A company has three options for organizing its accounting
Summary of the decision
In Latvia, an in-house accountant costs a company between €1,750 and €2,980 per month in 2026. The cost of outsourcing the same workload is 5 to 7 times lower. Outsourcing is more cost-effective for the majority of small and medium-sized businesses. An in-house accountant is justified for large companies with a high volume of transactions and specific business requirements.
Why does the decision regarding the accountant need to be reviewed in 2026?
Most business owners make a one-time decision regarding their accounting model and never revisit it. In 2026, it will be worth reconsidering this decision, as four major changes have come into effect simultaneously. The personal income tax (PIT) reform with a new tax-free threshold, the mandatory use of e-invoices starting January 1, the alternative corporate income tax (CIT) regime for dividends, and the reform of the State Revenue Service (SRS) administration.
In this article, we compare the costs of both models in the Latvian market in 2026, highlight the main risks, and provide a list of seven questions for your company to consider before making a decision.
Three models of accounting organization
Internal Accountant
An employee at your company. You are responsible for their workstation, software, and HR matters.
Accounting Outsourcing
Contract with a specialized agency. The agency employs several specialists who are assigned specific areas of responsibility.
Combined model
The in-house accountant handles day-to-day tasks, but an external consultant is brought in for specific issues.
How much will an in-house accountant earn in 2026?
Short answer: The total cost of an in-house accountant in Latvia in 2026 ranges from €1,750 to €2,980 per month. The gross salary ranges from €1,200 (junior) to €2,000 (senior accountant). A chief accountant’s salary reaches €3,000. In addition to the salary, the employer’s share of social security contributions (23.59%), vacation pay, sick leave, workspace, software, and training are included.
| Cost item | Monthly amount, EUR |
| Gross salary | 1200 – 2000 |
| Employer’s share of VSAOI (23.59%) | 283 – 472 |
| Accrued vacation pay (pro-rata) | 100 – 167 |
| Average sick leave compensation | 30 – 50 |
| Workplace and equipment | 80 – 150 |
| Accounting software license | 30 – 80 |
| Training and Qualifications | 30 – 60 |
| Total monthly cost | 1750 – 2980 |
The manager’s time spent managing the employee is also included in the total costs. Typically, this amounts to 2–4 hours per month. If the manager’s hourly rate is 50 EUR, this adds another 100–200 EUR per month.
How much will accounting outsourcing cost in 2026?
Short answer: In Latvia in 2026, the cost of outsourcing ranges from €100 to €200 per month for a micro-enterprise, €200 to €400 for a small business, and €400 to €800 for a medium-sized business. This is 5 to 7 times less than the total cost of an in-house accountant. The price typically includes monthly bookkeeping and basic consulting. The annual report is usually billed separately.
| Company size | Operations per month | Average price, EUR per month |
| Microenterprise | up to 10 | 100 – 200 |
| Small business | 10 – 50 | 200 – 400 |
| Medium-sized company | 50 – 200 | 400 – 800 |
| A large company | more than 200 | price upon agreement |
The price typically includes the entry of received and issued invoices, processing of bank statements, VAT returns, social security and income tax returns for employees, a monthly report, and basic consultations (1 to 2 hours per month). The annual report (200–800 EUR depending on the size of the company), full personnel record-keeping, and consultations on complex transactions are billed separately.
Why 2026 Will Raise the Bar for Accountants
In 2026, four major changes came into effect in Latvia. All of these changes require specialized knowledge in several fields, which a single person is rarely able to master.
PIT reform
The new tax-free threshold is 550 EUR per month, and the minimum wage is 780 EUR. The wage calculation methods differ from previous ones.
Mandatory e-invoicing from 1 January
For both incoming and outgoing invoices, the PEPPOL format must be used, along with integration between the accounting software and the e-invoicing system.
Alternative CIT regime for dividends
Companies can choose between the traditional model and the new one (15% CIT + 6% PIT). The decision requires a specific calculation for each company.
