In-House vs Outsourced Accounting: Complete Cost Comparison
A detailed analysis of both accounting models to help you make an informed decision for your business. Compare costs, benefits, and find the right fit.
One of the most significant decisions growing businesses face is how to manage their accounting function. Should you build an in-house team or outsource to a specialized provider? This choice impacts not just your bottom line, but your operational efficiency, financial accuracy, and ability to scale.
In this comprehensive guide, we'll break down both models with real cost comparisons, analyze the pros and cons of each approach, and help you determine which option makes the most sense for your specific situation.
What is In-House Accounting?
In-house accounting means employing full-time staff to manage your financial operations. This typically includes hiring bookkeepers, staff accountants, a controller, and potentially a CFO, depending on your company size and complexity.
Typical In-House Accounting Team Structure:
Bookkeeper
Daily transactions, data entry
Staff Accountant
Reconciliations, reporting
Controller
Financial oversight, controls
CFO
Strategy, fundraising, planning
Around 60% of small businesses still use in-house accountants, though this percentage decreases significantly for businesses that have been operating longer and have discovered the benefits of outsourcing.
What is Outsourced Accounting?
Outsourced accounting involves partnering with an external firm to handle some or all of your financial operations. This can range from basic bookkeeping to full-service finance department functions including CFO-level strategic support.
Modern outsourced accounting providers leverage cloud technology, automated workflows, and trained teams to deliver consistent, high-quality financial management. The best providers bring not just cost savings, but also enhanced expertise, better controls, and scalable capacity.
Did you know?
At MZBPO, we operate as the outsourcing arm of Muniff Ziauddin and Co., a BKR International member firm ranked among the top 10 global accounting associations. This means our clients get internationally aligned processes and professional standards.
Cost Comparison: Breaking Down the Numbers
Let's look at the real costs of each model. These figures are based on US market rates for 2026, though the principles apply globally.
In-House Accounting Costs (Annual)
| Role | Base Salary | Benefits (20%) | Total Cost |
|---|---|---|---|
| Bookkeeper | $45,000 - $55,000 | $9,000 - $11,000 | $54,000 - $66,000 |
| Staff Accountant | $55,000 - $70,000 | $11,000 - $14,000 | $66,000 - $84,000 |
| Controller | $90,000 - $130,000 | $18,000 - $26,000 | $108,000 - $156,000 |
| CFO | $150,000 - $250,000 | $30,000 - $50,000 | $180,000 - $300,000 |
* Additional costs not shown: office space, equipment, software licenses, training, recruiting fees, and management overhead.
Outsourced Accounting Costs (Annual)
| Service Level | Monthly | Annual | What's Included |
|---|---|---|---|
| Basic Bookkeeping | $300 - $800 | $3,600 - $9,600 | Transaction recording, reconciliations |
| Full Bookkeeping | $800 - $2,000 | $9,600 - $24,000 | + AP/AR, payroll entries, monthly close |
| Bookkeeping + Controller | $2,000 - $5,000 | $24,000 - $60,000 | + Financial reporting, oversight, controls |
| Full Finance Function | $5,000 - $15,000 | $60,000 - $180,000 | + CFO advisory, forecasting, strategy |
The Bottom Line
For a growing business that needs bookkeeping, monthly reporting, and controller-level oversight:
In-House Cost
$120,000 - $250,000/yr
Bookkeeper + Staff Accountant + Controller
Outsourced Cost
$24,000 - $60,000/yr
Full bookkeeping + controller
Potential savings: $60,000 - $190,000 annually
Pros and Cons of Each Approach
In-House Accounting
Advantages
- • Direct control over staff and processes
- • Immediate availability for questions
- • Deep institutional knowledge over time
- • Physical presence in the office
- • Can handle ad-hoc requests quickly
Disadvantages
- • High fixed costs (salaries, benefits)
- • Turnover risk and knowledge loss
- • Training and management overhead
- • Limited expertise breadth
- • Difficult to scale up or down
- • Single point of failure risk
Outsourced Accounting
Advantages
- • 40-60% lower costs than in-house
- • Access to senior-level expertise
- • Scalable based on business needs
- • No turnover or hiring concerns
- • Built-in backup and continuity
- • Best practices and modern tools
- • Predictable monthly costs
Disadvantages
- • Less direct control over staff
- • Communication requires structure
- • May not be on-site
- • Initial transition period needed
When to Choose Each Model
In-House Accounting Makes Sense When:
- You have complex, industry-specific needs that require specialized knowledge (e.g., certain manufacturing or regulated industries)
- Your business requires real-time, on-site financial decision support throughout the day
- You have sufficient volume to keep a full-time team consistently busy (typically $50M+ revenue)
- Budget is not a constraint and you prefer maximum direct control
Outsourced Accounting Makes Sense When:
- You're a growing business ($1M - $50M revenue) that needs professional finance support without the overhead
- You want access to senior-level expertise (controller, CFO) without full-time salaries
- Your business has variable transaction volumes or seasonal fluctuations
- You've experienced turnover issues or are struggling to find qualified accounting talent
- You want to focus leadership time on core business rather than managing finance staff
The Hybrid Approach: Best of Both Worlds
Many businesses find that a hybrid model works best. You might keep certain functions in-house while outsourcing others. Common hybrid configurations include:
In-House AP Clerk + Outsourced Bookkeeping
Keep someone local for check runs and vendor relationships while outsourcing the rest of the books.
In-House Controller + Outsourced Staff
Senior oversight stays internal while day-to-day processing is outsourced.
Full Outsourced + Fractional CFO
Entire finance function outsourced with strategic CFO support as needed.
Outsourced Bookkeeping + Internal Audit
Leverage outsourced efficiency with independent audit oversight.
Making Your Decision
The choice between in-house and outsourced accounting isn't one-size-fits-all. The right answer depends on your business size, growth trajectory, budget, industry, and management preferences.
However, for most growing businesses in the $1M - $50M revenue range, outsourced accounting delivers significantly better value: lower costs, access to senior expertise, scalability, and the ability to focus on what you do best—running your business.
Questions to Ask Before Deciding:
About MZBPO
MZBPO is the outsourcing arm of Muniff Ziauddin and Co., an independent member of BKR International—the 5th largest global accounting association. We provide outsourced bookkeeping, internal audit, payroll, and finance services to growing businesses worldwide.
