When you’re ready to have someone else handle your accounts for you, it can be difficult to decide whether to hire an employee or outsource them to a bookkeeper. In this article, I discuss the pros and cons of both options. Then you can decide for yourself which is the right choice for you.

Hire an employee

Pros:

• On-site – Chances are if you’re hiring an employee, you will have a shared office for them to work in so you can easily go and see them if you need to. Or if they are a remote employee, you will most likely have set up systems so that you can easily chat with them and get in touch.
• Immersed – Your employee will be solely focused on your accounts and no others. This can give them a very deep understanding of your business.
• Changes – If you decide to change processes or systems, you can work with your employee to bring in new ones.
• Flexibility – If you need your employee to quickly jump on to another task, they should be able to accommodate that.
• Loyalty – Typically an employed staff member is very loyal to the company. If you treat them right they won’t look for work elsewhere.

Cons:

• Price – Hiring an employee will, 9 times out of 10, be more expensive than outsourcing. According to Reed, the average salary for a bookkeeper in the UK is £28,140 per year. This works out to be £2,345 per month. If you want someone more experienced then that price is going to shoot up.
• Payroll – On top of the higher price you will also need to worry about running payroll. You will have to understand PAYE, NIC, pensions, holidays etc. This is an additional burden to your company.
• Equipment – You will need to provide your employee with the equipment they need to do their job. Depending on where you require them to work, this could include a new desk, chair, computer, webcam, headphones…
• Absences – If your employee goes on holiday or is sick, you no longer have someone doing your bookkeeping for you. Will you have to take on the additional work yourself or hire a temporary replacement to cover?
• Training – Your employee needs to stay up to date with all the laws and regulations surrounding bookkeeping. This means you will need to allow them time off to go to courses and potentially pay for them.

Outsource to a bookkeeper

Pros:

• Price – If you outsource to a bookkeeper will most likely be significantly cheaper than hiring an employee. It’s also a lot simpler to pay them as they will invoice you for their completed work. This eliminates your need to worry about running payroll.
• Flexibility – Some bookkeepers work outside of regular office hours so work doesn’t stop when your office closes.
• Training – Bookkeepers have to manage their own training. If they are members of a professional body then they will have certain CPD (continuing professional development) requirements to meet. This is something that you don’t have to worry about. Also, you can be confident that your bookkeeper is constantly refreshing and updating the skills required to do their job.
• Contacts – Bookkeepers that have their own businesses tend to have lots of contacts in the financial world. If you’re looking at starting a new project and need some financial information this can be extremely useful. If your bookkeeper can’t answer it themselves, they will probably know someone else who can.
• Workload changes – If your requirements increase it will be down to your bookkeeper to sort out handling the increase in workload. This could be subcontracting out sections. Yes, they may have to increase their prices but you won’t have to worry about hiring another employee and all the stress and expense that entails.

Cons:

• Priorities – Your bookkeeper doesn’t just do your accounts; they will have other clients they complete work for. They won’t always be focused on your accounts every day. This can be an issue if you need something completed at short notice.
• Availability – A lot of bookkeepers work from home around their personal lives so they may not be available for your typical 9-5. If this is a vital factor for your business then you will need to find a bookkeeper that does work during those hours or consider hiring an employee instead.
• Ease of communication – If you need to speak with your bookkeeper, you may well have to schedule a time to have a meeting and it will probably be over a video call. This can be a hassle to organise and set up.
• Control – If you are someone that needs to have complete control over all aspects of your business, it can be difficult to outsource a section as it can feel like you’re losing part of that control. You won’t be able to dictate exactly when and how the bookkeeping is completed.
• Systems – The bookkeeper that you choose will have their own way of doing bookkeeping. You will have to fit in with that. This can mean changing your existing way of working and might be difficult to implement.

As you can see, there are pros and cons to both options and you will need to consider which one is the best choice for you. If you’d like to get in touch and discuss outsourcing your bookkeeping to me you can contact me here.