Outsourcing your bookkeeping: benefits, costs and how it compares with doing it yourself

Every owner of a small business reaches the same point. The business is growing, the paperwork is piling up and the weekend is disappearing into receipts. The question is whether to keep doing the bookkeeping yourself, hire someone to do it in-house, or hand it to an outsourced service. The right answer depends on arithmetic, not instinct, and the arithmetic is simple enough to do in a few minutes. This article sets out the three options honestly, with costs, trade-offs and a method for deciding.

The three options

Do it yourself. You or a family member keeps the books, using software or spreadsheets. No cash cost, but a real time cost, and the quality depends on your skill and discipline.

Hire in-house. A part-time or full-time employee does the bookkeeping. You pay salary, employer National Insurance, pension, holiday and sickness cover, plus software, equipment and management time.

Outsource. An external bookkeeper or bookkeeping firm does the work, usually remotely, for an hourly or monthly fee, with no employment costs and cover built in.

What it costs to do it yourself

The cash cost is nearly zero beyond software. The real cost is your time. If you spend six hours a month on bookkeeping and your time is worth £40 an hour, that is £240 a month, more than the typical cost of outsourcing. The price is rarely visible because it appears as lost sales, late evenings and delayed invoices rather than a bill.

DIY also carries error risk. Mistakes in VAT, expenses and categorisation can cost money in unclaimed expenses, penalties and extra accountancy fees. Our post on bookkeeping mistakes lists the most common ones.

What it costs to hire in-house

For a very small business, a full-time bookkeeper is rarely justified. A part-time employee is more realistic, but the true cost includes more than the headline pay:

• Salary or hourly wage
• Employer National Insurance, at 15% above £5,000 of annual earnings
• Employer pension contributions under auto-enrolment
• Holiday pay and sick pay, which leave gaps in cover
• Recruitment and training
• Software, equipment and desk space
• Management time

A part-time bookkeeper working one day a week costs far more than most small businesses need to spend, because you pay for a full day even when the work takes three hours. In-house makes sense when you have enough volume to keep someone busy, you need someone on site, and you want control close at hand.

What it costs to outsource

Outsourced bookkeeping is priced for the work actually done. At Bookkeeping Services the rate is a flat £15 an hour with no contract and no set-up fee beyond the quoted onboarding time. The hours are driven mainly by transaction volume. Our instant quote uses the following approach for typical businesses.

Business	Transactions a month	Hours	Monthly cost
Freelance designer	About 40	3	£45
Landlord with 3 properties	About 60	3	£45
Limited company, VAT registered	About 150	7	£105
Shopify store	About 300	11	£165

See how much bookkeeping costs for the full explanation, or use the instant quote for your own figure.

A simple break-even test

Compare the options with three numbers:

1. Hours you spend on bookkeeping each month (include chasing receipts and fixing mistakes).
2. What an hour of your time is worth, either what you could earn or what you would pay someone to cover your work.
3. The outsourced monthly price from a quote.

If hours × hourly value is greater than the outsourced price, outsourcing is cheaper before you even consider quality. For example, four hours at £30 is £120, which is more than a typical £105 monthly cost for a VAT-registered limited company. The benefit is larger if outsourcing also frees you to earn more.

Beyond cost: the benefits of outsourcing

Accuracy. A trained bookkeeper knows the rules for VAT, CIS, PAYE and Making Tax Digital, and catches errors you might miss. See our guides to VAT and Making Tax Digital.

Timeliness. Books are done monthly on schedule, so you see your position when it matters, not months later.

Cover. There is no gap when someone is ill or on holiday, because a firm has a team behind each client.

Compliance. Deadlines are tracked, and records are kept in the form HMRC expects.

Scalability. As volume rises, hours rise with it. There is no need to hire or fire.

Better decisions. Regular reports show profit, cash and trends in plain English. See management reports and cash flow.

Lower accountancy fees. Clean books reduce your accountant's time at year-end.

Peace of mind. The nagging backlog disappears.

Risks and how to manage them

Outsourcing is not risk-free. Address these sensibly.

Data security. Ask how the provider accesses your records. Good practice is accountant or advisor invitations in your accounting software, two-factor authentication and no sharing of passwords. See our privacy policy.

Communication. Agree how queries are handled and how quickly you will reply.

Scope creep. Be clear about what is included, and ask for an engagement letter.

Dependency. Make sure you retain ownership of the accounting software subscription and the data, so you can leave whenever you like.

Quality. Check qualifications and ask for references. See what a bookkeeper does for what to look for.

When outsourcing makes the most sense

• You are VAT registered, or approaching the £90,000 threshold
• You are in or approaching Making Tax Digital for Income Tax
• You have employees and payroll
• You sell on marketplaces with complex payouts
• You are months behind, and need catch-up bookkeeping
• You dread the work, and it keeps getting delayed
• Your time is better spent on the business

When DIY might still be right

• You have very few transactions
• You enjoy it and keep to a monthly routine
• Your records are already tidy
• You have good software with bank feeds

Even then, many owners use an occasional bookkeeping health check to catch errors. Request one on our contact page.

How to switch to outsourcing smoothly

1. Get an instant quote and agree the scope.
2. Share access to your accounting software by invitation.
3. Hand over the records for the current year and any backlog.
4. Agree a monthly routine: when you send receipts, when reports arrive.
5. Review after three months and adjust.

Our monthly checklist shows what a good monthly cycle looks like.

A realistic first month

If you decide to outsource, here is what the first month usually looks like. In the first few days you get your quote, pay online and invite your bookkeeper to your accounting software. Over the next week they review your file, connect the bank feeds and flag any issues, such as unreconciled balances or missing opening figures. By the end of the second week your records are being updated and you receive your first questions, usually a short list of transactions to identify. At month end you receive reports and a summary. The effort on your side is mainly answering those questions and forwarding receipts, which takes minutes, not hours.

Frequently asked questions

Is outsourced bookkeeping secure?

It can be, if the provider uses invitation-based access, two-factor authentication and a clear data policy.

Can I stop outsourcing whenever I want?

With us, yes. There is no minimum contract, and you keep ownership of your software and data.

Is outsourcing cheaper than hiring someone?

Almost always for small businesses, because you pay only for the hours worked, with no employment overheads.

Will I lose control of my finances?

No. You keep access to everything and receive regular reports. You make the decisions.

How do I get started?

Use our instant quote to see the cost, then pay online.