There is no single right answer between the two approaches — only the one that fits your company at its particular stage of development. Yet the decision is almost always made based on incomplete information: the entrepreneur compares the outsourcing invoice (€300/month) with an in-house accountant's gross salary (€1,500) and concludes that outsourcing is five times cheaper. In reality, the comparison isn't that simple — and the difference doesn't always favour outsourcing. We examine both options down to the last euro, including hidden costs and benefits that can't be measured in money.
The True Cost of an In-House Accountant
"€1,500 a month" is just the beginning. The total cost of an in-house accountant to the company is made up of several layers, most of which aren't visible on the payroll.
Direct Costs — The Payroll Budget
According to Lex & Finance's 2026 study, the average gross salary for an accountant in Latvia ranges from €1,200 to €2,000 per month, depending on qualifications and experience. 2026 job listings confirm this: assistant accountant positions offer €1,200–1,600, while an experienced accountant commands €1,600–2,200.
Let's assume your accountant is a qualified professional earning €1,800 gross. The total monthly costs:
Cost item | Monthly amount |
|---|---|
Gross salary | €1,800 |
Employer social contributions (23.59%) | €425 |
Business risk duty (0.36%) | €6 |
Total payroll costs | €2,231 |
So before any other expenses, your accountant already costs more than two thousand euros a month on your balance sheet. That's roughly €26,800 a year. This figure doesn't include holiday pay (one month per year, meaning 11 months of work must cover 12 months of salary), the first 9 days of sick leave (paid by the employer), or potential bonuses.
Indirect Costs — Work Environment, Equipment, Training
An in-house employee means a workplace. That's not just a desk and chair — though those are costs too. It includes:
Computer and licences. A computer (amortised at ~€30–50/month), accounting software (e.g. Jumis, Horizon, or Pats.lv — €30–100/month depending on functionality), operating system and office software licences
Training and maintaining professional qualifications. Accounting legislation changes every year, often several times a year. Professional seminars, courses, and certification cost €200–1,000 annually
Workplace costs. Rent, utilities, insurance — proportional to the space occupied. Even if the office already exists, an extra employee means a greater load on infrastructure
Administrative burden. Someone prepares the employment contract, registers the employee in EDS, administers leave and sick leave. That's time spent by a manager or HR specialist
Overall, indirect costs add another €150–400 per month.
Replacement Risk
One of the biggest hidden costs of an in-house accountant is dependence on a single person. If the accountant falls ill, goes on leave, or suddenly resigns, the company is left without accounting. VID deadlines don't wait. In our experience, emergency replacement during a transition period costs double — both financially (extra payment to an outsourced provider for urgent work) and in stress.
The True Total Price
Cost layer | Monthly amount |
|---|---|
Payroll (gross salary €1,800 + social) | €2,231 |
Holiday pay (amortised) | €150 |
Sick leave reserve (approx.) | €50 |
Equipment and software | €100 |
Training and qualifications | €50 |
Workplace (rent, utilities) | €150 |
Total per month | ≈ €2,730 |
Total per year | ≈ €32,760 |
By comparison: a good outsourced accountant for this same company (30–50 transactions, 3–5 employees) would cost roughly €300–500 per month, or €3,600–6,000 per year — 5 to 9 times less.
Outsourced Accounting — What You're Actually Buying
Outsourced accounting is a service whereby a specialised firm (or a sole practitioner accountant) handles your SIA's bookkeeping under a service contract. Typical prices in 2026:
Business size | Monthly price |
|---|---|
Micro enterprise (up to 10 transactions, 1–2 employees) | €100–200 |
Small enterprise (10–50 transactions, 3–10 employees) | €200–400 |
Medium enterprise (50–200 transactions) | €400–800 |
VAT payer surcharge | +€50–150 |
Source: Lex & Finance, April 2026.
What's Included — And What's Not
The standard monthly service typically includes:
Recording primary documents (invoices, receipts, bank statements)
Preparing and filing VAT returns (if the company is a VAT payer)
Payroll calculation and employer report preparation
CIT return preparation
Basic consultations
But there are services that are usually not included in the base price and are offered separately:
Annual report preparation: €150–500
Representation at VID audits: from €50 per hour
Document preparation for banks: €30–100 per package
Tax consultations on non-standard matters: €30–60 per hour
The Advantages of Outsourcing
Collective expertise. In an outsourced firm, your accounting is typically not managed by a single person — it's a team. This means you have access to multiple specialists' knowledge: one is deeply versed in VAT, another in labour law, a third in international transactions. An in-house accountant, however skilled, cannot be an expert in all areas simultaneously.
Continuity. If your regular accountant falls ill or goes on leave, a colleague covers for them. Deadlines are not missed. With an in-house accountant, absence means work stops.
Liability. A professional accounting firm carries professional indemnity insurance. If a mistake is made that causes losses, you have the ability to recover them. Recovering losses from an in-house employee is considerably more complicated.
