why do big companies get their accounting done by accounting firms when they could afford to do it on their own?

Question

why do big companies get their accounting done by accounting firms when they could afford to do it on their own?

In: 12

Answer 1

For the same reason many functions are contracted to other companies: it saves money.

Company A could either hire their own accountants, which means paying them full time salaries, benefits, and payroll tax; or they could contract with Accountants Co. and just pay them for the time they actually use. Accountants Co. can then afford to pay for the salaries, benefits, and payroll tax of their accountants by contracting with Companies B, C, D, and E as well.

This is also why it’s rare for corporations to hire their own service and support staff like janitors, maintenance, etc.