Bookkeeping is the unsung hero of your business. It’s what keeps your finances on track, your cash flow healthy, and your tax returns stress-free. But it doesn’t happen by magic, oh no. It’s a daily discipline that can quickly get out of hand if neglected or mismanaged.
As a business owner, you have a decision to make – do you manage bookkeeping in-house or outsource it? Some small business owners take it on themselves, but it’s a big ask when you are running a business. Some medium-sized and larger businesses hire an in-house bookkeeper, which is convenient but also expensive. Many growing businesses find that outsourcing bookkeeping frees up valuable time and headspace, especially when work becomes hectic. They also benefit from advanced insights into their financial data and compliance, and many businesses even find that it saves them money in the long term.
There’s no right or wrong answer (but as outsourced bookkeeping specialists, you can probably see where this is heading). Let’s dig into the real-world pros and cons of doing your own bookkeeping versus outsourcing, and help you figure out the best move for your company
What is the difference between in-house and outsourced bookkeeping?
It comes down to who’s handling your numbers and where they’re based.
An in-house bookkeeper is part of your staff and manages the business’s financial records from inside your company. You pay their salary, conduct training, and give them the tools they need to do the job.
Outsourcing your bookkeeping means you hire a third party to manage your day-to-day business finances off-site. That could be a freelancer, an accountant, or a bookkeeping agency like Feral HQ. You pay them a set fee, usually monthly.
Both options can support business needs effectively. An in-house employee gives you complete control, while outsourced bookkeeping services provide access to a broader skill set, advanced accounting software, and real-time reporting without the staff overheads.
In-house bookkeeping vs outsourced bookkeeping services
At Feral HQ, we like to keep things simple, so here’s a handy table to help you see the pros and cons.
| In-house bookkeeper | Outsourced bookkeeping services | |
|---|---|---|
| Control | With an in-house employee, you have direct access to your in-house employee and complete control over their workload. | Transparent but more distanced – though digital tools and accounting software keep you up to date. |
| Cost | Higher: includes salary, benefits, professional training and human resources. | More cost-effective: fixed fee and no employee admin (plus, no need to supply biscuits). |
| Scalability | Limited to the capacity of just one person, unless you take on more hires. | Can be scaled cost-effectively as your business grows |
| Expertise | Depends on your budget – full-time experienced bookkeepers can be expensive. | Access to an experienced team with advanced skills at only a snip of the cost. |
| Efficiency | If you’re doing it properly, bookkeeping is time-consuming, especially when tax season rolls around. | Outsourcing can be much more efficient as professionals have streamlined systems, tools, training and experience. |
| Compliance | You will have to invest in regular training to help your bookkeeper keep up-to-date with tax regulations. | Professional bookkeepers have their finger on the pulse of changing compliance rules. |
| Tech & tools | You must pay for software, maintain it, and provide training. | Access to industry-standard software with no need for costly subscriptions. |
| Errors | With only one person with eyes on the numbers, there’s more room for human error. | If you’re working with a bookkeeping company, your numbers will likely be reviewed by a team. |
| Flexibility | Fixed hours and limited availability. | Flexible plans to suit changing business needs. |
When should you consider outsourcing your bookkeeping?
It might be time to consider outsourcing your bookkeeping when managing your financial records starts getting in the way of actually running your business. If you’re a stretched business owner who’s spending hours doing basic bookkeeping when you could be leading projects, outsourcing could be a valuable lifeline.
It’s also a smart move if you’ve outgrown basic spreadsheets but aren’t quite ready to hire a full-time employee. Professional bookkeepers use the latest accounting software that not only keeps your numbers in check but also provides valuable financial insights to help you run your business.
Another good time to take the plunge and hire an external bookkeeper is if tax returns bring on a cold sweat, or if you’ve already made one too many late submissions. Outsourcing your bookkeeping could be the best decision you make all year, helping you stay compliant and avoid penalties.
Outsourced bookkeeping services can also help if your business struggles to manage cash flow. Bookkeepers can implement real-time reporting and provide regular cash flow statements, so you’ll always have a clearer picture of what’s coming in, what’s going out, and when to trigger plan B.
What types of businesses benefit most from outsourced bookkeeping?
External bookkeeping support suits lots of businesses, including:
- Startups in the early days – when every penny counts and you’re juggling a hundred roles. You need solid financial management, but don’t have the budget – or the hours – to hire and manage your own staff.
- Agencies or consultancies – working with multiple clients means constant invoicing, expenses, and project-based billing. Add in the time-consuming admin, and you’ve got a recipe for burnout.
- E-commerce or subscription businesses – with 24/7 sales, you need real-time financial data to stay on top of stock, customer payments, and accounts payable.
- Seasonal businesses – if your revenue and workload peak at certain times of year, a full-time in-house bookkeeper may not be necessary. Outsourcing gives you the flexibility to scale support up or down as needed.
- Small businesses – sure, you can do your own books on top of everything else – but you didn’t start your business to spend your evenings and weekends squinting at spreadsheets.
- Industries with specific regulations – for example, construction, where compliance, tax rules, and reporting standards are more complicated. A specialist bookkeeper can help you stay out of trouble and ahead of the curve. A specialist bookkeeper can not only ensure compliance but also provide insight into financial records to help inform business decisions.
The truth is, many business owners reach a point where bookkeeping becomes a bottleneck. Outsourcing is often the most efficient way to free up time to enable growth without blowing the budget.
Will I lose control of my finances if I outsource?
Not at all. In fact, many small business owners find that they gain more visibility, not less.
A good bookkeeping services provider will keep your records effortlessly up to date and can provide regular reports so you can make better business decisions. With cloud-based tools like Xero, you’ll still have access to your numbers anytime you need them. You stay in the loop without having to personally manage every invoice or expense.
Don’t think of it as handing over the wheel, but getting a co-pilot.
What to look for in an outsourced bookkeeper?
Like most things, the cheapest option isn’t always the best. It’s about finding someone who will take the time to understand your business, your sector, and your goals.
Here’s what to look for:
- Experience – Look for an experienced team that’s worked with businesses like yours. Word of mouth and online reviews are always a good place to start.
- Tech-savvy – They should offer up-to-date systems that integrate with your existing tools.
- Transparency – Clear pricing, clear reporting, and no hidden costs.
- Flexibility – The service should grow as your business and financial needs grow.
- Specialist knowledge – Especially around tax regulations relevant to your industry.
- Availability – You don’t want someone who goes AWOL when deadlines hit.
And crucially, they should be easy to work with. Find someone who shares your values, is easy to get on with and not just a faceless service on the other end of an email.
Discover how Feral HQ can help with bookkeeping
At Feral HQ, we’re here to simplify your bookkeeping, keep your financial data in check, and free you from the chaos of everyday accounting. We offer flexible, accurate and reliable bookkeeping services and no-nonsense advice you can trust.
Forget juggling spreadsheets, chasing invoices, and sleepless nights about cash flow. Outsourcing your bookkeeping to us could be a serious game-changer, and you may even save money in the long run.
If you’re ready to tame your finances, get in touch today.
