Outsourcing vs. Automation: Which is the Best Solution for Reducing Finance Department Costs?

Prothom
May 15
4 min read

Updated: May 18

Introduction

In today’s fast-moving business world, every dollar matters—especially when it comes to managing back-office operations like finance and accounting. For many business owners, the finance department is a critical but also costly part of the business. As companies grow, they often struggle with increasing overhead, outdated processes, and the constant pressure to "do more with less."

That’s where two popular solutions come into play: outsourcing and automation.

Should you hand over your financial processes to experienced professionals outside your company (outsourcing)? Or should you invest in technology that can handle repetitive tasks automatically (automation)? The answer isn’t always black and white.

At Mr-Accountants, we help businesses around the world simplify, streamline, and strengthen their finance operations using a mix of both strategies. In this blog, we’ll explore the pros and cons of outsourcing and automation—and help you decide which is the better fit for your business.

What is Finance Outsourcing?

Outsourcing means hiring an external expert or firm to handle specific financial tasks instead of hiring full-time employees. This can include bookkeeping, payroll, tax filing, financial reporting, and even CFO-level advisory services.

Examples of outsourced finance tasks:

Bookkeeping and general ledger maintenance
Payroll processing
Accounts payable and receivable
Tax preparation and filing
Financial reporting
Budgeting and cash flow forecasting

By outsourcing, businesses get access to skilled professionals without the costs and commitments of hiring a full in-house team.

What is Finance Automation?

Finance automation uses software tools to perform repetitive, rule-based tasks without human input. It eliminates manual data entry and streamlines workflows across the finance department.

Popular finance automation tools include:

QuickBooks/Xero – for automated bookkeeping
Gusto – for automated payroll
Bill.com – for invoicing and payments
Expensify – for expense management
Zapier/Make – for connecting different apps and systems
ERP systems (like NetSuite, Zoho Books, or Odoo) – for managing the entire finance function

Once set up, automation can work 24/7, process large volumes of data quickly, and reduce the chance of human error.

Cost Comparison: Which One Saves More Money?

✅ Outsourcing:

You pay only for the services you use.
There is no need to spend on employee benefits, office space, or software licenses.
Ideal for startups and small to medium-sized businesses looking to save on hiring costs.

Example: Hiring a full-time bookkeeper in the US could cost $50,000+ annually. Outsourcing the same function to Mr-Accountants can reduce that cost by up to 70%.

✅ Automation:

You pay upfront for software and setup.
Long-term savings as manual work is eliminated.
Minimal ongoing costs if processes remain stable.

However, automation often needs human support to handle exceptions, monitor systems, and interpret financial results.

Efficiency and Accuracy

✅ Outsourcing:

Real people handle complex scenarios with judgment and experience.
Great for businesses that need accurate compliance with tax laws and financial regulations.
A good outsourcing partner will alert you to problems and help solve them proactively.

✅ Automation:

Perfect for routine, high-volume tasks like invoice processing or bank reconciliation.
Less prone to data-entry errors.
Delivers consistent output and real-time processing speeds.

However, it may struggle with one-off situations, unstructured data, or changing regulations.

Flexibility and Scalability

✅ Outsourcing:

Easy to scale up or down depending on workload (e.g., during tax season).
No need to hire or train new staff.
At Mr-Accountants, we offer on-demand support based on your monthly needs.

✅ Automation:

Once systems are in place, you can process 10 or 10,000 transactions at the same cost.
Highly scalable and fast.
Great for growing businesses with stable, repeatable processes.

Control and Oversight

✅ Outsourcing:

Some business owners worry about losing control.
With the right partner (like Mr-Accountants), you stay in the loop through dashboards, regular reports, and direct communication.
You retain ownership of your financial data.

✅ Automation:

Keeps everything in-house.
Gives you full control over who sees what and how things are done.
Requires someone in your team to monitor the system and resolve any issues.

Compliance and Risk Management

✅ Outsourcing:

Finance professionals stay updated on local laws and accounting standards.
Helps you avoid costly mistakes in tax filing, reporting, and audits.
Adds a layer of protection and expertise.

✅ Automation:

Reduces the chance of human errors.
Standardizes processes for easy auditing.
Provides digital trails for accountability.

However, automation tools still need human oversight to ensure compliance with new rules and complex situations.

Which One is Right for You?

Let’s make it simple:

✅ Choose Outsourcing if:

You want professional expertise without hiring full-time staff
You’re growing and need flexibility in services
You don’t have the time or in-house team to manage finances
You want advisory support along with basic accounting tasks

✅ Choose Automation if:

Your processes are repeatable and rule-based
You’re tech-savvy or have IT support
You want long-term cost savings
You prefer in-house control over your systems

Or… Choose Both: The Hybrid Model

Why not get the best of both worlds?

Many of our clients at Mr-Accountants use a hybrid model. We help them:

Set up automation tools to reduce manual work
Outsource complex tasks like financial reporting, tax strategy, or audit preparation

This gives them efficiency, control, and expert support—all at a fraction of the cost of building an in-house team.

Conclusion

Choosing between outsourcing and automation doesn’t have to be a tough decision. The key is to understand your business needs, current resources, and future goals.

If you want to scale quickly with expert help, outsourcing is your best bet.
If you want to invest in long-term efficiency, automation is the way to go.
If you want both speed and strategy, the hybrid approach offers the perfect balance.

At Mr-Accountants, we specialize in helping businesses reduce finance department costs through customized solutions. Whether you need expert support, automated systems, or a blend of both—we’re here to help.

🚀 Let’s Reduce Your Finance Costs—Together. Reach out to us today and discover the smartest way to manage your finances without breaking the bank.

Visit Our Website