Should you outsource bookkeeping? Benefits, costs, and how it works

Bookkeeping can be a headache for big and small business owners —so much so that 46% of business owners said it was their least favorite task. The process of recording all financial transactions is often challenging and stressful, as there are many other important day-to-day tasks for startup business owners to handle. It’s easy to put bookkeeping and other back-office tasks on the back burner.

Luckily, accounting and bookkeeping no longer have to be solely the business owner’s responsibility. It’s becoming increasingly common for businesses to outsource bookkeeping to take care of the pesky task of handling financial transaction records. 

Wondering if outsourced bookkeeping is a good fit for your business? This guide breaks down your options and weighs the benefits and potential drawbacks so you can make an informed decision. 

Jump to:

• What is outsourced bookkeeping?
• How does outsourced bookkeeping work?
• What do bookkeepers do?
• 7 benefits of outsourcing bookkeeping
• Potential challenges with an outsourced bookkeeper
• How much do outsourced bookkeepers charge?
• How to outsource your bookkeeping
• How QuickBooks Live Bookkeeping can help

What is outsourced bookkeeping?

Outsourced bookkeeping is when a person or company performs your bookkeeping tasks out of the office. Oftentimes, a bookkeeping service is essential for business growth and health. It frees up your in-office team to focus on their core responsibilities while helping you avoid the cost of hiring and maintaining an in-house bookkeeping staff.

Essentially, you’ll give a third-party bookkeeper access to important financial information like bank statements, payroll, tax documents, and your accounting software. They'll take it from there, keeping your ledgers current, tracking income and expenses, generating financial reports, and performing other key tasks that keep your finances in order.

How does outsourced bookkeeping work?

Outsourced bookkeeping services are a symbiotic relationship between your business and a third party that will balance your books. Although the process may differ for small versus large companies, the steps will generally remain the same.

1. Your accountant will gain access to your financial accounts and software.
2. Your accountant will work behind the scenes to balance your books, monitor cash flow, and create financial reports.
3. At the end of each month, your accounting team will send over a financial report.

What do bookkeepers do?

While a certified public accountant (CPA) will provide insight and analysis of your financial data, bookkeepers will get into the nitty gritty of your day-to-day transactions. Bookkeepers are responsible for keeping records of all financial statements and transactions made by a business. They handle the foundational tasks that prepare your records for your accountant at the end of each period.

Bookkeepers use an accounting journal or an online accounting program to keep track of each transaction and its purpose. Bookkeepers also handle payroll and payroll taxes, send invoices, handle accounts payable, and monitor overdue accounts. All these seemingly small tasks combined create one big job. Without a great bookkeeper, your company could be losing thousands of dollars each period.

7 benefits of outsourcing bookkeeping

Outsourced bookkeeping gives you access to expert support without the overhead of a full-time hire. Here are seven key ways it can benefit your business.

1. Frees up your time

If you’re handling the books yourself, you know how time-consuming tracking expenses, reconciling accounts, and staying on top of paperwork can be. Outsourcing shifts that responsibility to a trained professional, so you can spend less time in spreadsheets and more time running your business. It’s a practical way to improve day-to-day efficiency while keeping your financial data accurate and accessible.

2. Adapts to your business needs

With outsourced bookkeeping, you have more room to scale. Need extra help during busy months? Want to dial it back during slow seasons? You only pay for the support you need. 

It’s a flexible solution that helps you avoid overstaffing while giving you access to specialized expertise—including compliance and industry-specific knowledge—without the cost of a full-time hire. Many outsourced bookkeepers work seamlessly with your tools and processes, so the support feels like a natural extension of your team.

3. Saves money

Outsourcing bookkeeping is cost-effective and will save your company money. Experienced bookkeepers are often better at finding overdue clients and cuts your company could make to increase overall profit. 

Plus, having an outsourced bookkeeper means you’re not technically their employer. You won’t have to worry about their insurance, benefits, or training.

