In-House vs Outsourced Bookkeeping
Should you hire a bookkeeper or outsource? Here's an honest comparison for trade contractors.
In-House Bookkeeper
A dedicated employee who handles your books full-time or part-time.
Advantages
- Immediate availability for questions
- Deep knowledge of your specific business
- Can handle non-bookkeeping admin tasks
- Full control over schedule and priorities
- On-site presence for physical documents
Disadvantages
- Salary + benefits + taxes = $50-75K+ annually
- Training and supervision required
- Vacation, sick days, turnover risk
- May not have trade-specific expertise
- Limited by one person's knowledge
Outsourced Bookkeeping
A bookkeeping firm or service that handles your books remotely.
Advantages
- Lower cost: typically $750-2,000/month
- No benefits, taxes, or HR overhead
- Team coverage - no sick days or vacations
- Access to multiple specialists
- Often includes software and tools
Disadvantages
- Not immediately available for walk-in questions
- Learning curve to understand your business
- Depends on reliable digital systems
- Less flexibility for same-day requests
- May feel less "yours"
The Real Math for Trade Contractors
Let's break down the actual costs:
In-House Bookkeeper (Full-Time)
- Base salary: $45,000-55,000
- Payroll taxes (7.65%): $3,400-4,200
- Health insurance: $6,000-12,000
- Software/equipment: $1,500-3,000
- Training/supervision time: $2,000-5,000
- Total: $58,000-79,000/year
Outsourced Bookkeeping
- Monthly service: $750-2,000
- Annual cost: $9,000-24,000
- Typically includes software
- No benefits, taxes, or overhead
- Total: $9,000-24,000/year
Annual savings with outsourced: $34,000-70,000
That's not to say outsourced is always better—but the cost difference is significant enough that you should only hire in-house when the benefits justify it.
When In-House Makes Sense
- High transaction volume: If you're processing 50+ invoices daily, on-site may be more efficient.
- Multiple roles: If you need someone who also handles AP, AR, HR admin, and reception.
- Complex operations: Multiple entities, divisions, or locations requiring daily attention.
- Physical documents: If your operations still run on paper, having someone on-site helps.
- Rapid growth: If you're scaling fast (50%+ revenue growth), dedicated attention may be worth it.
When Outsourced Makes Sense
- Under $3M revenue: The math rarely works for full-time at this level.
- You want clean books without managing someone: Hiring is work. Managing is work.
- You need trade expertise: Specialized firms understand job costing, retention, WIP.
- Consistency matters: No vacation coverage issues, sick days, or turnover.
- You're already cloud-based: If you're on QuickBooks Online, outsourcing is seamless.
Frequently Asked Questions
How much does outsourced bookkeeping cost compared to in-house?
Outsourced bookkeeping typically costs $750-2,500/month for most trade businesses, while an in-house bookkeeper costs $50,000-75,000+ annually when you include salary, benefits, payroll taxes, and overhead.
When should I hire an in-house bookkeeper?
In-house bookkeeping makes sense when you're over $3M in revenue, have complex daily transactions, need someone for non-bookkeeping admin tasks, or have multiple divisions requiring daily attention.
Can outsourced bookkeeping handle job costing for contractors?
Yes, specialized outsourced bookkeeping firms (like ours) set up chart of accounts specifically for job costing, work with trade-specific software, and understand contractor accounting needs including WIP, retention, and change orders.
What if I need someone available immediately when I have questions?
Most outsourced services respond within hours, not instantly. If you need someone to answer walk-up questions multiple times per day, in-house may be better. If you can batch your questions into a weekly call or email, outsourced works fine.
Not Sure Which Is Right for You?
Let's talk about your specific situation. We'll give you an honest recommendation—even if that means pointing you toward hiring in-house.