Table of Contents
- Introduction
- Cost Comparison of Automation vs. Outsourcing in F&A
- What Does this Mean for Your Business?
- Where Exactly Do You Save Money?
- How Can Atidiv Minimize Your Accounting Cost?
- Accounting Cost FAQs
In-house automation or outsourced F&A, which one is more suitable for your business? Frankly speaking, it is not an easy call. The reason for this is that the decision depends on a lot of other factors, such as your tenure in the industry, company size, cash ratio, etc. Despite everything, it is a given that in-house infrastructure will cost you more. However, to make the most of the reduced accounting costs through outsourcing, you must also choose the right brand.
Introduction
Real-time insights, rising invoice volume, and tighter compliance requirements have compelled businesses to manage their finances faster than ever. The central question for founders and finance leaders is simple: How to reduce finance and accounting costs? The answer spans across two central pathways: automation or outsourcing.
- According to data from 2024, the use of AI automation in finance has risen to 58%, up from 21% in the preceding year.
- Recent operational metrics indicate that manual keying of invoices witnessed a fast decline from 85% to 60% within a year across multiple industries.
So, there is no question about the fact that the market is shifting towards an automated work process. The need for automation to streamline the process and reduce errors and delays in F&A is uncontestable. However, one needs a definite answer to the question – outsourced or in-house automation – which is cheaper?
Cost Comparison of Automation vs. Outsourcing in F&A
Firms take up automation to speed up the internal processes, but how efficient and cost-effective can that be? Let’s run an estimation of the cost comparison of internal staff with automation software and outsourcing!
| Cost Scenario | Automation Tools + In-House Accounting Team | Outsourced F&A |
| Upfront Costs | Implementing automation requires a sizable upfront investment. Here is the data that puts things into perspective: ERP implementation for small to mid-sized businesses ranges from USD 10,000 to USD 150,000, covering software licenses, setup, data migration, etc. | Outsourcing typically involves much lower upfront costs. Data reveal that outsourced bookkeeping and accounting services generally cost somewhere between USD 500 and USD 2,000 per month, or USD 6,000 to USD 24,000 per year, depending on scope and volume. Such cost structures make it ideal for businesses seeking a quick, low-friction start. |
| Ongoing Costs | Recurring expenses include software subscriptions, system maintenance, updates, internal talent salaries, and periodic training. While these costs accumulate, they also give companies complete control over their financial reporting environment. | Costs are usually bundled into predictable monthly or quarterly fees. This model covers technology, staffing, reporting, and compliance, reducing financial uncertainty and eliminating surprise expenditures. |
| Scalability | Scaling an internal team often requires adding more licenses, increasing storage, expanding system capacity, and hiring additional staff. This makes scaling possible but gradual and cost-intensive. | Outsourced F&A scales instantly because vendors can add or remove resources based on volume. This flexibility is especially beneficial for fast-growing or seasonal businesses. |
| Efficiency | Efficiency improves significantly once automation tools are fully integrated and teams master the workflows. However, the results depend on internal expertise, discipline, and process consistency. | Outsourcing provides immediate efficiency gains. Providers rely on mature processes and automation-ready workflows. In addition to trained experts, these features allow businesses to experience fast improvements without internal delays. |
| Control & Customization | An internal system offers maximum control. Businesses can customize approvals and compliance workflows to fit their exact needs, but the cost will vary somewhere between USD 300,000 and USD 2,000,000. | Customization depends on the expertise and capabilities of the outsourcing agency. However, the maximum that businesses pay for customization is USD 2,500 monthly, which is about 10x lower than the minimum annual cost of in-house automation. |
Partnering with an outsourcing agency that bundles automation with execution helps you avoid penalties, rework costs, and converts full-time internal staffing costs into a more flexible format.
While automation is key to lowering accounting costs, it is essential for you to consider whether in-house staffing with automation is a good way to go or not.
What Does this Mean for Your Business?
Firstly, if your company processes a moderate to high volume of invoices, payrolls, and payments, outsourcing to a provider with automation will lower the total accounting cost you would otherwise incur with in-house staffing.
If you are an early-stage or lean start-up, outsourcing will spread out accounting costs and reduce risks. As your company scales up, the marginal cost per transaction will increase. With an outsourced provider, these costs can be absorbed easily as they have an efficient system of internal staff and automation already operational at full scale.
