In-house or outsourcing? Strategic decisions in accounting

Reliable accounting is a key prerequisite for entrepreneurial success. This applies regardless of whether the company is a medium-sized enterprise, a subsidiary or a start-up with investors. In practice, the question increasingly arises as to whether financial accounting should be organized internally or strategically outsourced.

This decision is rarely purely technical. It concerns structures, processes and responsibilities. Making such decision with foresight creates the basis for efficiency, scalability and trust.

Accounting as a strategic basis – not just a mandatory function

Accounting is more than just processing documents. It forms the basis for reporting, tax returns, planning, financing and compliance. The requirements for quality, transparency and adherence to deadlines are correspondingly high – especially in regulated industries, when investors are involved or in a corporate environment.

Private equity companies and strategic investors often realize that the existing accounting structure cannot keep pace with the increasing requirements. Reporting routines, closing dates or tax interfaces come under pressure – with a direct impact on the taxability of the investment.

Why internal structures quickly reach their limits

Many companies deliberately rely on internal accounting – often out of tradition or a desire for control. However, structural weaknesses become apparent in phases of growth or change:

• The skills shortage in accounting makes it difficult to fill vacancies.
• Complex VAT issues, digital requirements such as mandatory e-invoicing or ERP interfaces require specialized expertise.
• Internal accounting departments are often heavily dependent on individuals – with risks in the event of absence due to illness, resignation or parental leave.
• Digital changes, such as automation or new tools, meet with internal resistance.
• Know-how often lies with individuals – documented processes and standards are missing.

The result: accounting becomes a weak point. And this in an area that is critical to both regulatory and operational success.

Outsourcing as a structural solution – not just as relief

Outsourcing financial accounting is not an emergency solution, but a strategic decision. If implemented correctly, it brings sustainable benefits:

• Reliability and adherence to deadlines due to clearly defined processes and interfaces
• Scalability in the event of growth, internationalization or restructuring
• Expertise is retained institutionally – independent of individuals
• Transparency and efficiency in reporting – tailored to investors, shareholders or corporate headquarters
• Technical integration into existing systems (e.g., ERP, e-invoicing, digital archiving, payment and billing interfaces)

This approach is particularly advantageous for international companies whose German units have to be managed in compliance with GoBD (German principles for the proper keeping and storage of books, records and documents in electronic form) and HGB (German Commercial Code) and at the same time integrated into the group. Young companies with institutional shareholders also benefit if they do not yet have a stable internal structure.

Added value through interdisciplinary integration

The real added value of outsourced accounting is not only created through optimized processes. It can be seen in the integration into larger contexts. In a multidisciplinary structure – as exists at Baker Tilly, for example – accounting issues can be directly linked to tax, legal or labor law issues:

• Examination of VAT risks for cross-border services
• Integration into transfer pricing logic for intra-group services
• Use of data points for global minimum taxation (Pillar II)
• Support with corporate actions, changes of shareholders or M&A processes

This is where it becomes clear that accounting should not be considered separately – it is an integral part of corporate management.

Structure creates reliability

Companies that set up their accounting system in a structured way – internally or through an external partner – gain clear advantages. They reduce operational risks, improve transparency towards internal and external stakeholders and create a reliable basis for entrepreneurial action. Whether through an in-house accounting department or an experienced service provider, the key is to understand accounting for what it is – a central function for tax security, financial management and economic success.