Now that the cloud is here and most accounting work can be done remotely, business owners have an interesting choice to consider.

Do you want to handle your accounting the traditional way, by hiring an employee and trying to do everything in-house? Or would you rather hire an outside accountant or firm on a fractional basis to manage your system and handle most of your accounting functions from day one?

I’ve worked in both roles over the past 25 years, as both an external CPA and an inside Controller, and I can tell you that fractional accounting is hands-down the better strategy for 95% of small businesses. I could give you a dozen reasons why but here are my top five:

Advantage #1: Speed

Outside accountants typically have years of experience and a set of proven systems they can implement for your business. They require no training or supervision, they already know what to do and how to do it.

Advantage #2: Cost

Hiring an outside accountant on a part-time basis costs a lot less than trying to hire and train an employee. The math isn’t even close: A fractional accountant will cost one-third to one-half the amount of an employee. Also, there are no employer costs (payroll taxes, benefits, PTO).

#3 Flexibility

Do you really have eight hours of accounting work every day? Most small businesses don’t (trust me) and working with an outside accountant is a lot more flexible. You can hire them on a part-time basis (five hours/week, ten hours/month, whatever it takes) and then scale up or down as your needs change.

#4 One-stop shopping

Small businesses often hire bookkeepers because that’s all they can afford. However, that’s not all they need. Outside accountants and firms can typically provide a full range of services (bookkeeping through tax) and help you keep everything under one roof.

#5 Independence

I’ve seen the same problem over and over again during my career: Internal accountants don’t always see problems clearly, won’t admit when they make mistakes, and are afraid to bring bad news to the owner’s attention because they don’t want to risk their job.

That’s a shame because one of the accountant’s main jobs is to look at the numbers objectively and highlight key issues and trends the owners need to be aware of. Outside accountants are in a much better position to do this. A good one will look at your business and financials with a skeptical mindset and tell you what’s really happening, not what they think you want to hear.