Outsourced Bookkeeping Services: The Complete Guide for Startups

Outsourced bookkeeping involves hiring a financial expert to manage the day-to-day financial matters of your startup. Ideal for venture backed startups that have limited capital and resources, bookkeeping services are designed to grow and scale with your startup. Read on to learn more:

What Is Outsourced Bookkeeping?

As the name implies, outsourced bookkeeping occurs when a company hires someone outside its own business to handle financial transactions, prepare financial statements, and do everything else involved in bookkeeping. It differs from in-house bookkeeping in that a firm works with an external provider for this service and does not rely on one of its own employees to handle this task.

When Should You Outsource Your Bookkeeping?

There’s really no bad time to look into outsourcing your bookkeeping. However, some situations may make more sense to explore this possibility seriously. For instance:

• Outsourcing bookkeeping may make sense for startups when staff need to focus on core business activities.
• Outsourcing may make sense if your business is growing and its financial situation is becoming more complex. Accurate bookkeeping is key to understanding the economics of a startup and its growth.
• Exploring outsourcing your bookkeeping may also make sense if you’re interested in cutting overhead costs. It’s often more cost-effective to outsource such services than it is to hire a full-time bookkeeper.

The Three Main Options for Bookkeeping Services

If your startup needs bookkeeping services, you have options. The three most common options are in-house bookkeeping, local bookkeeping and virtual bookkeeping. Here’s a closer look at each of these options.

In-House Bookkeeping

As the name implies, in-house bookkeeping involves hiring a full-time person to work within your startup. While having a dedicated person in-house can be beneficial, the cost of acquiring someone is higher when you consider salary and benefits.

Local Bookkeeping Services

Local bookkeeping services involve outsourcing to bookkeepers located nearby. Even if your startup works with an external partner, there’s still a high level of coordination and engagement. However, the cost of a local bookkeeper can still be high, and this relationship is usually not flexible or scalable.

Virtual Bookkeeping Services

Virtual bookkeeping services involve working with a remote external partner to manage your finances. It tends to be the most cost-effective option, and it’s also flexible and convenient.

Comparing Your Options

Feature	In-House Bookkeeping	Local Bookkeeping Services	Virtual Bookkeeping Services
Cost Efficiency	Highest cost—includes salary, benefits, and overhead	Moderate cost—typically hourly or retainer-based	Most cost-effective—subscription or tiered pricing
Communication Style	Immediate, in-person access	Scheduled interactions—primarily in-person or phone	Digital-first—video, email, and real-time platforms
Expertise Availability	Dependent on individual hire; may be limited in scope	Access to specialized professionals within locality	Access to diverse, niche-aligned expertise nationally or globally
Scalability	Limited—requires new hires or restructuring	Moderate—flexibility based on firm capacity	Highly scalable—easily adjusts with business growth
Technology Integration	Often requires manual setup and management	Varies—some modern, some traditional approaches	Strong—cloud-based tools with seamless integrations
Flexibility	Rigid—based on fixed roles and schedules	Somewhat flexible—depends on provider availability	High—on-demand service levels and time zone adaptability

 

What Tasks Do Outsourced Bookkeepers Handle?

Bookkeeping tends to be a fairly broad term, and you might be surprised at how many types of bookkeeping services are available. Here’s a look at the types of outsourced bookkeeping solutions at your disposal:

Financial Transaction Management

Basic bookkeeping consists of keeping track of any financial transactions, managing accounts payable and receivable, and more.

Monthly Financial Statement Preparation

A good bookkeeper will prepare comprehensive financial documents summarizing your startup’s financial performance over a specific month. These reports include income statements, bank statements, balance sheets, cash flow statements and more.

Accounts Receivable and Payable Management

Accounts receivable (AR) and accounts payable (AP) management involve collecting payments and ensuring timely payments to vendors and suppliers.

Tax Preparation Support

Staying current with tax laws or regulations is imperative, which is another crucial role a bookkeeper can help with.

Financial Reporting and Analysis

Bookkeeping may also help a startup with its financial management and reporting, assisting with any present and future decision-making as it grows.

Additional Specialized Services

Payroll processing does more than just ensure that employees are properly paid; it also ensures accurate processing, manages tax withholding and helps avoid errors along the way.

How Much Do Outsourced Bookkeeping Services Cost?

The average full-time bookkeeper salary is around $50,000 annually, a key reason why many startups elect to outsource this service as they’re still in growth mode.

Typical Pricing Models for Outsourced Bookkeeping

Pricing models for outsourced bookkeeping vary based on the provider that you’re working with. In most cases, pricing models are retainer-based, project-based or hourly. At Graphite Financial, our service plans start at $1,250 and can scale up as your startup’s needs evolve.

Factors That Affect Bookkeeping Costs

The key factors that influence the outsourced bookkeeping costs include the complexity of your startup, the level of expertise your startup requires, the type of service you require and how often your startup requires service.

Comparing Costs: In-House vs. Outsourced

Startups can save a considerable amount of money by outsourcing their bookkeeping services rather than hiring a full-time professional to work in-house. Considering the average salary for a full-time bookkeeper is about $50,000 per year and Graphite’s packages start at $1,250 per month (or $15,000 per year), that’s an annual savings of about $35,000 per year. Plus, your startup will save on benefits and other overhead costs.

