In-House Bookkeeper or Bookkeeping Service – Which Should I Hire?

Since we are in the business of providing bookkeeping services, a common question we receive is “Should I hire an in-house bookkeeper or outsource to a bookkeeping service?”  There is no one-size-fits-all answer to this question because there are many variables. We have put together some areas to consider when you need to make this decision.

Should I hire an in-house bookkeeper?

Are you considering hiring an in-house bookkeeper?  Reviewing these following areas can help you to see if this is the best option for your situation:

Quality – There can be mixed results when hiring an in-house bookkeeper.  You may hire someone who is awesome and provides high-quality work, or you may hire someone who is not very good at doing bookkeeping.  Many small business owners do not really know how to determine if their bookkeeper is doing a decent or even a great job with their bookkeeping.  

Your Time – You may need to spend quite a lot of time to train your hire to be able to do the bookkeeping.  And if they end up not staying on with you, you may need to repeat this training multiple times.

Cost – Hiring an in-house bookkeeper most likely means that you will be hiring an employee. According to Salary.com, the average bookkeeper salary in the US is $43,106.  In addition to the salary being paid, be sure to consider all of the other employer costs you will be responsible for as well.  Even if you hire someone part-time, the annual cost could well be more than $20,000 per year.

Continuity – Many small business owners that we speak with have had a long string of bookkeepers.  Oftentimes this means that their bookkeeping methodology has changed many times and that there is a lack of consistency in their records.  It sometimes means that the bookkeeping has fallen behind as well since it takes time to hire a replacement when someone leaves.

Should I hire a bookkeeping service?

Most times we speak with business owners who are considering hiring a bookkeeping service, like ours.  Sometimes this is because they are new in business, they have grown to the point that the business owner no longer has time to continue doing their bookkeeping or perhaps they had a bookkeeper who has left.  Reviewing these following areas can help you to determine if hiring a bookkeeping service is the right option for you:

Quality – Working with a high-quality bookkeeping service means that you are working with professionals who are trained in bookkeeping.  They will have systems in place so that your bookkeeping will be done properly and in a timely fashion.  

Your Time – An experienced bookkeeper has worked with many small businesses and knows what needs to be done and how to do it.  This means that you will not need to train them how to do their job.  

Cost  – Gone are the days when a bookkeeping service charges by the hour.  This is great for you as the business owner because you have no idea how long it might take for even a trained bookkeeper to do specific tasks.  Rather, many bookkeeping services these days offer their services for a fixed fee. This includes outlining the specific scope of what work is included and the requirements and expectations for both parties.  In this way, everyone involved is aware of what is included in the service and the timeline as well.

Continuity – A high-quality bookkeeping service has processes and procedures in place.  This means that there will be consistency in how your bookkeeping is done. It also means that if one staff member leaves, there are others that know what is going on in your business and that can continue to support you.

Can I work with a bookkeeping service even if I have an in-house bookkeeper?

For some of our clients, we handle all of their bookkeeping.  However, many of our clients have an in-house person (or persons) who manage some, if not many, of their bookkeeping functions.  So why would a bookkeeping service be helpful?

Training – Many bookkeeping services also provide training.  For example, we provide at least one training session with our accounting software set-ups.  It may make the most sense for an in-house employee to provide some of the routine bookkeeping functions such as invoicing, receiving payments and the like.

Reviewing – Many bookkeeping services will review the work done by your in-house worker.  By regular reviewing of the books, they can identify it there are areas not being done properly.  We have found reviewing on a regular basis, such as monthly or quarterly helps us to identify any potential problem areas as they occur rather than waiting until year-end and then realizing that there is a need for a large clean-up project.

Collaboration – A determination can be made as to what the business needs are, the abilities and availability of the in-house staff, and where the professional expertise of a high-quality bookkeeping service will have the biggest impact.  Cloud-based accounting and related solutions make collaboration viable.

So should you hire an-in house bookkeeper, hire a bookkeeping service, or perhaps utilize both?  The answer to this is as individual as you and your business.