Guide to outsourcing your bookkeeping

How much does your bookkeeping cost you?

This may sound like a question about how much you pay your bookkeeper or how much you spend on accounting software like QuickBooks.

You may do your own bookkeeping and think, “It doesn’t cost me anything but time.” But, understanding the actual costs and benefits of proper bookkeeping can help you make smarter decisions — starting with whether or not you should outsource your bookkeeping.

Signs it’s time to outsource

In the early days of a startup, it’s normal for the founding team to wear multiple hats, working on product, sales, marketing, and, of course, finances. But at a certain point, managing your own bookkeeping can become overwhelming. Here are some signs that it’s time to consider outsourcing:

• You’re spending too much time on bookkeeping instead of growing your business. If you’re stuck reconciling transactions when you should be focused on product strategy or customer acquisition, outsourcing can free up your bandwidth.
• Your financials are getting too complex. More transactions, multiple revenue streams, international transactions, or investor reporting requirements can make DIY bookkeeping unsustainable.
• You’re unsure about compliance and tax requirements. A professional bookkeeper can ensure you stay compliant, avoiding costly mistakes.
• You’re planning to raise capital. Investors will expect clean, accurate financials. An outsourced bookkeeper can help maintain a structured record.

The nature and complexity of your business will dictate when you hit these milestones, with some able to DIY their books for much longer than others without having a negative impact. Next, let’s take a closer look at the pros and cons of outsourcing your bookkeeping.

Benefits and drawbacks outsourced bookkeeping

Benefits

• Saves time and energy. Delegating bookkeeping allows you to focus on high-value activities. While handling your own books may save you a few dollars in bookkeeping fees, spending that time on tasks only you can do could have a much bigger impact on the company’s progress and profitability.
• Ensures accuracy and compliance. While bookkeeping may seem like a simple data entry or administrative task, accuracy is crucial. Even a small error can have a big impact on your financial decision-making or taxes if not caught early. A professional bookkeeper is better equipped to keep your books accurate and timely, supporting your compliance with tax and other financial rules.
• Scales with your business. As your startup grows, an outsourced solution can adjust to your needs.
• Access to financial expertise. A good bookkeeper can provide insights and recommendations, not just data entry.
• Cost-effective. Hiring a full-time, in-house bookkeeper can be expensive, while outsourcing allows you to pay only for the services you need.

Drawbacks

• Less control. When working with an outside provider, you have less say on how they approach the work.
• Security concerns. Financial data is sensitive, so it’s important to choose a trustworthy provider.
• Communication lags. Depending on your provider’s availability, responses may not be immediate.
• Reduced visibility. Compared to doing your own books, working with someone can lead to less visibility and familiarity with your numbers.

(A note on this last point: One advantage of doing your own bookkeeping is that you see every transaction that comes in, which is also clearly a disadvantage once you have a significant number of transactions. To maintain visibility and stay in touch with your finance, make sure you set aside time to review reports generated by your bookkeeper every month — more or less frequently if appropriate.)

What bookkeeping tasks can I outsource?

Outsourced bookkeeping isn’t all or nothing — you can delegate specific tasks while keeping others in-house. Common bookkeeping tasks to outsource include:

• Transaction categorization and expense tracking
• Bank and credit card reconciliations
• Payroll processing
• Accounts payable and receivable management
• Financial reporting and tax preparation support
• Budgeting and cash flow forecasting

As you can see from this list, bookkeeping tasks range from basic data entry to more strategic work. Taxes and financial reporting can go beyond the scope of bookkeeping and into accounting, but many bookkeeping providers, like Cleer Tax, have the experience and skill to offer these services (and many accounting firms offer bookkeeping, so your outsourced bookkeeper could very well cover the entire spectrum.) Payroll is another service that’s often outsourced to specialized companies, but is also commonly offered in bookkeeping packages.

One common option for outsourcing is to hire a bookkeeper to manage time-intensive tasks like expense categorization, account reconciliations, AP, and AR, while keeping more strategic items either in-house or handled periodically by your accountant.

You may prefer to handle things like forecasting, proactive tax planning and preparation, and financial reporting yourself, with the guidance of a CPA, but having your transactions up-to-date and your accounts reconciled by your bookkeeper will make these tasks much easier, because your financial data will be clean and current. Most accounting software for startups is cloud-based, so your bookkeeper and accountant can easily access the same files for their respective projects.

Choosing the right bookkeeping firm

Not all bookkeeping providers are the same. When evaluating options, consider:

• Industry experience. Some bookkeepers specialize in startups, e-commerce, or professional services, which can be valuable. A good example of this is The SaaS Bookkeeper.
• Tech stack compatibility. Ensure they work with your existing accounting software (e.g., QuickBooks, Xero, etc.).
• Work frequency. Make sure accounts will be reconciled monthly and transactions will be categorized regularly, not just at the end of the month, so you have access to accurate, real-time data in your system.
• Service flexibility. Can they scale with your business and adjust to your needs? For example, an individual likely won’t be able to scale with you as easily as a larger firm.
• Pricing transparency. Understand their pricing model — flat fee, hourly, or per-transaction.
• Security measures. Check their data protection policies and compliance standards.
• Client reviews and testimonials. Look for feedback from businesses similar to yours.

Outsourced bookkeeping mistakes to avoid

To make the most of outsourcing, keep these best practices in mind:

• Define clear expectations. Outline which tasks the bookkeeper will handle and establish communication cadences.
• Choose a provider that understands startups. They should be familiar with fast-growth business models and investor reporting requirements.
• Ensure software compatibility. Your bookkeeper should be comfortable using the accounting software you’ve chosen so there are no unnecessary changes for your team, accountant, or existing integrations.
• Set up internal controls. Maintain oversight by reviewing reports regularly and setting up approval processes for transactions.
• Don’t assume all bookkeepers provide financial strategy. Some bookkeepers focus solely on data entry, while others offer CFO-like insights. Clarify their role up front.

How much does a bookkeeper cost per month?

This is a commonly asked question with a very broad answer. Bookkeeping costs vary depending on your business size, complexity, and the level of service required. Here’s a rough breakdown:

Freelance bookkeeper: $200–$500/month for basic services

Bookkeeping firms: $500–$2,500/month depending on volume and services included

Virtual CFO services: $2,500+/month for more strategic financial guidance

For startups with simple financials, an outsourced bookkeeper at the lower end of this range can be a cost-effective solution. As you scale, more comprehensive bookkeeping and advisory services may be worth the investment.

Conclusion

Outsourcing bookkeeping can be a great investment for founders looking to save time, ensure accuracy, and scale effectively. By identifying the right provider and setting up clear processes, you can turn bookkeeping from a headache into a strategic asset for your startup.

Looking for the right tools to streamline your financial workflows? Explore Mercury’s automations with top accounting software and bookkeeping partners.