Your accountant just quit. Your books are three months behind. Tax season is approaching, and you’re staring at a pile of receipts wondering how this became your problem.
Sound familiar? This is the moment most business owners discover outsourced accounting—and realize they should have started sooner.
Outsourced accounting has shifted from a cost-cutting tactic to the default operating model for growing businesses. Cloud technology made it seamless. Talent shortages made it necessary. And the math made it obvious: why build an internal department when you can buy access to an entire team for less?
This guide explains what outsourced accounting actually means, what services are included, how it compares to hiring in-house, what it costs, and how to decide if it’s right for your business.
What Is Outsourced Accounting?
Outsourced accounting is the practice of hiring an external firm or team to handle some or all of your company’s accounting functions instead of employing in-house staff. The external provider manages tasks like bookkeeping, financial reporting, accounts payable, and month-end close—delivering the outputs you need without the overhead of building an internal team.
The model works because accounting is process-driven and technology-enabled. Cloud accounting software (QuickBooks, Xero, NetSuite) means your books live online, accessible to anyone you authorize. Your outsourced team logs in, does the work, and delivers reports—regardless of where they’re physically located.
What outsourced accounting is:
An external team handling your accounting operations Flexible capacity that scales with your business Access to expertise across multiple skill levels A managed service with defined deliverables and timelines
What outsourced accounting is not:
A temporary fix until you hire someone Only for companies that can’t afford “real” accountants Offshore-only or low-quality by definition The same as hiring a freelance bookkeeper
The spectrum ranges from basic bookkeeping support to complete finance department replacement. Where you land depends on your size, complexity, and what you want to keep in-house.
What Does Outsourced Accounting Include?
Outsourced accounting services span a wide range. Most providers offer tiered packages, letting you choose the level that matches your needs.
Core Bookkeeping Services
The foundation of any outsourced engagement:
Transaction recording and coding. Categorizing all income and expenses correctly. The daily work of maintaining accurate books.
Bank and credit card reconciliation. Matching transactions to statements, catching errors, ensuring books reflect reality.
Accounts payable (AP). Processing vendor invoices, scheduling payments, managing cash outflow. Some providers handle bill pay directly; others prepare everything for your approval.
Accounts receivable (AR). Sending customer invoices, tracking payments, following up on collections. Critical for cash flow visibility.
Payroll integration. Ensuring payroll data flows correctly into your books. Most businesses use payroll providers like Gusto or ADP; outsourced accountants reconcile the data.
Financial Reporting and Close
Moving beyond transaction processing to actual financial management:
Monthly close process. Reconciling all accounts, making adjusting entries, and producing complete financial statements on a reliable schedule.
Financial statement preparation. Profit & loss, balance sheet, cash flow statement—the reports that tell you how your business is actually performing.
Management reporting. Custom reports beyond standard financials: departmental P&Ls, project profitability, KPI dashboards, budget vs. actual analysis.
GAAP compliance. Accrual-based accounting that meets professional standards. Essential if you have investors, plan to raise capital, or might sell the business.
Advanced and Strategic Services
For companies needing more than transaction processing:
Controller-level oversight. Review and supervision of accounting processes, internal controls, accounting policy decisions. The judgment layer above bookkeeping.
Cash flow forecasting. Projecting future cash positions to avoid surprises. Particularly valuable for businesses with uneven revenue or significant payables.
Budgeting and variance analysis. Building annual budgets and tracking performance against them. Understanding why results differ from expectations.
Audit and tax preparation support. Preparing schedules and documentation for external auditors or tax preparers. Coordinating with your CPA firm.
Systems implementation. Selecting and setting up accounting software, integrating with other business tools, designing chart of accounts.
Specialized Services
Depending on your industry or situation:
Sales tax compliance. Managing multi-state nexus, calculating and remitting sales tax, handling registrations. Complex for e-commerce and SaaS businesses.
Revenue recognition. Proper treatment of complex revenue (subscriptions, multi-element arrangements, long-term contracts) under ASC 606.
Equity and stock option accounting. Tracking grants, exercises, and forfeitures. Supporting 409A valuations. Essential for startups with equity compensation.
Multi-entity consolidation. Combining financials across subsidiaries, handling intercompany transactions, producing consolidated statements.
Service levels at a glance:
| Level | What’s Included | Best For |
|---|---|---|
| Basic | Bookkeeping, reconciliation, AP/AR | Small businesses, simple operations |
| Standard | Basic + monthly close, financial statements, management reports | Growing businesses, $1-10M revenue |
| Comprehensive | Standard + controller oversight, forecasting, budgeting | Complex businesses, $5-50M revenue |
| Full Outsource | Comprehensive + strategic support, CFO services | Companies replacing entire finance function |
Benefits of Outsourced Accounting
Why do companies outsource accounting instead of hiring? The reasons go beyond cost savings.
1. Cost efficiency.
The most obvious benefit. An in-house accountant costs $60,000-$90,000 in salary, plus 25-30% for benefits, taxes, and overhead. Total: $75,000-$117,000 per year for one person. Outsourced accounting runs $2,000-$6,000 per month ($24,000-$72,000/year) and gives you a team, not a single point of failure.
2. Access to deeper expertise.
Outsourced teams include people at multiple levels: bookkeepers, senior accountants, controllers, sometimes CFOs. You get access to expertise you couldn’t afford to hire—and wouldn’t need full-time anyway. When a complex issue arises, someone on the team has seen it before.
