditors?

Generally yes, and often preferred. Both look for evidence: reconciliations performed on a schedule, approvals recorded, supporting documents attached, duties segregated. Those are easier to demonstrate in a documented, system-enforced function than in a department of one.

 

NEXT STEP Request the Finance Function Diagnostic A 45-minute scoping conversation covering volumes, systems, entities, close cycle and reporting needs; a written recommendation on tier, scope, division of labour and transition plan; and a fixed-scope service proposal priced by process, with service levels and exit terms stated. Contact us : Dawgen Global · Accounting Services BPO Division: [email protected]  ·  dawgen.global/contact-us

 

Continue reading: “Your books are ready in March. Your decisions were needed in January.” · “The bookkeeper who leaves takes the system with her.” · “Who does what: dividing the work between your office and ours.”

Indicative figures are drawn from advisory experience across the region and are not survey output.

About Dawgen Global

Dawgen Global is an independent, integrated multidisciplinary professional services firm headquartered at 47 Trinidad Terrace, New Kingston, Jamaica, serving more than 15 territories across the Caribbean. Founded and led by Dr. Dawkins Brown, Executive Chairman, the firm is independent and not affiliated with any international network. It delivers a full suite of professional services under one roof: audit and assurance; tax advisory; IT and digital transformation; risk management; cybersecurity; actuarial and insurance regulatory advisory; HR advisory; mergers and acquisitions; corporate recovery; business advisory and strategy; accounting BPO and virtual CFO services; and legal process outsourcing.

The proposition is simple: big-firm capability without the big-firm price. Dawgen Global’s integrated approach is built for the specific complexities and opportunities of the Caribbean market, helping organizations make sharper, better-informed decisions that drive measurable progress.

To explore a partnership, reach out:

• Website: dawgen.global
• Email: [email protected]
• WhatsApp (Global): +1 555-795-9071
• Caribbean offices: +1 876-665-5926 | +1 876-929-3670 | +1 876-926-5210