You’re spending nights and weekends buried in spreadsheets and chasing receipts, time you should be growing your business.
This guide shows you how to outsource accounting to save money while getting better financial reports than you’ve ever had.
According to a 2024 QuickBooks survey, small business owners with low financial literacy have lost an average of $118,121 in profits, money that proper accounting support could have saved. With the median bookkeeper salary now at $49,210 per year (BLS, May 2024), outsourcing often costs less than the mistakes you’re already making.
We’ll cover the real costs, which tasks to outsource first, and a simple 4-week transition plan.
Key Takeaways
- How outsourcing can cut your accounting costs by 30-50% compared to hiring in-house ($59K-$79K vs. $6K-$42K annually).
- Which accounting tasks deliver the fastest ROI when outsourced first, and the exact priority order to follow
- The 8-point checklist for evaluating outsourced accounting partners (plus red flags to avoid)
- Why e-commerce businesses benefit even more from outsourcing due to multi-channel complexity
- The step-by-step 4-week transition process to switch without disrupting your operations
What Does It Mean to Outsource Accounting to Save Money?
Outsourcing accounting means paying an external team to handle your bookkeeping, payroll, tax prep, and financial reporting. Instead of hiring employees, you pay a monthly fee for professional service, without benefits, turnover costs, or training expenses. Most businesses start by outsourcing bookkeeping, then expand.
Picture this: instead of balancing QuickBooks while making sales calls and answering customer emails, you give your receipts, bank feeds, and invoices to a dedicated team. They sort your transactions, reconcile your accounts, close your books each month, and give you useful reports. That’s what outsourced accounting means.
Here’s what it typically includes:
- Bookkeeping: Daily transaction recording, categorization, and reconciliation
- Payroll processing: Calculating wages, withholding taxes, issuing payments
- Tax preparation: Quarterly estimates, year-end filings, compliance
- Monthly close: Producing accurate financial statements on time
- CFO advisory: Strategic guidance on cash flow, budgeting, and growth (for higher-tier services)
You can outsource everything or just specific functions. Many small business owners start with bookkeeping, the most time-consuming task, then add payroll or tax prep as they see results.
Hiring an outside bookkeeper avoids costs like benefits, vacation, sick days, and training. You pay for results. If your bookkeeper quits, you won’t have to run for a replacement; your outsourced team has backup ready.
According to Investopedia’s definition of outsourcing, companies outsource to reduce costs and gain access to specialized expertise unavailable internally.
How Much Can Small Businesses Save by Outsourcing Accounting?
Small businesses typically save 30-50% by outsourcing accounting. An in-house bookkeeper costs $59,000-$79,000 annually (including benefits and overhead), while outsourced services range from $6,000-$42,000 per year, depending on service level. The savings add up fast, especially when you factor in turnover costs.
Let’s break down the real numbers.
Cost of In-House Accounting:
Hiring a bookkeeper isn’t just about salary. Here’s what you’re really paying:
| Cost Category | Annual Estimate |
|---|---|
| Base salary | $45,000 – $55,000 |
| Benefits (health, retirement) | $9,000 – $13,750 (20–25%) |
| Payroll taxes (employer portion) | $3,400 – $4,200 |
| Software licenses | $500 – $2,000 |
| Training and development | $500 – $1,500 |
| Equipment and workspace | $1,000 – $3,000 |
| Total Annual Cost | $59,400 – $79,450 |
And here’s the kicker: when that bookkeeper quits (and the average tenure is just 4.2 years, per BLS data), you’ll spend $15,000-$25,000 on recruiting, onboarding, and lost productivity.
The Cost of Outsourced Accounting:
| Service Level | Monthly Cost | Annual Cost |
|---|---|---|
| Basic bookkeeping | $500 – $1,000 | $6,000 – $12,000 |
| Full-service accounting | $1,000 – $2,000 | $12,000 – $24,000 |
| Accounting + CFO advisory | $2,000 – $3,500 | $24,000 – $42,000 |
Even at the high end, you’re saving 40-50% compared to in-house, and you get a team, not a single person who could leave tomorrow.
