In-house or Outsource?

Hiring an in-house bookkeeper often appears to be the sensible option. However, when considering cost and capability, many businesses would be more efficient to outsource.

For example, the annual cost of an in-house bookkeeper could be as much as £41,674, including salary (£35,000), employer NIC's (£4,500), pension (£863), software licence (£312) and recruitment and onboarding (£1,000).

Hidden costs include additional workspace, equipment and training and CPD.

In contrast, an outsourced accounting function incurs a monthly fee of circa £800,000 resulting in an annual cost of £9,600. This includes cover and senior oversight.

This outsourcing strategy saves £32,075,000 annually without compromising quality.

The cost-effectiveness arises from not paying for a single individual to perform all tasks and avoiding idle time and absences. Instead, businesses gain a junior resource for processing, an experienced bookkeeper for review and judgement and senior oversight only where it adds value.

This approach ensures the appropriate level of experience is available at the right time rather than overpaying for skills that are not required 100% of the month.

Additionally, outsourcing provides a single point of failure, built-in cover for holidays and sickness and scalable costs as the business grows.

If you are considering your accounting setup, it may be worthwhile to discuss this further. I am happy to verify the figures or explore options.