In House Bookkeeper Vs Outsourced Bookkeeping Services: Which is the Proper Bookkeeping Method?

To manage the finances of your business, having a proper bookkeeping method is key. Bookkeeping can help your business grow, keep track of your finances, prepare a timely budget for your anticipated expenses, provide an overview of how your business is doing and give a precise image of your finances to your stakeholders. Most importantly, bookkeeping helps you be well prepared for the tax period.

With so many benefits to bookkeeping, investing in professional bookkeeping help is the right thing to do for your business. When you know that your finances are in good hands, you will be able to put all your attention and energy into growing your business.

Which Bookkeeping Services are Available?

Now that you know you need professional help, what do you do?

Most businesses choose between the two convenient bookkeeping services available

1. In-house Bookkeeper
2. Outsourced Bookkeeping

 In-house Bookkeeper

Hiring a professional bookkeeper for your business who will work full-time at your office is known as an in-house bookkeeper. They will be in charge of recording the day-to-day transactions and keep track of any changes in monetary terms. A bookkeeper will maintain the records properly so that your business can run smoothly and have no issues with cash flows.

When choosing the option of an in-house bookkeeper, there are plenty of factors that come into play. 

You have to go through the process of hiring such as putting up a job advertisement on job portals to shortlist qualified bookkeepers near you. 

You then have to arrange a formal interview with many candidates and go through the long process to finally select the right employee for your business. 

The whole process takes up a lot of time and energy itself. 

The process doesn’t end here. You will have to train, manage and supervise your employees throughout their working period.

Outsourced Bookkeeping Service

Apart from the traditional method of hiring a specialist to balance your books, you can get a bookkeeping solution by a group of experts through outsourced bookkeeping services. The trend of outsourced bookkeeping services is on the rise and for a good reason. Companies of all sizes are leaning towards outsourcing bookkeeping services because of its lucrative perks and getting the best value for their money. 

Most startups suffer due to a lack of proper implementation of bookkeeping methods. However, if you choose to give your time and energy into bookkeeping, you will actually be spending your precious time doing low-value tasks. As a business owner, your focus should on growing the business and let bookkeeping professionals do what they are best at.

But just like everything, outsourced bookkeeping services come with a few drawbacks and may not be the solution to all your financial worries. 

Outsourced bookkeeping services may have hidden costs, you may have less control over them, and instant communication may not be possible at times.

In house bookkeeper Vs. Outsourced bookkeeper

Let’s evaluate some key differences between In-house Bookkeeper Vs Outsourced Bookkeeping Services

1. Quality and Training 

With in-house bookkeeping, you will be hiring one qualified bookkeeper to handle the finances. You will be in charge or have someone else train the employee regularly to ensure that they are updated with the best bookkeeping practices. Training your employees can be beneficial but also time-consuming for your business. You will be paying them for learning as a matter of fact.

While with outsourced services you will have an entire team of experts dedicated to working on the finances of your business who already have gone through quality tests, required training and are continuously being trained to perfection.‘Two heads are better than one’ the quote stands true in this case. 

Getting outsourced bookkeeping services eliminates the excruciating process of hiring and training an employee to meet your company’s needs. 

2. Which Option is the Safest?

Handing over the financial responsibility to an employee can turn out to be a risky decision for your business. It’s not an uncommon scenario to face fraudulence because your employee has all the access to the finances and a fake expense can go undetected for years. Financial pressures can lead a stressed-out worker to do something wrong when there are no options left. 

When a group of professionals is in charge of your bookkeeping, you will not have to worry about your finances. There are barely any chances of fraudulence through strict regulations and the involvement of a team. So any error or misconduct will not go undetected.  

3. Having Accurate Financial Reports

Preparing financial reports at the end of every month or whenever you need them can be a daunting task for your employee who already has many other job responsibilities to juggle with. Unable to produce an informative and useful financial report on time can hamper in your business’s decision making and mess up the cash flow.

 

When you outsource this responsibility, the service providers have dedicated workers to create accurate and provide meaningful insights into the financial reports just when you need them. Your business will always be prepared with up-to-date financial reports be it for potential investors, stakeholders or any bank loans that you may need.

4. How Much do Each of Them Cost?

According to Glassdoor, In-house bookkeepers can cost around $35,000 to $55,000 per year and even up to $70,000 in high-cost cities. The sum adds up as you need to provide medical coverage, employee benefits, casual and sick leaves, payroll taxes, gratuity, etc depending on your company’s policy. 

Outsourced Bookkeeping services can cost around $6,000 to $30,000 or more depending on your business’s size and requirement with no other extra costs to maintain them.

Some Final Words 

So which bookkeeping service should you opt for?

Depending on your business’s needs, you can choose an in-house bookkeeper if you prefer the traditional way of managing your books and having someone at the office to work along with. For big businesses, affording specialist bookkeepers to get the job done may be the right choice.

If your business is looking to get the best value for their money and not have to worry about managing an employee along with the risks associated with depending on a single worker to handle everything, then outsourced services is a wise decision.

You will be paying very less for a highly qualified team of experts who are regularly trained and are up-to-date with required bookkeeping knowledge. The chances of being a victim of fraudulence decrease significantly. You will never have to worry about the tax season and get stressed out.

At Centrosome, we provide a wide range of accounting and bookkeeping services that are catered to all industries in both Canada and the US. Helping small business owners just like you to figure out what the business needs most in order to maintain its financial health and grow is our mission.

Contact us for a free one-hour consultation and we will customize a plan specifically for your business needs!