Most small business owners start out doing their own bookkeeping. It makes sense at first: money is tight and there aren't many transactions. But as the business grows, the books take more time, mistakes get more expensive, and the question comes up: should I hand this off?
For most small businesses, outsourcing is the answer, but not for every business, and not at every stage. Here's how to decide.
What outsourced bookkeeping means
Outsourced bookkeeping means an outside professional, a remote bookkeeper, accountant or firm, keeps your books instead of you or an employee. Today this is almost always done online: they work in your accounting software (usually QuickBooks Online), connect to your bank feeds, and send you financial statements every month.
A typical monthly arrangement includes:
- Recording and categorizing every transaction
- Reconciling every bank and credit card account
- Tracking what customers owe you and what you owe suppliers
- Monthly profit and loss, balance sheet and cash flow statements
- Support for your tax preparer at year-end
The advantages of outsourcing
You get your time back. Bookkeeping done by an owner often happens late at night or not at all. Handing it off frees hours every month for work that actually grows the business.
You get expertise you couldn't afford to hire. An outsourced bookkeeper with years of experience costs a fraction of an experienced employee's salary. See what bookkeeping typically costs for the numbers.
Your books are actually current. A professional closes the books every month on a schedule, so you always know where you stand.
Fewer costly mistakes. Miscategorized expenses, missed deductions, and personal spending mixed into the business are the most common problems in owner-kept books. Each one can cost you at tax time.
No hiring, training or turnover. No payroll taxes, benefits or sick days, and no starting over when an employee leaves.
Better decisions. Reliable monthly numbers mean you can see margins, cash and trends, not just a bank balance.
The disadvantages, honestly
Less control over day-to-day details. Someone outside the business needs answers from you about unclear transactions. A good bookkeeper keeps these questions short and batched.
It's not instant. An outsourced bookkeeper works on a schedule, usually monthly. If you need daily in-person support, an in-house employee may fit better.
You have to share access. Your bookkeeper needs access to your accounting software and statements. Use individual logins, never shared passwords, and work with someone you trust.
Quality varies. Low-cost providers sometimes mean rotating staff and little review. Ask who actually does the work.
Signs it's time to outsource
- You're more than a month behind on your books
- You spend more than a few hours a month on bookkeeping
- You dread tax season because your numbers aren't ready
- You've had a late fee or penalty from sales tax or payroll
- You can't answer "how much profit did we make last month?"
- You're preparing to apply for a loan or talk to investors
- The business has added employees, inventory or sales channels
If several of these sound familiar, outsourcing will likely pay for itself.
When doing it yourself still makes sense
- A brand-new business with very few transactions
- You genuinely enjoy it, have the time, and keep current every month
- You have accounting training yourself
Even then, many owners pay a professional to set the books up correctly at the start and review them once a year. That avoids the most expensive mistakes.
Outsourced vs in-house bookkeeper
| Outsourced | In-house employee | |
|---|---|---|
| Cost | Monthly fee | Salary plus payroll taxes and benefits |
| Experience level | Often senior, at a part-time cost | Depends on who you can afford to hire |
| Availability | Scheduled, mostly online | On site, during working hours |
| Coverage | Continues during vacations and turnover | Stops when they're away or leave |
| Best for | Most small businesses | Larger businesses with full-time volume |
How to choose an outsourced bookkeeper
Ask these before you sign:
- Who will actually do the work? One experienced person, or a rotating team?
- What's included in the monthly fee? Reconciliations, statements, sales tax, payroll, year-end support?
- Which software do you use? Make sure they're experienced with yours.
- How do we communicate, and how quickly do you respond?
- When will I receive my monthly reports?
- Can you catch up past months if my books are behind?
- How is my data kept secure?
Thinking about outsourcing?
I'm a remote bookkeeper and accountant with 38 years of experience, based in Weatherford, Texas, working with small businesses across the US online. You work directly with me, not a rotating team.
See what's included in my bookkeeping services, or book a short intro call to talk about your books.