How Much Does It Cost to Outsource Bookkeeping?

For an accounting firm in the UK, outsourcing bookkeeping services to India can cost you between £1,500 to £3,500 per month for a full-time resource, depending on their experience and industry expertise. If you plan to outsource on an ad-hoc or block-of-hours basis, the service may cost you between £16 to £18 per resource per hour.

In order to understand how you can be charged to outsource your bookkeeping services, it is important to understand the factors that determine their costs. Outsourced bookkeeping firms consider several factors when pricing their services. In this blog, we will look at and understand each of these factors.

5 Factors Determining the Cost of Outsourced Bookkeeping Services

Some critical factors determining and affecting the cost of outsourced bookkeeping services are listed below.

1. Scope of Services

The scope of bookkeeping services required by your accounting firm plays a significant role in determining the cost. The more comprehensive the services, the higher the cost is likely to be.

Bookkeeping services can range from basic tasks such as data entry, reconciliations, and financial statement preparation to more advanced services like financial analysis. The complexity and volume of work required will impact the pricing structure.

2. Frequency and Timeliness

The frequency and timeliness of bookkeeping tasks are essential considerations. If your accounting firm requires real-time or daily bookkeeping updates, it may involve additional costs. Similarly, if you need reports generated on a weekly, monthly, or quarterly basis, the service provider may charge accordingly. Urgent requests or last-minute changes may also incur additional charges.

3. Size and Industry Experience of the Outsourcing Firm

Not all outsourced bookkeeping providers charge the same, although the prices usually fall into a standard bracket. The cost of outsourcing depends on the firm you choose to partner with. An outsourcing firm with vast industry experience, professional accreditations, and high-level tech and data security will charge you higher than the others. Therefore, it is important to choose your outsourcing provider wisely in order to get the best deal.

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4. Technology and Software

The technology infrastructure and software used by the outsourced bookkeeping service provider can affect the cost. Cloud-based accounting software, automation tools, and advanced data security measures may incur higher charges. However, such technologies can enhance efficiency, accuracy, and data accessibility, providing long-term cost savings and improved service quality.

5. Engagement Model

Outsourcing companies provide diverse engagement models to suit the requirements of various clients. These models are often customisable based on an accounting firm’s exact needs. You can hire employees to work offshore in India or even onshore them to the UK for long-term commitments. Onshoring will cost you more than an offshore solution, but it comes with its exclusive benefits. Your outsourcing provider will charge you based on the engagement model you choose.

In-House Versus Outsourced Bookkeeping: Pricing Insight

We know that outsourcing is a cost-effective way of increasing your practice’s capacity and fueling productivity. But how much can you actually save by outsourcing your bookkeeping instead of hiring an in-house professional? Let’s look at the pricing comparison for both models.

The above factors significantly escalate the cost of having in-house resources as opposed to when you outsource bookkeeping to India. Outsourcing to India lets you hire talented bookkeepers at a fraction of the in-house cost and cuts the overheads to facilitate substantial savings.

The below table summarises the average cost of hiring an in-house bookkeeper versus an outsourced one for a UK accountancy practice. The example below is based on a Senior Accountant with two years of bookkeeping experience.

The above costs are approximate figures taken from Glassdoor and other relevant websites. These can differ from the actual prices you may incur when hiring a bookkeeper. In-house hiring includes several additional costs not included in the above table.

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Why Outsource Your Bookkeeping?

The primary reason accounting firms in the UK outsource bookkeeping to India is cost savings. But it has numerous additional advantages, such as beating capacity shortages, scaling up and down as required, integrating the newest technology at a minimal cost, and enhancing efficiency and productivity. Outsourcing also facilitates process streamlining and improvement, which is integral to building a future-ready accountancy practice.

Summing Up

Inflation is currently one of the gravest challenges facing businesses in the UK. Following it is the growing capacity crunch that’s making it tough for accounting firms to hire skilled resources. In such a scenario, outsourcing can be key in combatting the challenges.

QXAS, a market leader in outsourced bookkeeping services, can be your perfect partner to outsource end-to-end accounting and bookkeeping support in the UK. We have a vast talent pool of 500+ skilled accountants and bookkeepers available to work offshore as well as onshore in the UK. Our resources work on your preferred software and are well-versed in the latest tools and technologies that can transform your practice.

And it just takes a click to reach us. Book a free consultation with our experts here and we’ll be happy to take the conversation forward. If you prefer the traditional way, call us at +44 208 146 0808 or drop an email at [email protected]. Let’s take your practice to the next level together!