What's cheaper — hiring an in-house bookkeeper or outsourcing?

For most small businesses, outsourcing is significantly cheaper. The gap is wider than people expect once you account for the full cost of an employee versus a monthly service fee.

A full-time bookkeeper in the Tampa Bay area earns roughly $40,000 to $55,000 per year in salary. On top of that, you pay the employer portion of FICA taxes, which adds another 7.65%. If you offer health insurance, PTO, or any other benefits, you can add $5,000 to $15,000 or more. Then there’s the cost of software licenses, a computer, workspace, and the time you spend managing and training that person. The real total often lands between $50,000 and $75,000 per year.

Outsourced full-service bookkeeping for a small business typically runs $200 to $800 per month depending on your transaction volume and complexity. That puts annual costs between $2,400 and $9,600. Even on the high end, you’re paying a fraction of what an in-house hire would cost.

There are hidden costs with in-house staff that don’t show up on a budget sheet. If your bookkeeper quits, you’re stuck scrambling to find a replacement while the books fall behind. You spend time reviewing their work, answering HR questions, and handling the general overhead of having another employee. And most small businesses don’t actually generate enough bookkeeping work to fill 40 hours a week, so you end up paying for idle time or assigning tasks the person wasn’t hired to do.

An outsourced firm already has the training, the software expertise, and the processes in place. You’re not paying for someone to learn QuickBooks or figure out how to handle your sales tax filings. You get a team rather than a single person, which means coverage doesn’t disappear when someone takes a vacation or calls in sick.

The one scenario where in-house starts to make sense is when your business reaches a size where the volume of daily transactions, invoicing, bill payments, and financial reporting genuinely requires a dedicated person working full days. That’s usually businesses doing several million in revenue with complex operations. Even then, many growing companies pair a part-time in-house person with an outsourced firm to get the best of both.

For a small business doing under $2 million in revenue, outsourcing small business bookkeeping is almost always the smarter financial move. You get professional-level work at a fraction of the cost, and you free yourself up to focus on running the business instead of managing another employee.