In-House vs. Outsourced Accounting: How to Decide

	Hiring in-house	Outsourcing to an accounting firm
What you pay	Salary, plus payroll taxes and benefits	One monthly fee
Who does the work	One person	A team
Accounting software	You buy it and maintain it	Usually included
Business tax return	A separate CPA or tax preparer fee on top	Usually included
When they’re out sick	Work waits	Someone on the team covers it
When they quit	You recruit and train again	Nothing changes for you
Best fit	Work that needs someone on site, or a role you want to shape yourself	Most small businesses that want the books and the taxes handled together

Business	Monthly fee	Year-end tax	One-time setup	First-year total
Professional services firm, 3-5 employees	$575	$1,200	$1,800	About $9,900
Single-location restaurant, 12-18 employees	$1,104	$1,450	$2,000	About $16,700
Construction or trades, 10-20 employees	$1,354	$1,650	$2,200	About $20,100
Home care agency, 30-50 employees	$2,295	$2,200	$2,200	About $31,900
Multi-location restaurant group, 40-60 employees	$3,329	$3,400	$4,000	About $47,400

Hiring a bookkeeper costs about $50,670 a year in salary alone before payroll taxes, benefits, and software, and you still need a CPA for the tax return. Outsourcing bundles all of that into one monthly fee, and our clients typically pay between $750 and $3,329 a month depending on how complex their business is. In-house makes sense when you need someone on site, or you want the role shaped around other duties. For most small businesses, the math favors outsourcing, and the gap widens as complexity grows.


You’ve decided the books need real help, and you’re big enough that hiring is actually on the table. That part is settled.
What’s not settled is whether you hire somebody in-house or hand it to an accounting firm. One means a person at a desk in your office who knows your business because they sit in it. The other means a team you see on a regular schedule. Both are real options, and the right answer for your business depends on things most comparisons never get specific about.
Here’s what each costs, including real numbers from our own clients, what drives the price up or down, and how to tell which side of the line your business sits on.
In-House vs. Outsourced Accounting at a Glance
Here’s the quick view before we get into the numbers.


Hiring in-house
Outsourcing to an accounting firm
What you pay
Salary, plus payroll taxes and benefits
One monthly fee
Who does the work
One person
A team
Accounting software
You buy it and maintain it
Usually included
Business tax return
A separate CPA or tax preparer fee on top
Usually included
When they’re out sick
Work waits
Someone else covers it
When they quit
You recruit and train again
Nothing changes for you
Availability
Down the hall, same day
On a set, regular schedule
Other duties
Can cover phones, filing, admin
Can include advisory, tax planning, payroll, benefits
Best fit
Work that needs someone on site, or a role you want to shape yourself
Most small businesses that want the books and the taxes handled together



What It Costs to Hire a Bookkeeper In-House
Start with salary. The U.S. Bureau of Labor Statistics puts the median wage for bookkeeping and accounting clerks at about $50,670 a year as of May 2025, with the bottom 10% under $36,000 and the top 10% over $74,550. Around Memphis, we generally see full-time bookkeepers land between $45,000 and $70,000.
Salary is the number people budget for, but it’s not the whole number. On top of it, you’re also paying:
Your share of Social Security, Medicare, and unemployment
Health insurance, retirement contributions, and paid time off
Accounting software, and whatever add-ons your business needs
Recruiting, onboarding, and training time
A CPA or tax preparer for the business tax return, since a bookkeeper doesn’t prepare it
That last one gets overlooked a lot. A bookkeeper keeps your records accurate. They don’t file your return, so the in-house path is really a salary plus someone else to handle the return.
What It Costs to Outsource Your Accounting
Here’s what some of our clients actually pay. These are real examples across different industries and sizes.
Business
Monthly fee
Year-end tax
One-time setup
First-year total
Professional services firm, 3-5 employees
$575
$1,200
$1,800
About $9,900
Single-location restaurant, 12-18 employees
$1,104
$1,450
$2,000
About $16,700
Construction or trades, 10-20 employees
$1,354
$1,650
$2,200
About $20,100
Home care agency, 30-50 employees
$2,295
$2,200
$2,200
About $31,900
Multi-location restaurant group, 40-60 employees
$3,329
$3,400
$4,000
About $47,400