Think of it this way: The average bookkeeper in the United States makes about $49,000 per year. If you outsourced bookkeeping at $2,500 per month, you’d spend $30,000 per year, saving your company about $19,000.

4. Lowers risk of errors and fraud

Outsourcing bookkeeping builds in checks that help prevent costly mistakes and fraudulent transactions. For example: 

• Greater oversight through cloud-based tools: External bookkeepers typically work with real-time accounting platforms, giving you and your team continuous access to records and activity. That visibility makes discrepancies easier to spot and address before they escalate.
• Independent reconciliation and review: Routine account matching by dedicated professionals creates an extra layer of scrutiny. According to QuickBooks, reconciling books monthly is the number one secret to preventing fraud.
• Built-in fraud prevention best practices: Outsourced services often incorporate separation of duties, documented workflows, and traceable audit trails—all proven methods for minimizing fraud risk.
• Expertise without a learning curve: Outsourced bookkeepers are trained in compliance, risk management, and cloud accounting. They hit the ground running, helping reinforce your financial recordkeeping from day one.

5. Provides deeper financial clarity

Outsourced bookkeepers often specialize in cloud-based accounting systems like QuickBooks Online, which offer financial clarity and actionable business insights. This technology can make it easier to generate and access detailed reports—such as profit and loss statements, balance sheets, and cash flow statements—on demand.

On the other hand, traditional in-office workflows may use manual processes that delay financial reporting.

6. Makes tax season easier

It’s no secret that tax season can be a headache. Well-maintained books can make preparing for tax season faster and easier. Up-to-date reports will be provided monthly, giving you a good idea of how much you’ll owe when tax season hits. Bookkeepers can also help with tax preparation and can help you navigate your tax returns.

7. Leverages the latest bookkeeping technology

Outsourced bookkeeping gives your business access to the latest cloud-based accounting software. Professional bookkeepers may also use automation to handle tasks like expense tracking, bank reconciliation, and reporting, maintaining accurate records with less manual work.

You’ll benefit from secure online access, dynamic updates, and customized reports—all while saving time and reducing errors. The best bookkeeping providers stay on top of new tech and best practices, so you always have efficient tools that grow with your business.

Potential challenges with an outsourced bookkeeper

While outsourcing your bookkeeping has clear advantages, there are some challenges to keep in mind. Knowing these ahead of time can help you make an informed decision and set your bookkeeper relationship up for success.

Trust and data security

You’re handing over sensitive financial data to someone outside your business. That requires a high level of trust and solid data protection. Choose a reputable provider, confirm security protocols, and clarify how your information will be handled and stored.

Communication gaps

Time zone differences, email delays, or unclear expectations can lead to miscommunication. Establish consistent check-ins and define your preferred communication tools and response times upfront.

Limited business familiarity

Unlike an in-house hire, outsourced bookkeepers may not fully grasp your business’s operations or industry quirks. This can lead to miscategorized transactions or missed insights unless you provide context and documentation.

Oversight and quality control

Since you’re less involved in the day-to-day, errors may go unnoticed. Even when working with professionals, mistakes can happen. Be sure to review reports regularly and ask questions to stay in the loop.

Cost surprises

While outsourcing is often more affordable than hiring in-house, costs can increase as your business grows or requires extra services. Using a service like QuickBooks Live Bookkeeping helps you stay on budget with transparent pricing and tiered plans.

Tool and system compatibility

Your bookkeeper might use software or processes different from the ones you currently use. Ask early on about tool preferences and whether training, setup, or migration will be required.

Less hands-on control

When you delegate financial tasks, you give up a bit of day-to-day control. This frees up time but also means you’ll need to rely on reports, check-ins, and trust to stay informed.

Potential for inconsistent service

Freelancers or small teams may juggle multiple clients or be unavailable at times. Ask about coverage, backup plans, and workload to ensure your needs won’t fall through the cracks.

How much do outsourced bookkeepers charge?

