Choosing to hire a freelance bookkeeper vs a bookkeeping firm

Choosing to hire a freelance bookkeeper vs a bookkeeping firm

Your business has finally grown enough that you are thinking that you need to hire a bookkeeper. You aren’t looking at bringing one onto your staff, but you definitely would like some help. So, where do you start looking for a bookkeeper?

This can be a tough decision to make since this means that not only will you be sharing your business’s financial information, but you also need to add this expense to your operating costs. This expense will be well worth it though.


Think of how many hours you are spending each week doing your own bookkeeping. Now multiply that number by what you personally charge out as an hourly rate. With that figure in mind, think about how hiring a bookkeeper would save the expense of you doing your books, and how your time would be better spent growing your business.

Now all you need to decide is whether you should hire a bookkeeping firm or a freelance bookkeeper.

You need to make sure that whomever you hire to do your bookkeeping understands all of the current rules and regulations and won’t make any mistakes while doing them.

One of the first questions to ask is: what does a bookkeeper do? They are responsible for keeping your business’s financial information up to date. This includes all of your sales and invoices so that you can make sound business decisions where your finances are concerned. With the advances in technology, many programs are now cloud-based, which provides you with easier access to your financial information.

This works for both you as a business owner as well as for your bookkeeper, in that you can get documents to your bookkeeper in a timely fashion and likewise, you can access your financial information easier.

A bookkeeper oversees your ongoing financial transactions. This can include your daily sales (money coming in), invoices (going out), payroll, and so on. These transactions need to be recorded and reconciled so that you know where your money is at all times. They have the attention to detail to ensure your business runs smoothly.

It is up to you as an owner, if you decide to hire a freelance bookkeeper to ensure that they have the knowledge to take care of your books accurately. You do not need a formal education to work as a bookkeeper, and there currently isn’t a regulatory body overseeing them.

Freelance Bookkeepers

A freelance bookkeeper is someone who simply works for themselves, typically out of their home. This means that they will have lower overhead so they can offer you a lower hourly or fixed rate. Some freelance bookkeepers are open to commuting and working at your office if you prefer.

This can be beneficial in that they can ask you any questions as well as see what your daily activities are. A downside to them coming to your office is that you will need to provide them with a space, furniture, and possibly even a computer. Especially during the pandemic, this may be difficult. However, this means that nowadays technology must be coordinated for freelancers to learn about the business and learn about the books.

With there being no rules governing the education of bookkeepers, you run the risk of finding someone who just bought some software, is self-taught, and posted an ad for you to find them. Or you may be more fortunate and find one who is experienced or recently graduated from a bookkeeping program. This is the gamble that you take.

One of the best upsides to hiring a freelance bookkeeper, though, is that you are almost undoubtedly paying less. For many small businesses (especially today) this is huge because they need to save money wherever possible.

Freelance bookkeepers may work for more than one business at a time. If they are organized, they will schedule their time to ensure everyone’s deadlines are met and that books are kept up to date. A downside to this is that if they take a vacation or need a sick day, there isn’t anyone to take over their work. This means not only are they going to be behind, but so are your company’s books. They may also get overwhelmed at tax time. This could not only affect your daily bookkeeping but delay your taxes being filed on time.

If a freelance bookkeeper doesn’t have the experience that they said they did, they may not know how to accurately deal with provincial or federal sales tax. They may not know how to deal with your input tax credits when filling out a GST remittance form, and this will cost you money. Likewise, if they don’t have the experience with payroll and deductions, you could find yourself in trouble and owing money quickly.

Simply put, a freelance bookkeeper can save your business a lot of money, but it may lead to some unwanted tax and accounting troubles down the road if you hire the wrong bookkeeper.

Bookkeeping Firms

A bookkeeping firm hires bookkeepers who are permanently employed by their company. This means that you aren’t simply hiring one individual, you are hiring a team. Although the costs for hiring a bookkeeping firm can be more expensive than a freelance bookkeeper, it may be worth it for your business in the long run.

One reason for this higher expense is that a bookkeeping firm will typically employ more experienced individuals and they may be certified, professional bookkeepers. Of course, a firm will also have the costs associated with higher overhead, and they may have a guarantee of their services while providing you access to the larger team to get your work completed on time.

By having more than just one individual overseeing your books, you don’t have to worry about a vacation or sick days when it comes to getting your work done. It also means there is less worry about who does the books in the company because most firms have training and education requirements for all staff.

When it comes to deadlines, a bookkeeping firm will be able to make sure you stay on track and that your GST remittances and taxes, for example, are completed on time. As well, they will make sure your payroll is done, and done properly, when you need it to be.

With technology changing regularly, a bookkeeping firm has access to current software and technologies, that a freelance bookkeeper may not be aware of, or have access to these updates. As well, a bookkeeping firm may be able to provide you discounts or access to some payroll services and programs that may not be accessible to freelance bookkeepers.

When choosing a firm, you will find that they typically have staff with different skill sets, which allows for a broader range of experience and services. This allows you to have access to bookkeepers that can best serve your company. For example, a freelance bookkeeper may not know that different provinces and territories do not have all of the same deductions. With a bookkeeping firm such as Valley Business Centre, we not only know what your deductions should be, we can provide payroll services as well.

Which to choose?

As with any business relationship, you would like to find a bookkeeper that you can work with long-term, whom you can have a good working relationship with, and who can get to know your business needs. Hiring a bookkeeping firm means that you are hiring professionals to take care of your finances. However, hiring a freelancer means that you are getting the best bang for your buck in most instances.

Firms have the skills and training that allow them to handle your reconciling, payroll as well as taxes, with financial reporting accuracy. With rules surrounding taxes and business accountabilities, it is better for someone who stays up to date on this. Freelancers, however, may be specialized in one area or another and can be useful in fulfilling just one specific area.

When you are looking to grow your business, you may think of an accountant. An accountant builds on what a bookkeeper does for you and your business. This includes analyzing and interpreting your financial statements or providing an account analysis. A bookkeeping firm can help you with understanding your business’s needs and point you in the right direction if you need an accountant as well.

What decision you make for your business will depend on what your needs are. It is important to remember that you, as a business owner, are ultimately responsible for your bookkeeping. You want to take this into consideration when you are hiring a bookkeeper and ensure that they have the expertise that you require to maintain your books accurately.

You not only want to maximize the profitability of your business, but you want to avoid unnecessary costs. A freelance bookkeeper may not have the foresight to help manage your finances throughout the year in anticipation of tax time, they may not be able to complete them in a timely fashion and they may not be aware of current tax laws. This will cause you and your business to have to pay more in penalties.

Need help from an expert?

Still not sure which is best for your business? Let one of our experts at Valley Business Centre help. For over 30 years, Valley Business Centre has been providing comprehensive bookkeeping, payroll, and tax services to our clients in Whistler, Squamish, the Sea to Sky Corridor, and metro Vancouver B.C. areas. Valley Business Centre provides reliable and effective services to all clients.


This article is written for informational purposes only. It is current at the date of posting and changes to laws and regulations may result in the information becoming outdated. It is not intended to provide legal, tax, or financial advice. It is recommended that readers get advice from a tax professional before making any final decisions.

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