The first-year total is 12 monthly payments plus the year-end tax fee plus setup. Setup is one-time only, so every year after the first is lower.
Those fees cover bookkeeping, payroll, financial reports, and the business tax return. You can run an estimate for your own business using the calculator on our pricing page.
Compare any of those first-year totals to a $50,670 salary before benefits. For most businesses, it isn’t close.
What Drives the Price of Outsourced Accounting Services
Two businesses with the same revenue can pay very different fees. It comes down to how complicated the work is, and a few things drive that:
Entities and locations. Each one is its own set of books. Add a commissary supplying several storefronts, and now those businesses are buying from each other, which is its own mess.
Shared costs. One corporate card covering three locations has to be split before any of those P&Ls mean anything.
Payroll. Headcount matters, but so does what kind. Tipped employees bring tip reporting and the FICA tip credit. Caregivers on varied pay rates bring their own rules.
Industry compliance. Job costing for a trades business. Medicare billing for home care. Inventory down to the recipe for a restaurant tracking food cost.
Volume. More transactions mean more to reconcile every month.
Look at the two restaurant examples in the chart above. Same industry, but roughly triple the fee. That’s not about revenue. One of them has four sets of books, shared costs to split, and three times the staff on tipped payroll.
This is also where hiring someone in-house stops solving the problem. A $50,000 bookkeeper is hired to keep records accurate. They’re generally not hired to manage four sets of books, handle the FICA tip credit, or keep up with Medicare billing rules. At that point you’re not comparing one salary to one fee anymore. You’re comparing a salary plus a CPA plus whatever nobody catches.
When Hiring a Bookkeeper In-House Makes Sense
Plenty of businesses hire in-house, and there are good reasons to do so:
You need same-day access. You want someone on site who can answer questions immediately or handle paperwork that has to happen in the building.
Your needs are unusual. Detailed job costing, piece-rate payroll, or an inventory process built around how you specifically work.
The role covers more than accounting. You’d rather have one person covering phones, filing, scheduling, and the books than pay separately for each.
You want the information in-house. Sensitive payroll, owner compensation, or anything you’d rather keep inside the building.
They get to know your business. An employee who’s been with you three years knows your customers, your seasonality, and why that one account always looks strange in March. A firm learns that too, but more slowly.
If several of those describe you, hiring in-house is probably the right call. The extra cost is what you’re paying for that access.
When Outsourcing Your Books Makes Sense
Outsourcing your books tends to fit when:
You want the same people handling bookkeeping and your tax return, instead of being the middleman between a bookkeeper and a CPA.
You don’t have enough work to justify a full-time salary, but too much for nights and weekends.
You’re growing, and you’d rather add capacity than post a job.
You want financial reports somebody will actually explain to you.
The thing owners notice first is what happens when somebody’s out. With one bookkeeper, the work waits. With a firm, somebody else picks it up and keeps it moving.
What You Give Up by Outsourcing Your Bookkeeping
Outsourcing your bookkeeping also has downsides. Here are three worth knowing before you sign anything:
You’re on a schedule. Your financials come at the same point every month, not whenever you ask. If you need a number at 4:00 p.m. on a Tuesday, you may be waiting until the next close. Here’s what that timeline actually looks like when you work with us, so you can decide whether it works for how you run things.
You work inside a standard setup. Most firms, including ours, use a standard chart of accounts and a defined process. That’s what makes the work consistent and keeps the price where it is. It also means we organize the books our way rather than build them around how you personally think about your business.
You can’t pick and choose the tasks. Services come bundled. You generally can’t hire a firm to handle only the parts you dislike and keep the rest, which is something an employee can do easily. Our own packages work this way, and it’s worth knowing before you compare quotes.
Nothing in this list is a dealbreaker for most businesses. They’re real tradeoffs, though, and better to know going in.
How to Decide Between an In-House Bookkeeper and Outsourced Accounting
Work through these four steps, in this order:
Price both options fully. Add salary, payroll taxes, benefits, software, and a CPA fee for the return. Compare that against an outsourced quote for your size and industry.
Look at your complexity. Job costing, inventory, more than one business entity, industry-specific rules. The more of these you have, the less a general bookkeeper can cover.
Decide how much of this needs to happen on site. If somebody has to be in the building, that narrows it quickly.
Look at your next two years. If you expect to add locations, entities, or headcount, factor in what each option costs to scale.
And this isn’t permanent. Plenty of businesses outsource for years and later hire someone in-house once there’s enough work to justify it. Others go the other direction after realizing they’ve outgrown the person they have.
In-House or Outsourced: Which One Fits Your Business?
If you came in expecting one option to win outright, that isn’t the case. Most small businesses choose outsourcing because the numbers say so, and a smaller group needs someone on site badly enough to justify the cost.
What’s worth avoiding is choosing without pricing both. The salary is the part you see. The payroll taxes, the benefits, the software, the coverage gap, and the separate CPA bill are the parts that show up later.
Not at the point where hiring is realistic? Then the earlier question is whether to hand the books off at all.
At Patrick Accounting, we handle bookkeeping, payroll, and taxes together for small business owners from our Memphis office. The table above shows what other businesses pay. If you want to see what outsourcing would cost for your own business, our pricing calculator will get you a number in about two minutes.
Frequently Asked Questions About In-House vs. Outsourced Accounting
Is it cheaper to outsource accounting or hire in-house?
For most small businesses, outsourcing costs less. A bookkeeper runs about $50,670 a year in salary alone, plus payroll taxes, benefits, and software, and you still need a CPA for the business tax return. Our clients typically pay between $750 and $3,329 a month for bookkeeping, payroll, and taxes together.
Can a bookkeeper do my business tax return?
Generally, no. A bookkeeper keeps your records accurate and up to date, which makes a good return possible. Preparing and filing it is separate work that usually goes to a tax preparer like a CPA or an Enrolled Agent.
At what point should I hire a bookkeeper in-house?
Usually when you have enough accounting work to fill a role, need someone on site, or want the position to cover other duties too. Complexity alone isn’t the trigger, since complex work often needs more specialization than a single hire provides.
What happens if the person handling my books leaves the firm?
If you outsource your books to a firm, the work continues. If your in-house bookkeeper leaves, their departure is your problem to solve.
Can I do both, with someone in-house and an outside firm?
Some businesses do, with an in-house person handling day-to-day data entry and bill payment while a firm handles the monthly close, reporting, and taxes. Whether that splits cleanly depends on the firm and how the work divides.