Whether the costs of your own accounting organisation are too high is not revealed solely by the salary of a specialist or by a single software invoice. What matters is the sum total of personnel, systems and additional effort.
Cover, error corrections, queries and dedicated management time can be spread across multiple areas and are easily overlooked in the overall picture.
High overall costs become a structural risk if they increase permanently without a corresponding rise in the scope, quality or availability of the accounting services.
A high individual amount does not necessarily make accounting uneconomical. The crucial factor is the service the company receives for the total expenditure involved. An expensive specialist can be economically viable if the accounting operations are stable, available and run without recurring additional work. Conversely, a seemingly cheap solution can become uneconomical if other people repeatedly have to rework tasks or clarify outstanding issues.
Delineation: This article examines the total internal costs of maintaining an in-house accounting organisation. When it comes to the prices of an external accounting service provider, the article on the Cost of external bookkeeping this question separately.
For a reliable assessment, the bookkeeping costs must therefore be viewed as a comprehensive picture. This includes directly identifiable expenses as well as working time and additional effort incurred in personnel, IT, administration, or management.
Businesses differ in company size, document volume, number of accounts, locations, business models and responsibilities. A fixed amount could therefore not show whether the costs match the actual task. The more sensible question is: is the total expenditure increasing faster than the scope, quality and availability of the bookkeeping?
The salary of an accounts clerk, a software licence or an external service provider's invoice each represent only a fraction. If cover, familiarisation, data preparation, corrections and reconciliations are left out of this consideration, the economic burden is understated.
ClassificationA high individual cost item does not automatically mean that the accounting department as a whole is uneconomical. The cost problem arises from the ratio of the total tied-up resources to the accounting output actually required and available.
Part of the accounting costs can be quickly identified in current cost accounting. These include salaries, employer contributions, workstation costs, software, and external services. These items are important, but not yet sufficient for an overall assessment.
Gross salary is not the same as total labour costs. In addition to remuneration, there are further employer expenses. Workstations, technical equipment, further training, courses and the time required for induction can also be part of the operating expenses. Which components are actually relevant depends on the specific form of employment and organisation.
Accounting software can be just one of several technical cost items. Additional costs can arise from document management, Payment transactions, interfaces, archiving, updates, support or additional user licences. The structure becomes critical if multiple systems are paid for, but data is still transferred manually or maintained in parallel.
Even in internal accounting, external services may be added, for instance for technical support, special analyses or coordination with other departments. This is not necessarily duplication of effort. A cost risk only arises when service boundaries are unclear and comparable tasks are processed repeatedly both internally and externally.
Labour costsSalary and other employer expenses actually incurred form the basic staffing block.
system costsSoftware, licences, interfaces, support and technical equipment may be incurred separately.
external servicesExternal support must be included in the overall view if it is used for ongoing bookkeeping.
The harder-to-identify costs are not necessarily recorded under a shared accounting item. They arise in other departments, with management, or only when information is missing and work that has already been completed has to be redone.
If the management repeatedly has to search for receipts, explain account allocations or clarify missing approvals, accounting ties up time outside the actual accounting team. This time is not a separately booked accounting expense. For the overall economic assessment, however, it is relevant if it occurs repeatedly.
The same applies to purchasing, sales, project management or the human resources department. If these areas have to provide the same information multiple times or explain it afterwards, it creates additional effort that often does not appear in the visible accounting costs.
Holiday, illness or staff turnover do not necessarily cause extra costs in every company. However, if there is no reliable cover, backlogs, handovers and retraining occur. The situation becomes particularly expensive when knowledge is held by only one person and other members of staff have to reconstruct documents or processing statuses.
Errors or incomplete input data can result in bookings having to be checked, corrected and reconciled again. Media discontinuities also increase the workload when information from emails, spreadsheets, portals and paper documents has to be brought together. The cost factor then lies not only in the actual correction, but also in searching, communication and re-approval.
Typical corporate realityA document is first forwarded by email, later filed in a folder, and then downloaded from a portal once again. The visible software fee remains unchanged while the same information is processed multiple times.