The True Value: ROI of Outsourced Bookkeeping

Beyond cost savings, outsourcing bookkeeping gives startups access to high-level financial professionals who can help streamline their operational efficiency. What’s more, we always pair bookkeepers with startups relevant to their experience in the industry or market they’re operating in to offer more value as part of the partnership.

Key Benefits of Outsourced Bookkeeping for Startups

Outsourcing bookkeeping for your startup has many benefits, from freeing up startup leadership to work on core business activities to facilitating improved financial accuracy and compliance.

Time and Focus on Core Business Activities

In the early days of a startup, the founders typically handle bookkeeping tasks. However, as your startup grows and your finances become more complicated, outsourcing accounting services and bookkeeping allows your startup to have a professional manage your books, allowing founders and leadership to focus on core business activities more closely.

Access to Professional Expertise

One of the most significant benefits of outsourcing bookkeeping services is that you’ll always have access to high-level financial expertise that you can trust to manage your books properly.

Cost Savings and Predictable Expenses

If you pay a retainer for your bookkeeping services, you can better control your finances and their predictability. Regardless of the fee arrangement for outsourced accounting and bookkeeping, you’ll likely experience cost savings versus bringing in-house services.

Scalability as Your Startup Grows

Outsourced bookkeeping is also scalable and flexible and can grow with your startup as it evolves. For example, while Graphite’s service plans start at $1,250, we offer more comprehensive service tiers as your financial needs increase.

Improved Financial Accuracy and Compliance

Outsourced bookkeepers are trained professionals who do more than just manage your finances; they do it accurately and in compliance with any regulations. This helps ensure peace of mind and that your startup meets its legal and regulatory obligations.

Better Decision-Making with Timely Financial Data

Ideally, professional bookkeeping services provide you with accurate financial data and up to date financial records. This allows you to have a real-time snapshot of your finances, thereby allowing leadership to make smarter, faster decisions about operating your startup.

How to Choose the Right Outsourced Bookkeeping Partner

Selecting the right outsourced bookkeeping partner is similar to choosing any valued partner. Here’s a look at some of the tangibles and intangibles that you’ll want to be on the lookout for:

Essential Qualifications to Look For

Before you get to some of the intangibles, you’ll want to make sure that your outsourced partner meets the qualifications you’re looking for. Look for things like:

• Years of experience
• Advanced certifications
• Familiarity with basic accounting services and principles
• Experience in your industry of operation

Technology and Security Considerations

Bookkeeping software proficiency is another important consideration to take note of. Good bookkeepers will use industry-leading software and programs that integrate with your existing platforms. They can also help transition any existing financial programs to these platforms.

Additionally, good bookkeepers take data security very seriously and have programs in place for proper safekeeping.

Questions to Ask Potential Providers

Some of the information you’ll want to obtain from prospective bookkeepers during the vetting process includes:

• Communication preferences
• Experience managing finances in your industry of operation
• How quickly they are to respond in an emergency
• References from previous clients
• How do they manage confidential information

Transitioning to Outsourced Bookkeeping

Switching to outsourced bookkeeping is streamlined when you work with the right partner. At Graphite, we assign all of our startups an onboarding manager to ensure the process goes as quickly and as smoothly as possible, so we can begin providing service for your startup immediately.

Why Startups Choose Graphite for Outsourced Bookkeeping

Contact Graphite today to speak with a bookkeeping expert if you’re serious about finding the right bookkeeping partner. Let us show you how we can customize our solutions and service offerings to the specific needs of your startup and how we work with you to become a true extension of your startup. We also offer many value-added services that go beyond the standard tasks involved with bookkeeping.

FAQs

What’s the difference between bookkeeping and accounting?

Bookkeeping focuses more on day-to-day financial operations, while accounting involves more strategic analysis and data interpretation over the long term.

How much time will I save by outsourcing my bookkeeping?

While the exact time savings depends on your startup and the amount of time that founders and leadership currently spend on bookkeeping, the biggest benefit is that it will free up your startup’s team members to focus on core business activities while leaving bookkeeping to an experienced financial expert.

Is my financial data secure with an outsourced bookkeeping service?

Yes, at Graphite, we have an internal security team tasked with keeping our clients’ data safe and secure.

How do I know if outsourced bookkeeping is right for my startup?

The biggest factors to analyze to determine whether outsourced bookkeeping is right for you include the complexity of your current finances, the time spent internally managing your financial health, and whether it’s more cost-effective to work with a partner rather than hire someone in-house.

What information do I need to provide to my outsourced bookkeeper?

Your bookkeeper will typically need access to your most accurate financial records, accounting software and other relevant documents.

How often will I receive financial reports?

While this depends on the guidelines you set in the early stages of your working partnership, many bookkeepers provide monthly reports.

Can I switch from DIY bookkeeping to outsourced bookkeeping mid-year?

Absolutely. There’s no bad time to switch to an outsourced bookkeeper. You don’t have to wait for a new fiscal year to begin.

How do outsourced bookkeeping services handle tax preparation?

Bookkeepers handle tax preparation by preparing tax-ready reports, ensuring proper compliance and collaborating with tax professionals.