Is Outsourced Bookkeeping Really Saving You Money?

Bookkeeping frequently bottlenecks firms’ productivity, resources, and growth. That’s why so many accounting firms turn to outsourced bookkeeping services as a cost-saving measure. But before you throw yourself on the outsourcing bandwagon, let’s talk about the hidden costs of outsourced bookkeeping you might not know about:

• Business Growth and Seasonal Shifts: As your business grows, bookkeeping needs can change, affecting how much you pay for it if it’s outsourced. Embrace growth, but be prepared for your bookkeeping needs to evolve alongside your business, especially during busy seasons like tax season (you don’t want to mess with the IRS). 
  
  
• Different Tasks, Different Costs: Not all bookkeeping tasks are created equal — hell, what is bookkeeping anymore? From routine data entry to complex financial analysis and advisory services, your range of workload can vary greatly, as well as the associated outsourcing costs that come with it.
  
  
• A Third Party Can Ruin Your Party: Having a diverse set of providers can be detrimental to your bookkeeping, as information, security, and geographic and socioeconomic factors can affect your accounting firm’s capacity and ability to provide a reliable service. 
  
  
• Communication Problems: An outsourced bookkeeping team could be cost-efficient and highly responsible, but not every team is familiar with how you operate your business or what industry you are in — or even your timezone — making it difficult to communicate your needs and wants. 

Knowing these factors can help you handle the costs better and understand why outsourced bookkeeping — even with its fair amount of benefits — might not be the best solution for your accounting firm.

Fixed vs. Variable: The Pricing Models Behind Outsourced Bookkeeping

When evaluating outsourced bookkeeping services, pricing models matter. Most providers follow either a fixed or variable cost structure. Each comes with pros and cons: 

Fixed Costs: Predictable, but Not Always Flexible

• No Surprises: You know exactly what you’re paying each month.

• Ease of Onboarding: Simple to scale without renegotiating. 

• Predictable Margins: Great if your client load and bookkeeping needs are consistent.

Variable Costs: Fair, but Can Fluctuate

• Pay-As-You-Go: You pay for the actual work done—no more, no less.

• Better Resource Allocation: Ideal for fluctuating or seasonal workloads.

• Risk of Cost Spikes: During busy times, your outsourced bookkeeping costs can shoot up unexpectedly.

These models aren’t enemies—they’re tools. The key is picking the one that matches your workload, client needs, and growth goals.  

Is Outsourced Bookkeeping the Smartest Choice? 

Sure, outsourcing your bookkeeping can seem like a clean handoff—but there’s a smarter, more scalable alternative: automation. Before you commit to outsourcing, ask yourself:

• Is Your Workload Predictable? If not, fluctuating fees from outsourced bookkeeping services could hurt your margins.
  
  
• Are You Tracking Profitability? Make sure you're analyzing client profitability before adding an external bookkeeping provider to the mix.
  
  
• What Exactly Do You Need Help With? List out the tasks. If it’s basic, maybe outsourcing works—but if it’s strategic or advisory in nature, you'll want tighter control.
  
  
• Does the Pricing Model Fit Your Billing Strategy? If you charge by the hour or value-based pricing, a rigid outsourced bookkeeping plan may hold you back.

That’s why bookkeeping software like Botkeeper (you thought we wouldn’t mention what we do?) can be a better option for managing your bookkeeping needs.  

And while we’re not saying outsourcing doesn’t work, automated accounting offers a more reliable, efficient, and cost-saving way forward. It also makes your work more efficient and adapts to your bookkeeping needs, making the old dilemma of which pricing model to pursue more about strategy than ever.