ROI Calculation Example:
Current in-house cost: $65,000/year
Outsourcing cost: $1,500/month ($18,000/year)
Annual savings: $47,000
That’s money you can reinvest in inventory, marketing, or hiring revenue-generating roles.
Which Accounting Tasks Should You Outsource First?
Start with bookkeeping and bank reconciliation; they’re the most time-consuming and error-prone tasks. Then add payroll processing, accounts payable/receivable, and monthly close. Save CFO advisory for when you need strategic guidance on growth or funding.
Here’s the priority order based on time savings and ROI:
Tier 1: Outsource First (Highest ROI)
1. Bookkeeping and transaction categorization
- Time drain: 5-15 hours/week for most business owners
- Error risk: High (miscategorization affects reports and taxes)
- Why outsource: Frees up the most time immediately
2. Bank and credit card reconciliation
- Time drain: 2-5 hours/week
- Error risk: Medium-high (unreconciled accounts hide problems)
- Why outsource: Catches fraud and errors faste
3. Accounts payable and receivable
- Time drain: 3-8 hours/week
- Error risk: Medium (late payments hurt vendor relationships and cash flow)
- Why outsource: Improves cash flow manageme
Tier 2: Outsource Next (Strong ROI)
4. Payroll processing
- Why outsource: Compliance is complex; mistakes trigger IRS penalties
- Bonus: Eliminates payroll tax headaches
5. Monthly close
- Why outsource: Gets you accurate financials by the 15th instead of the 30th (or later)
- Bonus: Makes tax prep easier
Tier 3: Outsource When Ready (Strategic ROI)
6. Tax preparation and planning
- Why outsource: Specialists find deductions you’ll miss
7. CFO advisory services
- Why outsource: Strategic guidance for growth, funding, or exit planning
Start with Tier 1. Once you see how much time you get back, expanding to Tier 2 and 3 becomes a no-brainer.
How Does Outsourcing Accounting Work for E-commerce Businesses?
E-commerce businesses benefit more from outsourcing because their accounting involves multi-channel sales reconciliation, inventory tracking, marketplace fees, and sales tax compliance across multiple states. Most in-house hires lack this specialized expertise.
Unique E-commerce Challenges:
- Multi-channel Revenue: Selling on platforms like Amazon, Shopify, Walmart, and Etsy involves navigating distinct payout schedules and fee structures.
- Inventory Valuation: Methods such as FIFO (First In, First Out), LIFO (Last In, First Out), and weighted average are essential for accurately calculating the cost of goods sold (COGS), which directly impacts your profit margins.
- Marketplace Fees: Amazon and other platforms charge fees of over 15%. Properly categorizing these fees is crucial for maximizing tax deductions.
- Sales Tax Nexus: If you maintain inventory in multiple states or exceed economic nexus thresholds, you are required to pay sales tax in each state.
- High Transaction Volume: With over 500 orders per month, managing more than 500 transactions for accurate categorization becomes a significant challenge.
What Ecommerce-Focused Outsourced Accounting Looks Like:
A good e-commerce accounting partner will:
- Integrate with your platforms (Shopify, Amazon Seller Central, WooCommerce)
- Reconcile payouts against orders automatically
- Track inventory and COGS accurately
- Handle multi-state sales tax compliance
- Provide reports that show profit by product, channel, and time period
This requires accounting software like A2X, Webgility, or Link My Books, plus someone who knows how to use them. Your average bookkeeper doesn’t have this expertise. An e-commerce-specialized accounting team does.
Why Outsourcing Makes Even More Sense for E-commerce:
The complexity means hiring someone in-house with the right skills costs more, often $60,000-$80,000+.
Outsourcing to a firm that specializes in e-commerce accounting costs a fraction of what it would cost to hire generalists and gives you specialists, not generalists.