Outsourced bookkeepers generally charge based on the complexity and volume of a business’s financial transactions. That means bookkeeping costs will likely scale with the size of business and financial accounts, so small businesses will pay less than enterprises for these services.

For small businesses with basic bookkeeping needs and lower transaction volumes, services may start at around $300 per month. For companies with multiple revenue streams, inventory, or complex payroll requirements, outsourced bookkeeping could expect to pay $2,500 or more monthly.

Here are a few factors that can influence how much you’ll pay:

Transaction volume

The more expenses, sales, and deposits you process, the more time it takes to categorize and reconcile them.

Revenue streams

Businesses with multiple income sources or departments may require more detailed tracking and reporting. For example, a company with both e-commerce and in-person sales may need a more complex setup than one with a single sales channel.

Payroll needs

If your bookkeeper handles payroll, the number of employees and pay schedules will impact pricing.

Inventory management

Tracking inventory adds complexity to bookkeeping, especially if you need to monitor the cost of goods sold (COGS) or restocking levels. For instance, a manufacturer or retailer with fluctuating inventory will require more involved recordkeeping.

Catch-up or cleanup work

If your books are behind or need correcting, many bookkeepers charge a one-time fee to get everything in order before ongoing maintenance begins.

Frequency of reporting and meetings

You may want weekly financial reports or regular check-ins, while others prefer a more hands-off approach.

Location and service model

Local bookkeepers in major cities often charge more than those in smaller towns. Freelancers may be more affordable than full-service firms, but pricing depends on experience and services offered.

How to outsource your bookkeeping

There are a few decisions to make when outsourcing bookkeeping—most notably, local vs. virtual and freelancer vs. firm. All options have pros and cons that depend on what you’re looking for from your bookkeeping service. Follow these steps. 

Step 1: Select your format: local vs. virtual bookkeeping

When outsourcing, you’ll first need to decide whether you prefer a local or virtual bookkeeping format. Each offers its own advantages depending on your business needs.

Local bookkeeping

Hiring a local bookkeeper involves working with someone in your area who may visit your office and handle physical documents. It’s a good fit if you prefer face-to-face meetings or keep paper records.

Benefits:

• In-person collaboration and relationship-building.
• Easier to manage physical paperwork.
• May understand local business nuances and regulations.

Potential drawbacks:

• May charge more for travel or in-person visits.
• Limited by local talent availability.
• Often slower to adopt cloud-based tools.

Virtual bookkeeping

Virtual bookkeeping is done remotely using cloud-based tools. It offers real-time access to your financial data and is ideal if you're comfortable with digital communication and paperless processes. Some services provide on-demand bookkeeping support when you need it.

Benefits:

• Access to a broader talent pool.
• Typically more affordable due to lower overhead.
• Real-time updates and easy collaboration through cloud platforms.

Potential drawbacks:

• No in-person support.
• Requires comfort with technology and digital communication.
• Time zone differences may affect response times.

Step 2: Select your workforce: freelancer or bookkeeping firm

Once you’ve chosen between local and virtual bookkeeping, the next step is deciding who will handle the work: an independent freelancer or a full-service bookkeeping firm. Both have unique benefits depending on how much support you want and how you prefer to collaborate.

Freelancer

A freelance bookkeeper is a self-employed professional who works independently and may serve multiple clients. They typically work remotely or on a flexible basis and are hired directly by your business, usually on an hourly or flat-fee basis.

Benefits:

• One-on-one attention and personalized service.
• Often more flexible with pricing and hours.
• Easier to build a consistent working relationship.

Potential drawbacks:

• Limited availability, especially during busy seasons.
• May lack backup if they take time off or become unavailable.
• May not offer a full suite of services like payroll or tax filing.

Bookkeeping firm

A bookkeeping firm is a company that provides professional bookkeeping services. It typically assigns a team or a dedicated point person backed by a team—to your account. Firms may specialize in bookkeeping alone or offer broader accounting and advisory services.

