DIY Bookkeeping vs. Hiring a Bookkeeper: Costs, Risks & Benefits

Running a small business often means wearing multiple hats: sales, marketing, operations, customer service, and, of course, bookkeeping. For many entrepreneurs, the decision often comes down to whether to manage their own books or to turn to professional help. Both options have pros and cons, and the right choice depends on your business’s size, complexity, and growth stage.

This guide breaks down the differences between do–it–yourself (DIY) bookkeeping and hiring a bookkeeper so that you can make a confident and informed decision.

Key Highlights

• DIY bookkeeping can be cost-effective but carries risks of errors and missed tax savings.

• Professional bookkeepers save time, improve accuracy, and help prepare your business for growth.

• Outsourced bookkeeping is often more affordable than hiring an in-house employee.

• Very small, low-transaction businesses may benefit from a DIY approach, while growing businesses gain more from professional support.

• 1-800Accountant offers flat-rate, tax-deductible full-service bookkeeping backed by real bookkeepers — making professional outsourced bookkeeping both accessible and cost-efficient.

What Is DIY Bookkeeping?

DIY bookkeeping means you, the business owner, manage your own financial records. This can be done with spreadsheets or through accounting software such as QuickBooks and Wave.

Pros of DIY Bookkeeping

• Lower upfront costs: Software is relatively inexpensive ($0–$50/month).

• Full control: You see every transaction firsthand.

• Hands-on financial knowledge: You gain a deeper understanding of your cash flow.

Cons of DIY Bookkeeping

• Time-consuming: Tasks such as reconciliations and categorizing expenses can consume hours each month.

• Risk of errors: Without proper training, bookkeeping mistakes can result in IRS penalties or incorrect reporting.

• Limited expertise: You may miss deductions, overlook compliance requirements, or fail to prepare for growth.

Common Mistakes in DIY Bookkeeping

Even careful small business owners make errors when handling their own books. Some of the most common mistakes to avoid include:

• Missing valuable tax deductions due to a lack of knowledge.

• Mixing personal and business expenses, complicating your otherwise accurate financial reports.

• Keeping inaccurate records that may lead to IRS penalties – failure-to-file penalties can reach up to 25% of unpaid taxes.

• Poor cash flow tracking, leaving blind spots in financial planning.

These mistakes typically erase the cost savings of a DIY bookkeeping approach and cost more than professional support. 

What Does a Professional Bookkeeper Do?

A professional bookkeeper manages financial records by categorizing expenses, reconciling accounts, and ensuring accuracy in day-to-day business transactions.

More than just record-keepers, bookkeepers help prepare your business for tax season, maintain compliance, and provide insights for financial decision-making.

1-800Accountant offers affordable virtual bookkeeping services that pair expert bookkeeper support with modern software, for maximum peace of mind.

Benefits of Hiring a Bookkeeper

• Save time: Businesses save an average of 25 hours during tax prep, which outsourced bookkeeping supports.

• Accuracy: Reduced risk of errors, missed tax deductions, and penalties.

• Proactive insights: Professionals identify financial patterns and offer guidance.

• Scalability: Services adapt as your business grows, ensuring processes remain current.

Cost Comparison: DIY vs. Hiring a Bookkeeper

For most small businesses, outsourcing strikes the best balance between cost and expertise.

When DIY Bookkeeping Makes Sense

DIY bookkeeping is a good fit if:

• You’re a very small or new business with minimal transactions.

• You’re comfortable with numbers and willing to learn bookkeeping basics.

• You’re on a tight budget and need to keep expenses minimal in the early stages.

When Hiring a Bookkeeper Is the Smarter Choice

Hiring a bookkeeper or outsourcing makes more sense if:

• Your business is growing rapidly, and your transactions are becoming increasingly complex.

• You work in a highly regulated industry, such as healthcare, trucking, or food service.

• You value your time and want to focus on sales, operations, or strategy.

• You can’t afford to miss deadlines or deductions, which could result in costly penalties.

How to Choose the Right Bookkeeping Solution

Deciding whether to do bookkeeping yourself, hire an in-house bookkeeper, or outsource to trusted bookkeeping professionals can be difficult. When evaluating options, consider:

• Cost: Hourly rates add up; flat-rate pricing is often better for small business bookkeeping.

• Level of service: Does the provider offer just bookkeeping or a full-service accounting solution?

• Industry expertise: Choose a firm that understands your field’s compliance needs.

• Software integration: Modern bookkeeping software makes record-keeping a seamless process.

1-800Accountant, America's leading virtual accounting firm, provides comprehensive all-in-one virtual accounting services, including bookkeeping, tax preparation, and payroll management. Clients benefit from flat-rate pricing, no hourly billing, and access to real CPAs, EAs, bookkeepers, and tax professionals familiar with your state and industry.

Final Decision: Which Is Right for You?

Which bookkeeping solution is best suited for your current business needs? The bottom line:

• DIY bookkeeping is a short-term option for owners with simple business finances and limited budgets.

• Professional bookkeeping is the smarter long-term solution for growth, compliance, and peace of mind.

There’s no wrong choice, but outsourcing ensures your books are accurate, deadlines are met, and your time is freed up to focus on business growth.

Get a Free Consultation with 1-800Accountant

Ready to upgrade your bookkeeping and financial management? Schedule a free, 30-minute consultation with a small business expert today so you can free up your time and focus on what you do best: growing your business.