SRS administration reform
The EDS system requires new authentication and automatic data exchange between the State Revenue Service (SRS) and accounting software.
Which model suits which company best
An in-house accountant is the better choice if your company meets any of the following criteria.
- More than 200 transactions per month.
- The accountant must follow production or warehouse resources on a daily basis.
- Specific regulatory requirements (banking, insurance, public procurement bidders).
Outsourcing is the better choice if your company meets any of the following criteria.
- Up to 50 transactions per month, an amount that does not fill a full employee workload.
- The company is still growing and the number of transactions changes every quarter.
- E-commerce or international trade (OSS, IOSS, various countries’ VAT rates).
- A specific industry with its own accounting characteristics (construction, IT, retail, manufacturing).
For companies with 50 to 200 transactions per month, the final choice depends on the industry and management preferences. Outsourcing usually costs 5 to 7 times less, and you can consult specialists across different areas (payroll, VAT, annual report, e-invoicing). An in-house accountant, on the other hand, sits in your office and better understands the company’s day-to-day work and colleagues.
Three risks that are often overlooked
When deciding on accounting, many business owners focus only on price and overlook three risks.
One person cannot know everything equally well
One person is rarely equally well-informed in every area. At an accounting agency, each area has its own dedicated specialist.
If the accountant is absent, work stops
If the in-house accountant gets sick, goes on holiday, or moves to another employer, accounting work stops until a replacement is found. At an agency, another specialist takes over the same day.
One person cannot supervise themselves
In small companies, the in-house accountant often enters invoices, prepares payments, and approves reports themselves. If there is an error or deliberate misconduct anywhere, nobody notices, because there is no second person to verify the data.
Seven questions before deciding on accounting
Before you decide on an accounting model, answer seven questions. The answers will show which model suits your company best.
How many transactions per month?
Up to 50, outsourcing is usually more cost-effective. Above 200, an in-house accountant starts to justify their cost.
What is your business model?
If you sell only in Latvia with one VAT rate, one person can manage. If you trade in the EU or worldwide with OSS and IOSS, a broader knowledge base is useful.
How important is business continuity?
If invoices to clients and payments to suppliers must be sent every day, outsourcing guarantees that work does not stop when the accountant is away.
How confidential is your company data?
The agency signs a confidentiality agreement and operates under GDPR. In practice, your data is seen only by those agency employees who work on your case.
Does the company plan to expand?
If yes, the agency’s price adjusts to the workload gradually. With an in-house accountant, you will need to either hire a second person or let one go if the workload decreases.
What is your budget?
The difference between the two models is on average EUR 18,000 to 24,000 per year in favour of outsourcing.
How much time will you spend managing the employee?
An in-house accountant is your employee. Salary discussions, holiday planning, sick leave, and motivation will require 2 to 4 hours of management time per month. With an agency, this time is not needed.
Frequently Asked Questions
The handover of systems and documents typically takes 5 to 10 business days. During this time, we receive accounting files, bank access credentials, and historical tax returns. If there are errors in previous periods, we correct them alongside our daily work. This process usually takes an additional 1 to 3 months, depending on the volume. Your company’s daily operations continue uninterrupted during this time.
The transition can take place in any month. The easiest time is immediately after filing the VAT return (on the 20th of the month), since by then all obligations for the previous period have already been settled and the new accountant can start with a clean slate.
Yes. We sign a confidentiality agreement and operate in compliance with the GDPR. At the agency, only the people working on your case will have access to your data.
Check these four things: Are tax returns filed on time (as shown in your EDS profile)? Does your accountant explain letters from the State Revenue Service? Do you receive financial reports regularly without having to ask for them? And does your accountant take the initiative to discuss tax changes?
If you would like to find out which model works best for you, book a free initial consultation. We will discuss your transaction volume and industry specifics to provide a tailored offer and recommendations.