In-house vs outsourced bookkeeping: the cost compared

Key takeaways

In-house vs outsourced bookkeeping is closer on cost than most functions. A part-time bookkeeper for 20 hours a week costs about £18,200 a year with overheads. Outsourcing the same hours costs about £14,800–£18,500 including your review time. Outsourcing wins on cover, month-end peaks and key-person risk more than on rate.

• In-house: about £18,200 a year for a 20-hour-a-week bookkeeper.
• Outsourced: about £14,800–£18,500 for the same hours with review.
• In-house: best when bookkeeping is tied to on-site operations.
• Outsourced: best for cover, peaks and combining with credit control.

What does bookkeeping cover?

Bookkeeping is the day-to-day recording of financial transactions: sales and purchase invoices, bank reconciliations, expense claims and supplier payments. It feeds the accountant, who prepares statutory accounts and tax returns. Outsourcing bookkeeping is different from changing accountant; the two often work together.

• In-house vs outsourcing: which model is more cost-effective?

What does an in-house bookkeeper cost?

A bookkeeper working 20 hours a week at a full-time equivalent of £28,000 earns about £14,900. With employer National Insurance and pension, employment costs are about £16,700, or about £18 per worked hour over roughly 928 hours. Add a software seat and equipment, about £1,500, for a total near £18,200.

Check salaries for your area; ONS earnings data by occupation is a useful reference.

• The true cost of an employee in the UK

What does outsourced bookkeeping cost?

Skilled offshore back-office work sits at the upper end of the indicative £9–£18 range, around £14–£18 per hour. The same 928 hours cost about £13,000–£16,700 a year. Add an hour a week of your own review, about £1,840 a year, for a total of about £14,800–£18,500.

• BPO cost per hour in the UK

Why is the saving smaller for bookkeeping?

Because a part-time bookkeeper is often fully used and paid near the outsourced rate per hour, and the work needs skill. Small employers can also claim the Employment Allowance, which reduces the employer National Insurance bill. The cost case for outsourcing rests on the things the in-house figure does not show.

• When is in-house cheaper than outsourcing?

When does outsourcing bookkeeping still win?

When the bookkeeper is the only person who knows the finances, when month-end or year-end creates backlogs, when holidays leave invoices unprocessed, or when bookkeeping can be combined with credit control and supplier admin in one managed service. Removing key-person risk is often worth more than the rate difference.

• Outsourced invoicing and credit control
• Key person dependency: when one person holds it all

When should bookkeeping stay in-house?

When it is tangled with on-site operations such as cash handling, stock counts or paper-based approvals, or when your bookkeeper also does other valuable work in the business. A hybrid, with routine entry outsourced and approvals in-house, often suits.

• The hybrid model: part in-house, part outsourced

What controls do you need?

Keep payment approval in-house, give the outsourced team read or draft access rather than the ability to release payments, and require two-person checks on any change to supplier bank details. These controls protect against error and fraud whoever does the bookkeeping.

• Data security with an outsourced team

What does a good bookkeeping handover include?

A good handover lets the outsourced team work without asking the same questions every month. Prepare it before the start date and keep it updated.

• Chart of accounts and coding rules with examples.
• Bank feeds and supplier list, with approval limits.
• Month-end checklist and deadlines.
• Who approves what, and how to reach them.

• Document your processes before you outsource

What does this look like in practice?

A pattern we see in UK trades firms: the owner's partner keeps the books in evenings, and invoices go out late. Moving invoicing, reconciliations and chasing to a managed team gets invoices out on time and shortens the wait for payment, while the accountant still prepares the year-end accounts.

• See client work
• BPO Solutions for UK businesses

Bookkeeping checklist

Use these steps to compare.

• Count monthly transactions and hours spent.
• Cost the in-house role with overheads.
• Price outsourced hours at a skilled rate.
• Add your review time.
• Weigh cover, peaks and key-person risk.
• Keep payment approvals in-house either way.

Next step

Tell us your monthly transactions and who does the books today. We will compare in-house and outsourced bookkeeping honestly in a 30-minute call.