Benefits:

• Access to multiple professionals and broader expertise.
• Reliable coverage, even if one person is unavailable.
• Often includes additional services, like payroll or tax prep.

Potential drawbacks:

• May be more expensive than working with a freelancer.
• Less personal since communication may go through different team members.
• Less agility to tailor services or processes.

Which route is best for you?

Your ideal bookkeeping approach depends on how your business operates, how hands-on you want to be, and how complex your financial needs are. Here’s a breakdown to help you decide.

Consider a bookkeeping firm if:

• You run a growing business with high transaction volume or multiple revenue streams.
• You need full-service support, including payroll, tax preparation, or budgeting help.
• You prefer having a team available so nothing falls through the cracks, even when someone’s out of office.

Best for: E-commerce brands, professional service firms, franchises, or companies scaling quickly.

A freelancer may be a better fit if:

• You need help with basic tasks like invoicing, categorizing expenses, or reconciling accounts.
• You prefer a one-on-one working relationship with a single point of contact.
• You’re cost-conscious but still want experienced support.

Best for: Freelancers, independent contractors, sole proprietors, or small local businesses.

Go local if:

• You want someone nearby who can work with paper records or meet in person.
• You need help with tasks that involve physical documents or prefer face-to-face collaboration.

Best for: Brick-and-mortar shops, trades businesses, or businesses new to digital bookkeeping tools.

Think about virtual if:

• You’re comfortable using cloud-based tools and want access to real-time financial data.
• You prefer digital communication and automated processes.

Best for: Remote-first companies, tech-savvy entrepreneurs, or businesses that value flexibility.

Step 3: Interview candidates

After narrowing down what type of outsourced bookkeeping will work best for your business, it’s time to meet potential candidates and ask the right questions.

Whether you're talking to a freelancer or a firm, virtual or local, use the interview to assess their experience, skills, communication style, and business knowledge.

Tips for interviewing candidates

To make the most of your time with potential candidates, plan your questions carefully. Here are some questions to ask:

• What industries do you typically work with?
• How do you usually communicate with clients (email, phone, virtual meetings)?
• Are you comfortable working with my preferred accounting software (e.g., QuickBooks Online)?
• What’s your typical response time for questions or updates?
• What’s included in your standard services? What might be extra?
• Can you walk me through your onboarding process?
• How do you handle time off or coverage?
• Are you insured or bonded?

When communicating with your candidate, you’ll want to pay attention to the following:

• Professionalism: Do they reply promptly, respectfully, and clearly during your early interactions?
• Clarity and transparency: Can they explain their processes, pricing, and expectations in plain terms?
• Tech proficiency: Do they show confidence working with your accounting tools and demonstrate experience with similar systems?
• Assessment readiness: Are they willing to review your current books and provide feedback on the scope and level of support needed?

Additional tips when interviewing outsourced bookkeeping professionals:

• Ask for examples: Have your candidate walk through how they’ve helped other businesses similar to yours improve processes or catch errors.
• Request references: Follow up with past clients to get a sense of reliability, communication, and work quality.
• Check for compliance knowledge: Ask how they stay updated on tax laws or regulatory changes that might affect your industry.
• Discuss availability: Make sure their working hours align with your expectations.
• Gauge flexibility: Ask how they handle urgent requests, shifting workloads, or onboarding to your preferred systems.

How QuickBooks Live Bookkeeping can help

If you’re thinking about outsourcing your bookkeeping, you’re in good company— 71% of businesses choose to outsource at least some level of finance and accounting services, including bookkeeping. It’s a great way to save time, reduce errors, and give you clearer financial insight without adding to your payroll. 

With QuickBooks Live Bookkeeping, you get access to trusted, QuickBooks-certified virtual bookkeepers who help keep your books organized and up to date. It’s expert, outsourced bookkeeping support designed to grow with your business—so you can stay focused on what you do best.

If you’re looking for a dedicated bookkeeper who understands your goals, schedule a free bookkeeping consultation to see if QuickBooks Live Bookkeeping is the right fit for your business.