Should You Outsource Your Bookkeeping? Pros & Cons

Every successful small business owner eventually faces the same question: Should you outsource bookkeeping to a professional or handle it on your own? Bookkeeping can be time-consuming, complex, and full of compliance risks. Yet keeping clean, accurate books is essential for the business's financial health and year-round tax readiness.

Outsourcing bookkeeping is becoming an increasingly popular choice among small businesses that want to focus on growth rather than worrying about spreadsheets. In this article, we’ll walk through the pros and cons of outsourcing bookkeeping, when it makes sense to explore this option, and what to look for in a professional bookkeeping partner.

Key Highlights

• Outsourcing bookkeeping can save time and money while giving access to professional expertise and technology.

• Many small businesses find that outsourcing provides better accuracy, scalability, and risk management.

• Challenges like data security or loss of direct control can be mitigated with the right provider.

• 1-800Accountant offers affordable, expert small business bookkeeping services for a tax-deductible fee.

What Does Outsourcing Bookkeeping Really Mean?

Definition and Scope

Bookkeeping involves:

• Recording transactions

• Reconciling bank statements

• Managing accounts payable and receivable

• Generating financial reports

When you outsource bookkeeping, you hire an external provider, often a remote, cloud-based person or team, to handle these functions on your behalf.

Many outsourced bookkeeping services also offer outsourced accounting services, integrating with payroll processing and tax support, although the primary focus is specifically on bookkeeping.

Typical Models of Outsourcing

Outsourced bookkeeping can take several forms:

• Full-service bookkeeping: Covers everything from data entry and reconciliations to reporting and tax preparation. 

• Partial service: Handles select tasks, such as monthly reconciliations or reporting.

• Onshore, offshore, or hybrid: Some providers operate entirely in the U.S., while others use offshore staff for cost efficiency.

• Subscription-based models: Offers monthly pricing instead of variable hourly billing.

The Pros of Outsourcing Bookkeeping

There are many benefits of outsourcing bookkeeping, but it's worth noting that there are both bookkeeping outsourcing pros and cons.

Cost Savings and Predictable Expense

Outsourced bookkeeping vs. in-house bookkeeping. Hiring an in-house bookkeeper comes with:

• Salary

• Benefits

• Training

• Miscellaneous office costs

Outsourcing eliminates most of these expenses while providing access to experienced professionals, and can significantly reduce overhead by converting fixed employee costs into predictable service fees.

Time Savings and Focus on Core Activities

Bookkeeping tasks can easily consume hours each week. By outsourcing, business owners reclaim valuable time to focus on:

• Sales

• Operations

• Strategic planning

Many small business owners start outsourcing once they realize how much of their day is spent managing receipts and reconciliations, rather than focusing on customer service or capitalizing on business growth opportunities.

Access to Expertise, Technology, and Accuracy

Professional bookkeeping providers use the latest cloud accounting tools and bookkeeping automation systems to ensure data accuracy and compliance. This expertise helps:

• Reduce costly errors

• Improve reporting

• Keep financial records audit-ready

Working with a team of experts, such as 1-800Accountant, gives small business owners access to CPAs, EAs, bookkeepers, and other tax professionals who understand both the technical and strategic aspects of bookkeeping and accounting. 

Scalability and Flexibility

As your business grows or slows, outsourced services can easily scale up or down without the hassle of hiring or layoffs. This flexibility is one reason the trend is growing: 37% of small businesses already outsource accounting or IT functions.

Risk Reduction and Improved Controls

Outsourcing introduces an additional layer of oversight. Professional firms maintain internal controls and standardized processes that help prevent fraud and ensure compliance with relevant regulations.

Providers also stay up to date with changing laws and regulations, reducing bookkeeping outsourcing risks and exposure for business owners.

The Cons (and How to Mitigate Them)

Loss of Direct Control or Proximity

Some owners fear they’ll lose visibility into their finances. The key is choosing a partner that provides:

• Real-time access to your books

• Regular reports

• Open communication

With easy-to-read dashboards like those offered by 1-800Accountant, you maintain full transparency while offloading the work to a qualified bookkeeping professional.

Data Security, Privacy, and Trust Concerns

Financial data is sensitive. Always confirm your provider uses:

• Encryption

• Secure cloud storage

• Strict access controls

Request details about compliance standards and confidentiality agreements before signing.

Potential for Misalignment or Poor Fit

If a bookkeeping provider doesn’t understand your industry or uses incompatible bookkeeping software, accuracy and insight may suffer. Mitigate this by confirming industry experience and asking about their onboarding process and tools.

