Is it cheaper to outsource accounting?

Is it cheaper to outsource accounting?

The answer is…probably! Of course there are variables, and your business may be in a situation where it is more cost effective to bring a new employee on board to handle the accounting, but generally outsourcing accounting is more cost effective for small businesses. We recommend you reach out to an outsourced accounting firm to get a proposal so you are able to accurately assess value. Another aspect of outsourcing your accounting that makes it cheaper for you is that transferring those tasks to someone else frees up your time – which is valuable! So not only can you save money on overhead and salary, you also can look at how many hours you save at your own hourly rate. After outsourcing accounting, business owners often wonder why they didn’t outsource sooner, as they have time to transition to business critical tasks and problems that can only be solved by an owner. 

Cost Comparison: In-House Accounting vs Outsourced Accounting Services

When comparing the cost of in-house accounting to outsourced accounting services, the difference goes far beyond hourly rates. Hiring an internal accountant means committing to a fixed salary, payroll taxes, benefits, onboarding, training, and long-term overhead, regardless of how much accounting work your business actually needs. For many small and mid-sized businesses, these fixed costs quickly add up and can be difficult to scale efficiently.

With outsourced accounting services for small business, costs are typically structured as predictable monthly fees based on usage, complexity, and service level. This pricing model allows companies to pay only for the services they need, whether that’s bookkeeping, financial reporting, tax preparation, or strategic guidance from a dedicated outsourced accountant. In most cases, outsourced accounting pricing ends up being more cost-effective because it eliminates employment-related expenses while still providing access to experienced professionals and up-to-date accounting systems.

Another key factor in this accounting outsource services cost comparison is flexibility. As your business grows or experiences seasonal fluctuations, outsourced services can scale up or down without the financial risk of hiring or laying off staff. This makes outsourcing particularly attractive for startups and growing companies that need reliable financial support without locking themselves into long-term fixed costs.

How much should I pay an accountant for my small business?

Most accountants charge by the hour, with rates varying widely based on experience, location, and scope of work. For many companies, this raises the question: should I outsource my accounting instead of hiring in-house? With managed accounting services and outsourced accounting services for small business, businesses can access an experienced outsourced accountant without the overhead of a full-time hire. While traditional in-house roles require competitive salaries and benefits, outsourced accounting pricing through accounting outsource services is typically more predictable and scalable, making it an attractive option for growing businesses.

Overall, the average cost of accounting services for small business is between $35,000 to $55,000 for a bookkeeper’s salary or between $250-2,500 per month for outsourcing your accounting. 

Can you outsource accounting?

Absolutely! Many small businesses reach a point in their growth where the day-to-day financial tasks are overwhelming, but they can’t quite stretch to bring another employee in—or do not want to train an internal accounting hire. Outsourcing accounting services for a small business is a great solution to take the burden of those tasks off of business owners or senior employees. These days, because a lot of financial transactions take place online, it’s very easy to set up software and give access to an outsourced accountant so they can integrate smoothly and easily without ever having to set foot in your business (and you won’t have to spend tons of time figuring out what information you need to provide them). Outsourcing accounting is typically painless, especially with an outsourcing solution that is experienced and provides comprehensive coverage. 

Should a small business outsource accounting?

While it’s clear that you can, the question remains: should you outsource accounting? What are the pros and cons? Some small business owners get nervous about the loss of control, since they may not be touching all the financial transactions every day as they have previously. However, with proper communication and clearly defined roles and procedures, outsourcing your accounting can actually give you better control over your finances because these experts can help you understand and give you a clearer picture of your overall financial health.

Additionally, business owners may worry that you can’t walk down the hall and talk to your accounting team or that there may be hidden costs when outsourcing. These disadvantages can be present if the outsourced solution you choose is the wrong fit, but won’t be an issue if the outsourcing firm is communicative and transparent. Hiring an external accountant comes with the benefit of having extra eyes on your finances to help catch silly mistakes (and prevent fraud!) and having expertise and resources that you may not otherwise be able to afford or access. Overall, the advantages of outsourcing your accounting often vastly outweigh the negatives, and with an experienced and dedicated accounting firm, you will find that your back office doesn’t have to be a burden or a worry any longer. 

Where do you start when looking for outsourced accounting?

If you are looking for a flexible, affordable, and customizable outsourced accounting solution, look no further than Milestone. Our team of CPAs and industry experts is here to be your team and to help you streamline financial operations and maximize efficiency. From bookkeeping and accounting to outsourced CFO, Milestone has the solution that works for your unique needs. Don’t take our word for it though! Bryan Neale, the founder and CEO of Blind Zebra, says that “The Milestone team is fantastic. They keep my financials in good shape and provide the information I need to make smart decisions.” 

We are proud to be part of entrepreneurs’ success and to help enable them to reach their dreams. Discover the difference today and see what you can achieve with Milestone.