Cost comparison between hiring an accountant and outsourcing firm

Wednesday, 22 August 2012 09:58

Cost comparison

Usually hiring a foreign-related professional accountant is quite expensive for a foreign invested enterprise in China. However if you choose to cooperate with an outsourcing firm and pay for fixed service charges monthly, can also be rendered higher quality accounting services.

In China the enterprise need undertake below expenditures for employee besides salary.

  • Social insurance fund and housing fund
  • Expenses for office equipments and office rent
  • Transportation allowance and lunch allowance
  • Annual bonus and other allowances


 Below table is a cost comparison between hiring an accountant and cooperating with an outsourcing firm, the service charge and salary are both supposed to be RMB 8,000 monthly.



Outsourcing firm

Hiring an accountant

Service charge/Annual






Social insurance fund/Annual



Housing fund/Annual



Office equipment and other expense/Annual



Office rent/Annual



Transportation allowance (10/day)



Lunch allowance (20/day)



Annual bonus (2-months salary)






In addition to the expenditure mentioned above, hiring an accountant may involve other hidden costs such as paid maternity leave,severance packages,injury risk,administration costs and others. These uncertain expenditures would bring financial and operational risk to enterprise in potential.

 Other advantages

 Outsourcing firm also has other advantages as below



Outsourcing firm

Hiring a accountant

Professional service

it is equivalent of hiring a professional team for accounting job

one accounting person can’t take care the whole accounting progress and all fields

 Continuity of job

ensure continuous work in accounting by service team

company leaving and long vacations will interrupt the accounting job and may cause significant financial losses of company

Risk avoidance

clients could choose to clarify the related responsibilities in service contracts

company should bear significant losses of taxation and fund which are caused by omission

Supervision function by third-party

play a better role for financial supervision and ensuring the benefits as independent third- party

lack of independence and limited by internal relationships

Our suggestion

By above comparisons it is clear to define that not only outsourcing accounting service has a huge advantage in cost, but also it could ensure the company’s smoothly operation  and avoid risk. Thereby we strongly recommend that the small or middle-sized enterprise and start-up enterprise should take the outsourcing service as your first option in accounting.

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