Scalability. As your company grows, the outsourced service volume simply increases — there's no need to hire a second accountant, reconfigure office space, or purchase additional software.
The Risks of Outsourcing
Remote communication. Most outsourced accountants work remotely. If you need an immediate answer, it may not be available that very second — unlike a colleague next door.
Data confidentiality. Your SIA's financial data sits in an external system. Although modern data protection standards are high, this is still an additional risk, particularly in industries with heightened confidentiality requirements.
Quality variance. The price range for accounting services is vast — from €14 to several hundred euros per month. A low price often means superficial service: documents are processed minimally, consultations are not provided, and errors only surface when VID starts a review. It's important to understand exactly what you're buying — and not to buy price alone.
When an In-House Accountant Pays Off
Despite significantly higher costs, there are situations where an in-house accountant is the justified choice:
High transaction volume (200+ per month). When the transaction count becomes very high, outsourced pricing starts approaching in-house costs. At 500+ transactions per month, an in-house accountant may even be cheaper than outsourcing.
Continuous on-site presence is required. A restaurant with daily cash register reports, a manufacturing plant with inventory tracking, a shop with shift workers — in such businesses, the accountant often needs to be physically present.
Specialised industry with high confidentiality requirements. Law firms, financial advisory companies — an in-house accountant means sensitive data never leaves the company premises.
The company is building an internal finance function. If the SIA is growing fast and plans to create its own finance department, an in-house accountant can form the foundation — later hiring assistants and evolving into a finance director.
When Outsourcing is the Right Choice
For the majority of small and medium SIAs (up to 50 employees and 200 transactions per month), outsourcing is financially more advantageous in 2026. This applies particularly to:
Start-ups, which need a flexible service that grows with the company
Businesses with international operations, needing expertise in intra-Community VAT, customs, and currency transactions — specific competencies a single in-house accountant rarely covers
Non-residents, whose SIA is registered in Latvia but who are themselves not in the country — remote accounting with Latvian and English language support is the only practical solution
Seasonal businesses, where the accounting workload fluctuates from month to month — you pay only for the actual work volume, not for downtime
The Hybrid Model — Combining Both Approaches
A growing number of scaling companies are choosing a hybrid approach: the company has an internal finance specialist (not necessarily a certified accountant) who handles day-to-day document processing, invoicing, payroll data preparation, and primary document organisation, while an outsourced accountant checks the data, prepares and files declarations, and advises on complex matters.
This model combines the advantages of both approaches:
Day-to-day operational questions are resolved on-site, without delays
Tax returns and more complex issues are managed by a specialised team
Costs are lower than a fully-fledged in-house accountant, but quality is higher than outsourcing alone
Replaceability — if the internal specialist leaves, the outsourced team ensures continuity
12 Questions to Ask Before Signing a Contract with an Outsourced Provider
Is the annual report included in the monthly fee? If not, it could mean an extra €150–500 expense once a year.
How much does payroll calculation cost per employee? Typically €15–30 per employee per month — five employees could mean an additional €75–150.
Are VAT returns included in the base package? The VAT surcharge can reach up to €150 per month.
What is the hourly rate for additional consultations? Usually €30–60 per hour — there should be a clear understanding of what counts as "additional" and what's "included".
Is there a transaction cap beyond which the price changes? Some firms set a fixed limit (e.g. 30 transactions), after which the next pricing tier kicks in.
How does document exchange work? Must documents be sent by mail, scanned, or uploaded to a portal? How often?
What professional indemnity insurance is in place? Is the firm insured for its professional activities, and what is the coverage?
What happens if my regular accountant falls ill? Is there a replacement mechanism?
In what languages are consultations provided? Especially important for non-residents and international businesses.
Is it possible to receive reports on the company's financial position? Beyond the mandatory VID returns, will you also receive management reports and profit/loss statements?
What is the minimum contract term and what are the termination conditions? Is there a trial period? How are documents handed over if you end the relationship?
What is the work monitoring procedure? Can you see at any time what has been done and what hasn't yet?
Conclusion — How to Decide
There is no universal answer, but there is a clear decision-making algorithm:
Calculate your company's monthly transaction volume — invoices, bank transactions, cash receipts, number of employees
Compare the total cost of an in-house accountant (salary + social contributions + leave + equipment + training) against the outsourced price for the same transaction volume
Evaluate not only price, but also — expertise level, replaceability, flexibility under growth scenarios, confidentiality requirements
For the majority of SIAs with turnover up to €1 million and teams of up to 30 people, outsourcing is financially more advantageous in 2026 — the difference is typically 3–8 times in favour of outsourcing, not counting qualitative benefits (collective expertise, continuity, scalability). However, if your company is approaching 200+ transactions per month or you need a permanent on-site accounting presence, an in-house accountant becomes a serious alternative.
Last updated: April 2026. Information is based on the Lex & Finance market study, current job listing salaries, the ABWays comparison, and Balansis client experience.
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