Individual additional expenses are normal in everyday business life. A structural cost problem is indicated when similar burdens occur regularly and are spread across multiple areas. The development over several months is particularly revealing.
| cost block | Visible position | Frequently overlooked additional effort | Potential economic consequence |
|---|---|---|---|
| Staff and workplace | Salary, employer’s contributions, benefits | Induction, cover, further training, handover | Recognising a higher total cost than the salary position alone suggests |
| Software and systems | Licences, Support, Interfaces | Parallel storage, manual transfer, duplicate data entry | System costs are rising without any processing steps being omitted |
| Covering for staff and induction | Additional staffing | Search for revision statuses and undocumented knowledge | Backlogs and repeated training tie up further capacity |
| Corrections and reworking | Correcting entry or reassessment | Enquiries, approvals, searches and follow-up communication | One error triggers several additional steps |
| Voting and management time | Often not shown separately in the accounts | Clarification by senior management and specialist departments | Valuable specialist and management time is regularly tied up |
| Internal and external services | Salaries and invoices from service providers | Overlapping checks or duplicate processing | Several departments are handling the same case without any clear division of responsibilities |
None of these indicators on its own proves that the accounting is too expensive. However, if several of these factors persist, the cost structure should be considered as a whole. Otherwise, individual figures may remain plausible, whilst the overall expenditure continues to rise.
Rising accounting costs can have several causes. Several minor points of friction can reinforce each other. An additional system, unclear responsibilities or a lack of cover initially seem manageable. If these situations repeat, the effort grows month after month.
New software does not, by itself, reduce the workload. If existing filing systems and spreadsheets are retained, the new system acts as an additional layer. Staff then have to transfer data, check for discrepancies and reconcile different processing statuses.
If there is no clear boundary between the accounts department, the line department and an external body, the same task ends up being passed back and forth between the parties involved several times. Individual queries may seem minor, but taken together they can tie up a considerable amount of capacity, particularly if approvals or missing information have to be requested time and time again.
If knowledge about filing systems, special cases and processing statuses resides solely with individuals, every absence becomes a cost driver. Other employees do not start from the documented status, but have to reconstruct the context. Even when staff changes, this prolongs onboarding and increases the risk of subsequent rework.
Creeping cost increaseMany small additional costs add up without becoming apparent as a single cost category.
Recurring frictionSimilar enquiries, handover requests and corrections may arise on a recurring basis.
An accounting system that is consistently expensive not only puts a strain on the administrative budget; it also ties up specialist knowledge, management time and technical resources that are then lacking elsewhere. At the same time, it becomes more difficult to assess the actual costs of individual processes.
The structure becomes problematic when effort increases without being matched by more transactions, better availability or more reliable processing. The ratio between the resources used and the outcome of day-to-day bookkeeping then shifts.
Recurring clarifications pull staff from purchasing, sales, project management or executive management into accounting. Meanwhile, these individuals are missing from their actual tasks. The economic effect therefore lies not only in additional working hours, but also in the displacement of specialist and leadership work.
If costs are split across multiple departments and systems, accounting effort can hardly be planned reliably. This complicates budget decisions and obscures whether individual improvements have actually led to reduced effort.
The longer rework, gaps in cover and parallel systems repeat themselves, the greater the pressure to review the existing organisational structure. The need for a decision does not arise from a single high invoice, but from the continuous sum of the burdens.
Warning lightThe cost structure becomes critical not through a single expensive item, but through recurring additional expenses that permanently arise in multiple corporate divisions.
The cost of in-house bookkeeping cannot be compared directly with the monthly price of a service provider. The total costs comprise the resources actually tied up within the company. By contrast, the price of an external provider describes an agreed scope of services. A transparent decision-making aid is only created when both sides are fully delineated.
BAS also views the question of cost as a comprehensive picture of direct expenses and actually tied-up internal capacity. From this, no blanket statement follows as to whether internal or external bookkeeping is more affordable. What is decisive is the scope, initial situation, performance limits, and additional efforts that remain within the company.
How external deliverables and pricing models differ is covered in the standalone article on the Cost of external bookkeeping.
If internal accounting costs rise permanently due to cover, rework and tied-up company resources, a different organisational form may become economically relevant. The possible models are listed under Outsource accounting treated separately.
Brasser Accounting Solutions GmbH is a specialised accounting service provider that supports companies with financial accounting, payroll accounting, and the structuring of modern digital accounting processes. The aim is a collaboration that is professionally sound, organisationally relieving, and reliably functional in everyday use.
Brasser Accounting Solutions GmbH is part of a corporate group with Quint GmbH Tax Consultancy & Auditing and the Swedish accounting and tax firm Service Place Årjäng AB.