According to Shopify’s guide to e-commerce accounting, accurate inventory tracking and revenue recognition are the two biggest challenges online sellers face.
What Should You Look for in an Outsourced Accounting Partner?
Evaluate outsourced accounting partners on eight criteria: transparent pricing, industry experience, technology integration, communication protocols, team structure, security compliance, scalability, and onboarding clarity.
Avoid providers with hourly billing, vague processes, or no references. The right partner should feel like an extension of your team.
The 8-Point Evaluation Checklist:
Use this checklist when evaluating potential partners:
1. Pricing Model
- Flat monthly fee with clear scope
- No Hourly billing (creates an incentive to work slowly)
- No Hidden fees for “extra” tasks
2. Industry Experience
- Do they work with businesses like yours?
- Ask for references from similar companies
- E-commerce sellers: confirm platform expertise
3. Technology Stack
- What accounting software do they use? (QuickBooks, Xero, NetSuite)
- Will you have real-time access to your books?
- Do they integrate with your existing systems
4. Communication
- Who’s your point of contact?
- What’s the response time guarantee?
- How often do you meet to review financials?
5. Team Structure
- Will you have a dedicated team, or will you be shuffled around?
- What happens if your main contact is sick or leaves?
6. Security
- Are they SOC 2 compliant?
- How do they protect your financial data?
- What access controls exist?
7. Scalability
- Can they handle your growth?
- What happens during the busy season?
8. Onboarding Process
- Is there a clear timeline?
- What documents do you need?
- How long until you’re fully transitioned?
When evaluating potential services, it’s important to watch for several red flags. Be cautious of prices that seem too good to be true, as low costs often indicate offshore services that come with communication barriers.
Ensure that there is a clear contract or service agreement in place, and be wary if the provider cannot supply references. If you receive vague answers regarding their process, it’s a sign to proceed with caution. Additionally, any pressure to sign immediately should raise concerns about the legitimacy of the offer.
The AICPA’s guide to outsourcing accounting services recommends verifying credentials, checking references, and ensuring clear contractual terms before engaging any provider.
When Is the Right Time to Outsource Your Accounting?
Outsource accounting when bookkeeping consumes 5+ hours weekly, reports run late, you’ve experienced turnover, or you’re scaling rapidly. The risks (control, communication, security) are manageable with the right partner. The greater risk is making business decisions based on outdated or inaccurate financial data.
10 Signs It's Time to Outsource:
When considering whether to hire an accountant or outsource accounting services, it’s important to focus on the main concerns:
- Rate yourself on each. If you check three or more, outsourcing should be on your radar:
- You spend 5+ hours/week on bookkeeping
- Your financial reports are delivered weeks after the month-end
- You’ve missed (or almost missed) a tax deadline
- You’ve experienced bookkeeper turnover in the past 2 years
- You make business decisions without current financial data
- One person knows everything about your books (single point of failure)
- You’re preparing for funding, a sale, or a major partnership
- Your business is growing faster than your accounting can keep up
- You’ve discovered errors that cost you money
- You dread looking at your books
What About the Risks?
When weighing hiring an accountant vs outsourcing, these are the main concerns:
- Loss of control: Mitigated by real-time dashboard access
- Communication delays: Mitigated by SLAs and dedicated contacts
- Security: Mitigated by SOC 2 compliance and encryption
- Hidden costs: Mitigated by flat-fee contracts with clear scope
Every risk has a solution. The bigger risk? Continuing to run your business on bad or late financial data.
The Opportunity Cost of Waiting:
Every hour you spend on accounting is an hour not spent on sales, marketing, product development, or customer relationships. If your time is worth $100/hour and you spend 10 hours/week on books, that’s $52,000/year in opportunity cost alone.
How Do You Transition to Outsourced Accounting Successfully?
A successful transition involves four phases: gathering documents, granting system access, completing knowledge transfer, and parallel processing.