3. Scalability without hiring.
Business grows? Transaction volume increases? Outsourced teams scale with you. No job postings, interviews, onboarding, or management burden. Business slows? Scale back without layoffs.
4. Continuity and coverage.
In-house accountants quit, take vacations, get sick. When your one accountant leaves, you’re scrambling. Outsourced teams have built-in redundancy. Someone always knows your account.
5. Better technology and processes.
Good outsourced firms invest in tools and workflows that most small businesses wouldn’t build themselves. Automation, integrations, standardized processes—you inherit their infrastructure.
6. Faster, more reliable close.
Most businesses close their books slowly and painfully. Professional outsourced teams close in 15-20 business days consistently. You get financial visibility faster.
7. You focus on the business.
Every hour you spend reconciling accounts or chasing down receipts is an hour not spent on customers, product, or growth. Outsourcing buys back your time.
Outsourced vs. In-House Accounting: How to Decide
The decision isn’t always obvious. Here’s a framework:
| Factor | Outsourced | In-House |
|---|---|---|
| Cost | Lower for most businesses under $30M | Higher, but predictable |
| Expertise depth | Access to full team | Limited to who you hire |
| Scalability | Flex up/down easily | Adding headcount is slow |
| Control | Less direct oversight | Full control |
| Institutional knowledge | Distributed across team | Lives with individuals |
| Response time | SLA-based, usually same-day | Immediate if they’re available |
| Management burden | Minimal | Significant |
| Cultural fit | External relationship | Part of your team |
Choose outsourced when:
You’re under $20-30M in revenue and don’t need full-time accounting staff You want to avoid management overhead You value flexibility and scalability You need expertise beyond what one hire provides You’re growing fast and can’t keep up with hiring Your current approach isn’t working and you want a reset
Choose in-house when:
You have enough volume to keep someone busy 40 hours/week You need someone physically present (increasingly rare) You have highly specialized needs requiring deep institutional knowledge Culture and integration matter more than cost efficiency You’re large enough to build a proper finance team anyway
The hybrid approach:
Many companies combine both. They hire an internal accounting manager or controller while outsourcing transaction processing and overflow work. The internal person handles relationships, judgment calls, and strategic work; the outsourced team handles volume. This model works well for companies in the $10-50M range. Understanding the difference between CFO and controller roles helps determine which functions to keep internal and which to outsource.
How Much Does Outsourced Accounting Cost?
Outsourced accounting costs depend on transaction volume, complexity, and service level. For a detailed breakdown, see our guide to outsourced accounting cost.
Typical monthly cost ranges:
| Business Size | Transaction Volume | Monthly Cost |
|---|---|---|
| Small ($500K-$2M revenue) | <150/month | $1,000-$2,500 |
| Growing ($2M-$10M revenue) | 150-400/month | $2,500-$5,000 |
| Mid-market ($10M-$30M revenue) | 400-800/month | $5,000-$8,000 |
| Larger/complex ($30M+ revenue) | 800+/month | $8,000-$15,000+ |
Factors that increase cost:
Higher transaction volume Multiple entities or locations Complex revenue recognition Inventory accounting Multi-state sales tax GAAP/audit-ready requirements Industry-specific compliance (healthcare, government contracting) Faster close timelines More sophisticated reporting
Pricing models:
Fixed monthly fee. Most common. Predictable cost based on expected scope. Transaction-based. Price scales with volume. Good for seasonal businesses. Hourly. Less common for ongoing work. Sometimes used for projects. Tiered packages. Bronze/Silver/Gold with different service levels.
One-time costs:
Most providers charge for initial cleanup and setup—especially if your books are behind or messy. Expect $2,000-$10,000+ depending on the state of your records. This is a one-time investment, not ongoing. If your books need significant repair before ongoing work can begin, a dedicated bookkeeping cleanup engagement is usually the first step.
How to Get Started with Outsourced Accounting
1. Assess your current state.
Are your books clean or a mess? Do you have an accounting system set up? How far behind are you? Be honest—providers need accurate information to scope correctly. If you’re not sure whether your situation qualifies as “behind” or “broken,” here are five signs it’s time to outsource.
2. Define what you need.
Basic bookkeeping? Full monthly close? Controller oversight? Sales tax? Know your must-haves and nice-to-haves before you start comparing.
3. Evaluate 3-4 providers.
Look for firms that specialize in businesses like yours—by size, industry, or stage. Ask about their process, team structure, technology, and pricing. Request references.
For startups specifically, see our guide to outsourced accounting for startups.
4. Understand what’s included.
Get clarity on scope. What’s in the base price? What costs extra? How do they handle scope changes? What’s the close timeline?
5. Plan for transition.
Switching from DIY or another provider takes time. Expect 4-8 weeks to fully onboard. You’ll need to grant system access, provide historical data, and answer questions about your business.
6. Start before crisis.
The worst time to find outsourced accounting is when you’re drowning. Start the search when things are manageable—you’ll make better decisions and have smoother onboarding.
The right outsourced accounting partner disappears into the background. Your books are accurate, your reports arrive on time, and you stop thinking about accounting except when making decisions. That’s the goal.
As your business grows, you may find that accounting alone isn’t enough — questions about cash strategy, fundraising, or growth planning signal the need for fractional CFO support.
Ready to stop worrying about your books? Talk to Exact Partners →
