THE OUT-SOURCED IN-HOUSE ACCOUNTANT

How to get Chief Financial Officer (CFO) brains without adding to your labour burdens. Let’s be honest: most small and mid-sized businesses don’t need an accountant warming a chair eight hours a day. They need clean books, calm month ends, and someone who can look at a cash-flow forecast without needing a lie-down. Enter the out-sourced in-house accountant – a professional (or small team) who plugs into your systems, shows up for month end like clockwork, sits in on your management meeting when it matters, and then quietly disappears… until you need them again.

Let’s first be clear about a crucial point: what you call the person doesn’t decide the law. If someone works mainly at your premises and takes day-to-day instruction, the taxman tends to see an employee, not a contractor. Employees mean pay as you earn, unemployment insurance, skills development levy, workman’s compensation, leave rules, performance management, and the whole human resource jamboree.

True contractors invoice you like any other supplier, carry their own business risks, and – if they’re proper independents – don’t appear on your payroll. T hat difference matters for three reasons: (1) money, (2) risk, and (3) sleep quality.

The Money If you employ, you’re signing up for a fixed monthly salary plus on-costs other than those directly payroll related. Think software seats, a laptop, training, and the hidden cost: your time managing them. For a qualified accountant, South African market medians aren’t pocket change – especially in the big metros.

With an outsourced retainer, you buy a package: bookkeeping + reconciliations + VAT + payroll + month-end pack + “please explain this weird South African Revenue Services letter”. Good firms price by scope and complexity. For startups and simple small and medium enterprises, that monthly retainer often lands well below a full-time salary and scales as you grow.

The Risk

Employees come with rights and processes, especially below the annual earnings threshold where overtime and working-time protections apply. That’s good and fair – but it means policies, contracts, and discipline done properly. Contractors reduce HR admin, but only if they’re truly independent. If your “contractor” sits at your desk four days a week, uses your tools, reports to your manager, and has no other clients, you’re waving a big red flag at the taxman. Misclassify them and you could owe back Pay As You Earn, penalties, and interest… fast. The f ix is simple: structure contractor engagements as deliverables-based with autonomy, and make sure they have multiple clients or their own staff.

The Sleep

What you really want is rhythm. A good out-sourced in-house setup runs on: Cadence: month-end close by day 5 – 10, then a neat management pack you can actually read.

■ Access: your cloud ledger (Xero/QuickBooks/Sage), shared drive, and a dedicated chat channel for fast questions.

■ Controls: maker–checker on payments, simple delegation rules, and a compliance calendar for SARS and CIPC.

■ Exit Plan: you own the ledger, the bank feeds, and the passwords. With that in place, month end becomes boring. Boring is beautiful.

Which model suits your size?

MICRO / START-UP (founder led, fewer than 150 transactions a month, simple VAT or none): Outsource the lot: bookkeeping, VAT/PAYE, annual returns. Add a quarterly “finance sanity” session. You’ll get clean books, timely returns, and no labour burden.

SMALL but growing (5–25 staff, inventory or project jobs, monthly VAT, lenders sniffing around): Go out-sourced in-house. Your provider runs the monthly close and payroll, drops a management pack each month, joins your operations meeting for 30 minutes, and flags cash-flow issues early. Consider one on-site day per week or month for hand offs and approvals.

MEDIUM (more transactions, forecasts every month, bank covenants, perhaps creeping toward review/audit territory): Hybrid works best: employ a full-time bookkeeper/assistant accountant for daily processing, and retain an outsourced FC/ CFO to own month-end, board packs, governance, and audit prep. It’s efficient, resilient, and still cheaper than building a full finance department overnight.

 LARGE / COMPLEX (multi entity, manufacturing, grants, exports): Employ your core finance staff – accountant/FC, maybe a junior – and top up with specialist external help for tax, IFRS, systems migration, and audit wrangling.

Red Flags & Quick Fixes

■ Red Flag: Your “contractor” has a company email, a desk, and is on the Staff Christmas Party list. Fix: Convert to employment or redesign the engagement to be truly project/deliverable based.

■ Red Flag: No POPIA wording with your outsourced firm. Fix: Sign a simple operator agreement – security, data purpose, sub-processors, and breach notices.

■ Red Flag: Month-end drifts into mid-month, every month.

Fix: Get a clear SLA drawn up with deliverable dates agreed with your contractor (liability).

■ Red Flag: Growth pushing you into independent review/audit. Fix: Bring processing in-house (bookkeeper) and keep an external FC/CFO to steer governance and deadlines. In summary, outsource when you want expert finance consistently, but not five days a week.

Employ when your daily operations genuinely need an accountant most days, and the workload justifies a desk. Whatever you do, classify correctly, paper the privacy, and lock in a service level agreement. Your future self (and your blood pressure) will thank you.

And if anyone tells you “Accounting is just data capture”, smile politely and ask them to explain deferred tax, payroll anomalies in a short month, and why cash in the bank doesn’t equal profit. T hen call your out-sourced in house accountant and get back to building the business.

T: +27 (0)31 207 1572

M: +27 (0)76 555 7529

E: heather@flairaccounting.co.za

W: www.flairaccounting.co.za