Up-Front Switching, Transition Costs, and Change Management

Transitioning from an internal bookkeeper to an external provider may require time and setup fees. A good partner will:

• Guide you through migration

• Ensure data accuracy

• Minimize downtime

Hidden Costs or Scope Creep

Not all bookkeeping packages are created equal. Avoid surprises by: 

• Reviewing service-level agreements (SLAs)

• Verifying what’s included

• Setting expectations upfront

Transparent models, like 1-800Accountant’s, help maintain budget clarity.

When Outsourcing Bookkeeping Makes the Most Sense

You’re Spending Too Much Time or Money on Bookkeeping

If bookkeeping is taking hours away from your core business, outsourcing may offer relief. Statistics show that 21% of small business owners admit they lack sufficient knowledge about bookkeeping.

Your Business Is Growing or Becoming More Complex

With expansion comes:

• More of your business's financial transactions

• More data

• Higher compliance needs

Outsourcing ensures your financial processes scale smoothly as your business evolves.

In-House Bookkeeping Costs Are Too High, or Turnover is Frequent

When hiring and retaining qualified in-house professional bookkeepers becomes expensive, an outsourced bookkeeper can deliver better quality for less.

You Want Better Financial Reporting and Insight

Outsourced bookkeeping can transform raw data into actionable insight. Providers generate monthly reports and financial summaries that support smarter business decisions.

You Lack In-House Expertise or Modern Tools

If your team isn’t trained in bookkeeping or your systems are outdated, outsourcing brings immediate access to skilled professionals and technology that keeps your books compliant and efficient.

How to Choose the Right Bookkeeping Outsourcing Partner

Define Your Scope, Needs, and Budget

Start by listing what you need and determine how frequently you need updates, including: 

• Transaction recording

• Payroll integration

• Reconciliations

• Reporting

Then, compare pricing models — such as flat-fee versus hourly — to determine what's most advantageous for your operations.

Evaluate Expertise, Industry Fit, and Technology

Select a provider experienced with small businesses in your industry and using modern cloud accounting tools. The best providers pair skilled professionals with advanced technology for maximum efficiency.

Check Data Security, Compliance, and Service-Level Commitments

Ask detailed questions about:

• Encryption

• Data access

• Backups

• Nondisclosure policies

Verify that your provider complies with relevant tax and privacy regulations.

Ensure Communication, Transparency, and Reporting Cadence

Reliable bookkeeping depends on consistent communication. Clarify how often you’ll receive reports, how to request support, and what turnaround times to expect.

Consider Integration and Scalability

Your bookkeeping system should connect seamlessly with other accounting software for: 

• Payroll

• Banking

• Taxes

Confirm that the provider can scale with your business as your volume or needs increase.

Understand Onboarding and Exit Options

Ask about transition timelines, data migration support, and how your records are returned if you ever switch providers. Transparency in these processes reflects professionalism and trustworthiness.

Why 1-800Accountant Is a Compelling Option for Outsourcing Bookkeeping

1-800Accountant, America's leading virtual accounting firm, offers small businesses the best of both worlds: bookkeeping and accounting professionals who are supported by modern technology. Each client receives a dedicated bookkeeper or bookkeeping team that manages transactions, reconciliations, and reporting within a secure, easy-to-use online platform.

With transparent flat-rate pricing, you’ll know exactly what you’re paying for every month, leaving hourly surprises behind. Real-time dashboards and proactive communication keep you informed while freeing your time to grow your business.

1-800Accountant’s approach to bookkeeping goes beyond data entry. The team provides guidance, helps interpret your numbers, and integrates with tax planning for a holistic view of your financial health. Explore client reviews and success stories to see how other small businesses have streamlined their finances through outsourcing with us.

Next Steps

Outsourcing your business's complex bookkeeping can be one of the smartest operational moves you make. It saves time, reduces costs, improves accuracy, and provides the professional oversight every growing company needs.

Of course, it’s not without considerations, including control, security, and alignment. However, with the right partner, those concerns can be fully managed, allowing you to focus more on what truly drives your business forward.

If bookkeeping has become a distraction or you’re ready for more accurate, stress-free financial management, consider 1-800Accountant’s full-service bookkeeping solution. You’ll get expert support, transparent pricing, and peace of mind that your books are accurate and always in good hands.

Frequently Asked Questions

How much does outsourced bookkeeping cost compared to in-house?

Outsourced bookkeeping companies typically cost a fraction of what hiring a full-time employee would. Leading services charge a flat monthly rate that scales with your business size and transaction volume.

What’s the difference between bookkeeping and full accounting services?

Bookkeeping focuses on recording financial transactions and maintaining ledgers, while accounting includes interpreting those records, creating financial statements, and preparing taxes. Outsourced bookkeeping service providers will sometimes offer outsourced finance and accounting services.

Can I still work with my existing accountant if I outsource bookkeeping?

Yes, you can still work with your existing accountant in this scenario. Many outsourced bookkeeping providers collaborate directly with your existing accountant or tax preparer to ensure smooth, accurate year-end reporting.