Introduction
As a company grows, its accounting function usually grows with it. More transactions, more employees, additional entities, tighter reporting requirements, and greater expectations from management can quickly put pressure on a small finance team.
The usual response is to hire another accountant. But that is no longer the only option. Advances in automation and the growing availability of outsourced accounting teams give CFOs and business owners more ways to build capacity.
So, should you hire, automate, or outsource your accounting function?
The answer depends on the type of work, the capabilities the business needs internally, and how the company expects its finance operation to evolve.
Start With the Work
Before choosing a solution, look at where the accounting team’s time is actually going.
How much time is spent entering invoices, reconciling accounts, following up on missing information, processing expenses, preparing recurring reports, or performing other repetitive tasks? How much is spent reviewing exceptions, interpreting financial information, managing controls, and advising the business?
That distinction matters.
A 2025 study from Stanford Graduate School of Business and MIT Sloan found that accountants using AI-supported accounting software shifted time away from routine data entry toward activities such as business communication and quality assurance. The researchers also reported a reduction in monthly close time among the firms studied.
The first question, therefore, should be: What work actually requires another person, and what work could be handled differently?
When Hiring Makes Sense
Hiring gives a company direct control over its accounting personnel and allows employees to develop detailed knowledge of the business.
An internal team can be particularly valuable when accounting requires substantial judgment, specialized expertise, or frequent interaction with executives and other departments. Controllers, accounting managers, and senior accountants can also play increasingly important roles in financial planning, internal controls, reporting, and business decision-making.
The accounting profession itself is moving in this direction. The Association of International Certified Professional Accountants describes management accountants as increasingly involved in business partnering and strategic decision-making alongside their traditional financial responsibilities.
Hiring also comes with a broader cost than salary. Recruitment, benefits, training, management, turnover, software, and the time required to build an effective team all factor into the investment.
For companies that need permanent internal expertise, those costs may be justified. For companies primarily dealing with a growing volume of routine accounting work, other options may deserve consideration.
When Automation Makes Sense
Automation is most useful when processes are repetitive, rules-based, and supported by reliable data.
Invoice processing, transaction matching, reconciliations, expense processing, and portions of financial reporting can often be automated or supported by technology.
The Journal of Accountancy has highlighted the growing use of intelligent process automation, combining technologies such as artificial intelligence and robotic process automation across accounting activities including reconciliations, financial close, and compliance workflows.
The benefit is not limited to faster processing. Removing repetitive work can give accounting professionals more time for analysis, exception management, financial review, and communication with management.
There is an important qualification: automation works best when the underlying process is sound.
If approval procedures are unclear, data is inconsistent, or systems do not integrate properly, technology may simply accelerate an inefficient workflow.
AICPA & CIMA research similarly emphasizes that people and technology need to develop together as finance organizations pursue digital transformation.
The objective should therefore be to identify which processes are genuinely suitable for automation rather than attempting to automate everything.
When Outsourcing Makes Sense
Outsourcing provides another way to increase accounting capacity without building every position internally.
Depending on the arrangement, an external accounting team can handle accounts payable, accounts receivable, reconciliations, general ledger accounting, payroll, month-end close, and financial reporting.
This can be useful for companies that need a functioning accounting operation but do not want to recruit, train, and manage a larger internal team.
The Journal of Accountancy has reported that outsourced accounting services are expanding beyond traditional bookkeeping into areas such as financial reporting, payroll, automation support, and cash-flow forecasting.
ACCA’s Accounting and Business magazine has also reported growing interest in finance outsourcing, citing factors including cost pressures, talent shortages, regulatory demands, and the need for organizations to scale their finance capabilities.
The important consideration is what the outsourcing arrangement actually provides. Companies should evaluate the provider’s accounting expertise, technology, controls, security practices, reporting processes, and ability to maintain service continuity.
Why the Answer May Be All Three
For many companies, hiring, automation, and outsourcing do not have to be mutually exclusive.
A growing business might keep its controller and finance leadership internally, automate invoice capture and transaction matching, and outsource accounts payable and reconciliations.
Another company might maintain most of its accounting team but use an outsourced provider to handle additional transaction volume during periods of rapid growth.
This blended approach allows each part of the accounting function to be handled according to its requirements:
- People provide judgment, oversight, business knowledge, and leadership.
- Technology handles appropriate repetitive and data-intensive processes.
- Outsourced teams provide additional accounting capacity and specialized operational support.
A 2025 Harvard Business Review analysis of finance transformation similarly examines how companies can reconsider the mix of internal resources, external resources, and technology as finance functions evolve.
Five Questions for CFOs
1. Where is the accounting team spending most of its time?
Identify the activities consuming the most resources.
2. Which processes are repetitive enough to automate?
Prioritize work with consistent rules, structured data, and predictable outcomes.
3. Which responsibilities require internal expertise?
Consider leadership, complex accounting judgments, controls, and business-specific knowledge.
4. What is the full cost of building the function internally?
Include recruitment, compensation, benefits, training, technology, management, and turnover.
5. What model can scale with the company?
Consider future transaction volumes, additional entities, geographic expansion, reporting requirements, and technology investments.
Build the Accounting Function Around the Work
The accounting function is becoming increasingly digital while human expertise remains essential. ACCA’s Digital Pathways Playbook, based on research involving more than 1,000 finance professionals across 100 countries, describes the progression toward increasingly digital and AI-enabled finance operations.
That makes the hire-versus-automate-versus-outsource decision less about choosing a single solution and more about designing the right combination.
A company may need to hire for leadership, automate repetitive transactions, and outsource recurring accounting operations. Another may need an internal team supported primarily by automation. A third may find that outsourcing provides the capacity it needs while management retains financial leadership internally.
The best starting point is the work itself.
Determine which activities require people, which can be supported by technology, and which can be performed effectively by an external team. Then build the accounting model around those requirements.
Are You Considering Business Process Outsourcing? IQ BackOffice Can Help.
Here at IQ BackOffice, we provide financial business process outsourcing for large and mid-sized enterprises. We serve a range of diverse industries, including manufacturing and distribution, healthcare and dental, restaurant and hospitality, energy, retail, and technology. Our solutions enable companies around the globe to automate and streamline the complex financial processes they manage.
IQ BackOffice reengineers financial processes to take advantage of best practices and leverage state-of-the-art automation. This allows us to remove manual or inefficient steps, delivering improved controls and up to 70% cost savings for our clients.
To learn more about how IQ BackOffice can reduce costs and streamline your Accounts Payable function, contact IQ BackOffice.
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