Outsourced Bookkeeper vs. In-House Bookkeeper: Which Is Better for Your Business?

Once a business owner decides the bookkeeping needs professional attention, the next question is often whether to hire an employee or outsource the bookkeeping.

Both can work. The better choice depends on how much bookkeeping your company actually has, how complex it is, and whether you need someone working inside the business throughout the day.

The Biggest Difference: Paying for a Position vs. Paying for Bookkeeping

An in-house bookkeeper is an employee. You are paying for that person’s workday, not just the minutes or hours when bookkeeping is being performed. The real cost can include wages, employer payroll taxes, benefits where applicable, paid time off, recruiting, training, equipment, management time and turnover.

With outsourced bookkeeping, the business is buying the bookkeeping support it actually needs rather than filling a 40-hour position. That can be especially attractive for a company that needs consistent professional bookkeeping but does not have 40 hours of bookkeeping work every week.

When an In-House Bookkeeper Makes Sense

There are businesses where hiring an employee is absolutely the right answer. If you genuinely have enough bookkeeping and related administrative work to keep someone productive throughout most of the workweek, an in-house employee can be valuable.

An employee is also physically present when the position requires frequent interaction with customers, vendors, managers, paper documents, deposits, inventory or other office responsibilities that go beyond bookkeeping.

The mistake is assuming that needing better bookkeeping automatically means you need another full-time employee.

When Outsourced Bookkeeping Makes More Sense

Outsourcing is often a strong fit when the books need professional attention every month but the workload does not justify a full-time bookkeeping position. It can also make sense when the owner or another highly paid employee is currently doing bookkeeping that could be handled more efficiently by a bookkeeping professional.

Capacity Bookkeeping provides outsourced bookkeeping services with a dedicated bookkeeper who learns your business and works with you directly.

Will I Have to Explain My Business to a Different Person Every Time?

Not with Capacity. One concern business owners sometimes have about outsourcing is ending up in an anonymous service queue. Capacity clients receive a dedicated bookkeeper they can know and communicate with directly.

That person becomes familiar with your accounts, recurring transactions, reporting needs and the way your company operates. You get much of the continuity people value in an employee relationship without having to create another employee position.

What Happens When One Person Controls the Books?

There is another difference that is easy to overlook. A small business may give a single employee enormous responsibility for its financial records. If that person leaves, becomes unavailable, makes mistakes or operates without sufficient oversight, the company can become vulnerable.

With Capacity, your dedicated bookkeeper is backed by an established professional bookkeeping company with organizational oversight, processes and insurance. The relationship is personal, but the bookkeeping function does not depend entirely on one unsupported individual.

What About Vacation, Sick Time and Turnover?

When an in-house bookkeeper is unavailable, bookkeeping work may simply stop unless another employee knows how to perform it. Replacing a departing employee can also mean recruiting, interviewing, hiring and training someone who then has to learn the company’s books.

An outsourced relationship is designed around the bookkeeping function rather than one employee position. That can provide more continuity when personnel changes occur.

Which Option Gives a Business More Flexibility?

Bookkeeping needs change. A growing company may add transactions, accounts, payroll, locations or more complicated reporting. Other businesses may become simpler.

An outsourced arrangement can scale with the amount of work required without forcing the company to decide whether it needs another part-time or full-time employee every time the workload changes.

How Does the Cost Compare?

There is no useful universal monthly number because bookkeeping workloads vary dramatically. A company processing a few dozen transactions a month should not require the same bookkeeping resources as one processing thousands.

Transaction volume is one of the biggest drivers of bookkeeping workload, along with the number of accounts and the complexity of the business. Capacity prices ongoing bookkeeping according to the work the business actually needs and uses a fixed monthly fee.

For a deeper look at pricing, read How Much Do Bookkeeping Services Cost for a Small Business?

What If My Books Are Already Behind?

You do not need to get everything caught up before outsourcing. If accounts are unreconciled, transactions are incorrectly categorized or months of bookkeeping are missing, the first step can be bookkeeping cleanup and catch-up. Once the records are accurate and current, an ongoing monthly process can keep them that way.

Outsourced Bookkeeper vs. In-House Bookkeeper: A Simple Way to Decide

Ask yourself one question: Do we actually have enough bookkeeping and related work to justify paying someone for an entire employee workweek?

If the answer is yes, hiring internally may make sense. If the answer is no, but the bookkeeping still needs consistent professional attention, outsourcing may give you the expertise you need without paying for unused employee capacity.

Why Businesses Choose Capacity Bookkeeping

• A dedicated bookkeeper who learns your business.
• Experienced U.S.-based bookkeeping professionals.
• Fixed monthly fees based on the bookkeeping work required.
• No long-term bookkeeping contracts.
• Organizational oversight, established processes and insurance.
• Experience with QuickBooks and dozens of other bookkeeping and accounting platforms.
• Support for businesses throughout the United States.

Not Sure Which Approach Your Business Needs?

You do not have to decide based on a generic staffing formula. We can look at your transaction volume, accounts, software, payroll and bookkeeping complexity and talk through what level of support makes sense.

Learn more about our small business bookkeeping services or call Call (845) 430-1347 for a no-pressure conversation.