Expect a 30-day review period before full handoff. Clear communication and organized records make the difference.
The 4-Week Transition Timeline:
Week 1: Discovery and Document Gathering
What you’ll do:
- Complete a discovery call to discuss your business, pain points, and goals
- Gather 12 months of bank and credit card statements
- Provide prior year tax returns
- Share your current chart of accounts
- List recurring vendors and customers
What your new team does:
- Review your current books and identify gaps
- Assess cleanup needs (if any)
- Create your onboarding plan
Week 2: System Access and Setup
What you’ll do:
- Grant read-only access to bank accounts (via Plaid or direct login)
- Provide accounting software credentials (QuickBooks, Xero, etc.)
- Share payroll system access (if applicable)
What your new team does:
- Connect accounts and verify data flows
- Set up a chart of accounts (or migrate existing)
- Begin historical review
Week 3: Knowledge Transfer
What you’ll do:
- Walk through any unique processes or categorization rules
- Explain recurring transactions
- Introduce key vendors/customers
What your new team does:
- Document your processes
- Complete first reconciliations
- Flag questions or anomalies
Week 4: Parallel Processing and Handoff
What happens:
- Your team processes the month
- You review and approve
- Feedback loop established
- Full handoff confirmed
After the First Month:
You’ll typically receive your first complete financial package, P&L, balance sheet, and cash flow statement by the 15th. From there, it’s maintenance mode: monthly reviews, quarterly check-ins, and annual tax prep. What tasks used to consume your weekends? Now handled by your outsourced team.
According to QuickBooks’ guide to working with bookkeepers, clear document handoff and defined communication schedules are the two biggest factors in successful outsourcing relationships.
Conclusion
The math is simple: hiring an in-house bookkeeper costs $59,000-$79,000 per year when you factor in salary, benefits, payroll taxes, and overhead. Outsourcing that same work costs $6,000-$42,000, yielding 30-50% savings with better coverage and zero turnover headaches.
But the real savings go beyond the numbers. Every hour you spend reconciling accounts is an hour not spent closing deals, serving customers, or growing your business. At $100/hour, 10 hours per week on bookkeeping costs you $52,000 annually in opportunity cost alone.
You don’t have to outsource everything all at once. Begin with bookkeeping and bank reconciliation, as these are the tasks that consume the most time. Once you see positive results, you can add payroll and tax preparation. In just four weeks, you’ll have organized financial records, accurate reports, and your weekends free again.
The businesses that thrive aren’t the ones doing everything themselves. They’re the ones who know what to delegate.
Ready to Stop Doing Your Own Books?
Schedule Your Free Accounting Consultation Today!
FAQs
Q: Is outsourcing accounting cheaper than hiring an in-house bookkeeper?
Yes. A full-time bookkeeper costs $55,000-$75,000 annually when you include benefits, payroll taxes, and overhead. Outsourced accounting services typically run $6,000-$30,000 per year, depending on complexity, for a 30-50% savings. Plus, you get team coverage instead of relying on one person.
Q: How much do outsourced accounting services cost for small businesses?
Most small businesses pay $500-$2,500 per month. Basic bookkeeping starts around $500/month. Full-service accounting with payroll and tax prep runs $1,000-$2,000/month. Add CFO advisory, and you’re looking at $2,000-$3,500/month. Pricing depends on transaction volume and service scope.
Q: Is my financial data safe with an outsourced provider?
Reputable providers use bank-level encryption, SOC 2 compliance, and strict access controls. Your data is often safer than on a local computer, which is vulnerable to theft or ransomware. Always verify security certifications before signing, ask for their SOC 2 report or equivalent.
Q: How long does it take to switch to outsourced accounting?
Basic bookkeeping transitions take 2-4 weeks. Comprehensive services with historical cleanup may take 4-8 weeks. The timeline depends on how organized your current records are and how quickly you can provide access. A good provider gives you a clear onboarding schedule upfront.
