Accounting Outsourcing in Latvia: When It Makes More Sense to Hand Over Your Books

‍

In-house accountant or outsourcing? Every small and medium business owner in Latvia faces this question. The answer seems obvious when looking at the numbers: an in-house specialist costs 2,000 euros per month, while outsourced accounting services run 200 to 400 euros for the same work volume. But it is not just about money. Outsourcing is a different accounting model with its own advantages and limitations. In this guide, we will examine when outsourcing truly makes more sense, how to organize the transition, what should be in the contract, and how 2026 changes affect the Latvian accounting services market.

‍

What Accounting Outsourcing Is and How It Works

‍

Accounting outsourcing means transferring bookkeeping functions to an external company or individual specialist. Instead of hiring an in-house accountant, the enterprise signs a contract with an outsourcing firm that handles bookkeeping, declaration preparation and filing with VID, payroll calculations, reports, and consultations. Communication happens through electronic channels. Remote accounting (attālināta grāmatvedība) allows working with a Riga based accountant from any city in Latvia or even abroad.

‍

Comparison: In-House Accountant vs Outsourcing in Numbers

‍

Consider a typical small SIA with 5 employees and 30 monthly transactions:

‍

In-House Accountant: Real Cost

‍

• Gross salary: 1,500 euros per month
• Employer social contributions (23.59%): 354 euros
• Vacation pay: equivalent of 125 euros per month
• Sick leave, training, workspace: from 180 euros per month
• Total: approximately 2,160 euros per month or 25,920 euros per year

‍

Outsourced Accounting: Real Cost

‍

• Monthly service: 250 to 350 euros
• Annual report: 300 to 500 euros (equivalent: 25 to 42 euros per month)
• Total: approximately 275 to 392 euros per month or 3,300 to 4,700 euros per year

‍

The difference is 21,000 to 22,600 euros per year. Outsourcing costs 5 to 7 times less.

‍

When Outsourcing Makes More Sense: 5 Scenarios

‍

Scenario 1: Small enterprise with low turnover

‍

With fewer than 10 employees and fewer than 50 monthly transactions, maintaining an in-house accountant is economically unjustifiable.

‍

Scenario 2: Early stage startup

‍

A young business with a limited budget cannot afford an in-house accountant at 2,000 euros. Outsourcing at 100 to 200 euros solves this.

‍

Scenario 3: Seasonal business

‍

For enterprises with strong seasonality, transaction volume fluctuates sharply. Outsourcing firms charge based on actual work volume.

‍

Scenario 4: Business without a physical office

‍

More companies work remotely. No office means no workspace for an in-house accountant. Remote accounting fits perfectly.

‍

Scenario 5: Need for multiple specialists

‍

Sometimes a business needs not one accountant but a team. An outsourcing firm provides access to a team for the price of one specialist.

‍

When an In-House Accountant Is Still Better

‍

• Large enterprise with 50+ employees and 200+ monthly transactions
• Business with complex specifics (manufacturing cost accounting, construction project accounting)
• Company working with confidential information
• Enterprise with very high cash transaction frequency

‍

How to Organize the Transition to Outsourcing

‍

• Step 1: Select an outsourcing firm (verify VID license, insurance, industry experience)
• Step 2: Agree on service scope and sign a contract
• Step 3: Transfer the accounting database and document archive
• Step 4: Issue a power of attorney (pilnvara) for the accountant to work with EDS and VID
• Step 5: Set up electronic document flow
• Step 6: Run a trial month

‍

Transition costs: 100 to 300 euros one time. The process takes 2 to 4 weeks.

‍

What Should Be in the Contract With an Outsourcing Firm

‍

• List of services included in the base price
• Costs of additional services (annual report, consultations, VID representation)
• Declaration preparation and filing deadlines
• Accountant liability for errors and penalties
• Document transfer and storage procedures
• Information confidentiality
• Contract termination and handover procedures
• VID license and professional liability insurance information

‍

VID License: Mandatory Requirement Since 2023

‍

Since July 1, 2023, all external accounting service providers in Latvia must hold a VID license. The transition period ended July 1, 2025. In 2026, only fully licensed specialists remain in the market. License status can be verified in the public registry at vid.gov.lv.

‍

2026 Changes Affecting Accounting Outsourcing

‍

Electronic Invoices (e-invoices)

‍

From January 1, 2026, all enterprises must issue domestic invoices as structured electronic invoices. Outsourcing firms' software must support the new format.

‍

New EDS Access Rules

‍

From 2026, EDS login via username and password is unavailable for most users. The accountant needs Smart-ID, eID, or eParaksts, and the client must issue a power of attorney.

‍

Outsourced Accounting Service Prices in Latvia

‍

• Micro enterprise: 100 to 200 euros per month
• Small enterprise: 200 to 400 euros
• Medium enterprise: 400 to 800 euros
• Self-employed: 80 to 200 euros
• Annual report: 150 to 500 euros additionally
• One-time consultation: 30 to 60 euros per hour

‍

Frequently Asked Questions

‍

How many times cheaper is outsourcing compared to an in-house accountant?

‍

5 to 7 times. An in-house accountant costs approximately 2,000 euros per month. Outsourcing for comparable work volume costs 250 to 400 euros.

‍

Is a license mandatory for an outsourcing accountant?

‍

Yes. Since July 1, 2023, external accounting services without a VID license are prohibited. Verification is available in the public registry at vid.gov.lv.

‍

How is the transition to outsourcing organized?

‍

The process takes 2 to 4 weeks: firm selection, contract signing, database transfer, EDS power of attorney, document flow setup, trial month. Transition cost: 100 to 300 euros.

‍

Can I work with an accountant remotely from another city?

‍

Yes. Remote accounting is fully functional thanks to EDS, electronic invoices, and cloud services. No geographic restrictions.

‍

What is included in a basic outsourcing package?

‍

Typically: bookkeeping, monthly VID declaration preparation and filing (including VAT), payroll and social contribution calculations, monthly financial report. Annual report and consultations are often charged separately.

‍

How Lex&Finance Specialists Can Help With Accounting Outsourcing

‍

Lex&Finance provides outsourced accounting services in Riga and Latvia for enterprises of any size. All our accountants are VID licensed and insured. We work in Russian and Latvian and provide remote accounting for clients from any Latvian city. For new clients, we conduct a complimentary current bookkeeping audit and provide a transparent cost calculation before contract signing. Contact us for a free initial consultation through our website lexfinance.lv or by phone.