Hire a full-time accountant, a bookkeeper, or outsource? How SMEs should choose

Many business owners have asked themselves this. The answer depends on the size of your company today and on what worries you most. Let us work out the money first, then talk about the risks.

First, the three roles. A bookkeeper records your documents and reconciles the bank. An accountant does the bookkeeping too, but also makes adjustments, prepares financial statements and handles year-end closing. Outsourced bookkeeping means handing the bookkeeping work to a professional team outside your company and paying a monthly fee.

How much does each option cost per month: an accountant, a bookkeeper or outsourcing?

As a reference, a full-time accounts assistant costs about RM3,000 to RM4,200 or more a month in total, a part-time bookkeeper about RM900 to RM1,800, and outsourced bookkeeping starts from RM280. The salaries in the table below are reference ranges only. They help you compare the cost structure and do not represent any particular company's pay.

Outsourcing prices are starting prices. The final fee follows your quotation and excludes service tax. All three plans include recording transactions, bank reconciliation, basic monthly financial statements, deadline reminders and year-end closing. The Starter plan suits up to 50 transactions a month. The Growth plan covers up to 150 and adds monthly management reports. The Pro plan covers up to 400, and adds payroll for 10 employees and a monthly online meeting with the owner. See the full details on the pricing page, or read this guide on bookkeeping fees in Malaysia.

The table shows you the money. What it does not show are the risks, which we cover next.

What is the biggest risk of hiring full-time staff to do the books?

The biggest risk is that only one person understands the books. When that person leaves or goes on leave, the bookkeeping stops. These three situations are the most common.

The employee resigns and the books stop

Say the owner in Cheras hires an accounts assistant who stays for a year and a half. One Monday morning she hands in her resignation letter and leaves a month later.

Until a replacement is found, that month's documents pile up on the desk. When the new person arrives, they need time to understand how the previous person worked, and some of the classifications only the previous person understood. This is often how a backlog begins.

Only one person, no backup

When the employee falls sick, takes long leave or goes back to their hometown for Chinese New Year, the bookkeeping stops too. When the 15th comes and EPF, SOCSO and PCB (monthly tax deduction) are due, or the SST-02 filing deadline arrives, no one is there to handle it, and the owner has to step in.

The same person handles both the money and the books

Accounting has a basic principle called segregation of duties: receiving money, making payments, recording transactions and reconciling should ideally not all be done by one person.

Small companies have few staff, so one person often does everything. Even if the employee is completely honest, without a second pair of eyes to review the work, mistakes can go unnoticed for a long time.

What limits of outsourced bookkeeping should you know about first?

An outsourced team is not inside your company. You need to send documents regularly, and someone in-house still has to chase payments and match documents day to day. Before signing, it is best to agree on the following points.

First, if documents arrive late, the books will be late too. Documents are mostly sent online, by WhatsApp photo, Google Drive or upload to the accounting software. Second, calling customers about payments and matching documents with suppliers is usually still done in-house. Third, ask exactly what is included: management reports, payroll, SST filing and support for tax filing differ from provider to provider.

Fourth, communication needs a fixed rhythm. Agree on when documents are sent each month, when reports are delivered under the service agreement, and how questionable documents are confirmed.

Fifth, be clear about who owns the accounts and documents. Accounting software accounts and uploaded files should ideally be set up in your company's own name, so that if you change staff or providers later, the records stay in your hands.

So outsourcing works best when the owner or an employee is willing to take care of "collecting documents", and hands over "recording, reconciling and reporting".

Which bookkeeping setup should my company choose?

With fewer than 150 transactions a month and only one company, outsourcing is usually the best value. With several hundred transactions or more, and a need for someone to issue invoices and chase payments every day, consider hiring. Check your situation against this list:

When should you change your bookkeeping setup?

Review it when your transaction volume, staffing or document flow changes noticeably. Here are some common signals.

From outsourcing to hiring: your volume keeps growing past several hundred transactions a month, and you need someone in the office every day to handle receipts and payments. At this point, a full-time hire with an external team reviewing each month is a steadier combination.

From hiring to outsourcing: an employee has resigned and you realise your transaction volume is actually low, so a full-time hire does not pay off. Or you have gone through two or three bookkeepers and every handover has caused a mess.

There is one more case: once e-Invoice is implemented, your document flow changes. If your in-house staff are not familiar with MyInvois, read about our e-Invoice / MyInvois service before deciding how to split the work.

Whichever option you choose, what matters most is that someone completes the books accurately every month. To see how outsourcing works month to month, read about our monthly bookkeeping service.