Where Exactly Do You Save Your Money?
An outsourced provider reduces not only risks and errors, but also accounting costs significantly. Here’s how an outsourced provider reduces your cost:
- Set-up and implementation: Integrations are mostly handled as part of the service
- Ongoing subscription and retainer: Monthly subscriptions are tied to SLA and volume. The vendor mostly absorbs the operational costs that you would otherwise pay for separately in-house.
- Labour and oversight: Day-to-day accounting labour is replaced by systems that can pull data with unfailing accuracy. Additionally, the costs shift from fixed headcount to variable service fees only.
- Error correction and rework: Forget late payments, reconciliation cycles, and vendor disputes from manual labour. F&A outsourcing agencies are equipped to do just this with automation, while inexperienced in-house setups add costs over rework.
- Compliance and audit readiness: Outsourced providers deliver auditable processes and standardized records to lower auditing costs and friction.
- Tool sprawl and integration: Outsourcing offers a multiple-point solution, reducing errors like license overlap and failed integrations by integrating all of it under one SLA.
- Scaling costs: As your company scales up, overhead costs and subscription per user increase. With an outsourced provider, you reduce this per-head cost. Better optimization and higher automation coverage, which enables outsourced providers to absorb these marginal costs. These are the very reasons a study from Grand View Research suggests that firms prefer long-term, predictable, scalable costs from outsourced providers in F&A rather than in-house costs.
How Can Atidiv Minimize Your Accounting Cost?
Minimizing finance and accounting costs is not an easy feat to achieve in-house, and it takes a leap of faith to trust outsourcing agencies. This is where Atidiv fills the gap with 16+ years of industry experience, a 100% accuracy record, and a fleet of 390,000+ CAs.
Atidiv’s processes are seamlessly built to not only counter limitations of in-house F&A as discussed above, but also provide the following support:
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- Single-vendor accountability: You outsource your entire accounting process, from Accounts Payable, payroll processing to inventory management, all of it in one go. Therefore, there is no need for hankering after solutions by yourself; just reach out!
- Faster onboarding and integration: Standardized processes and built-in templates reduce early-stage misconfigurations that are otherwise common in early-stage startups. Furthermore, for a comprehensive integration, your employees get ongoing support and training to match the desired level of expertise.
- Flexible budgeting: No more worries about the budget shooting up midway during as process, as you get your services delivered with a maximum of 10% variance to the original budget.
- Daily transaction management: Every day, the numerous accounting transactions that take place are accounted for immediately. Moreover, their effects on other dependent factors are also adjusted. Thus, the last hour rush during the monthly close is avoided.
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- Continuous optimization and predictable costs: Atidiv’s integrated F&A offers automation with upgradation across its client base. The costs are predictable, unlike per-invoice SaaS billings.
- Tailored reports: Your business needs and challenges are unique, and thus, you get access to services that address these concerns rather than sticking to a fixed regime.
You need quick-time value and predictable costs in F&A – Atidiv offers all of it in a single stop. Contact us today and book your free consultation!
Accounting Cost FAQs
1. Is automation always cheaper than outsourcing?
Not necessarily. Automation requires major upfront investment in tools, implementation, and training, while outsourcing spreads costs over predictable monthly fees. In terms of ROI, let us take a look at this stat on in-house vs outsourced automation costs (maximum) –
- USD 227,500 for in-house infrastructure plus teams
- USD 120,000 for bundled outsourced F&A
Therefore, cost-effectiveness is consistent with outsourcing. You only need to find a reliable outsourcing partner like Atidiv and get going!
2. Can I combine automation with outsourcing in 2025?
Yes. Many outsourcing providers bundle their own automation tools into the service. This gives you the benefits of automation without paying separately for licenses, implementation, or technical support. Just one caveat: choose the outsourcing brand that has relevant domain experience and tailor-made services suited to your business requirements.
3. When does in-house automation become cost-effective?
In-house automation becomes cost-effective only when your transaction volume is consistently high, and your team has the expertise to manage workflows, updates, and maintenance. For most early-stage or lean companies, outsourcing remains the more economical choice until operations scale significantly.