The honest answer is: sometimes, and not always. Anyone selling you outsourcing who says otherwise is selling rather than advising.
Here is a model you can run yourself, and the three situations where hiring in-house is genuinely the better decision.
Count the whole cost, not the salary
The comparison most people make is provider fee versus salary. That comparison is wrong, and it is wrong in a direction that flatters the in-house option.
A fully-loaded cost of employment typically runs at 1.2 to 1.35 times base salary, before you count anything specific to a finance role. The components:
- Employer payroll taxes and statutory contributions
- Pension or retirement contributions
- Healthcare and other benefits
- Paid leave, sick leave and public holidays — you pay for roughly 20% of the year in which no work is produced
- Recruitment cost, whether an agency fee at 15–20% of first-year salary or your own time
- Workspace, equipment and IT support
- Software licences — a Xero or QuickBooks seat, a document capture tool, a payroll platform
Then add two costs that are specific to finance roles and almost never counted.
Review time. A single bookkeeper has nobody checking their work. Either you accept unreviewed output, or somebody senior reviews it — and that somebody is expensive. If your controller spends four hours a month reviewing, that is real money.
Key-person risk. One person holding your entire finance process is a genuine business risk that has a cost, even if you only pay it occasionally. Ask anyone whose bookkeeper resigned in the week before year-end.
Now count the honest cost of outsourcing
To be fair in the other direction, outsourcing has costs that do not appear on the invoice:
- Your time during onboarding. Realistically 10–20 hours across the first month, answering questions and reviewing early output.
- Communication overhead. Async working is slower for ambiguous questions than turning to someone at the next desk.
- Context loss. An in-house person absorbs context passively — they hear the sales conversation, they know a big order is coming. An outsourced team knows what you tell them.
- Switching cost if it does not work out, though a provider with proper documentation and 30-day terms makes this small.
The rough thresholds
With those on both sides, a few patterns hold reasonably well.
Under ~50 transactions a month: neither. Good software and an hour a week of your own time genuinely beats paying anyone. Come back when it hurts.
50–400 transactions a month: outsourcing usually wins clearly. This volume needs consistent daily attention but does not fill a full-time role, and a part-time local hire is difficult to recruit and easy to lose.
400–1,500 transactions: it depends on the second question below. Both models work; the deciding factor is rarely cost.
Above 1,500 transactions with real complexity: a hybrid usually beats either extreme. An in-house finance lead who owns judgement, context and relationships, with the processing volume handled outside.
The second question, which matters more than volume
Cost gets people to look at outsourcing. It is rarely what determines whether it works. The better question is:
How much of our finance work requires context that only exists inside this company?
If most of the work is rules-based — code the transaction, reconcile the account, run the payroll, file the return — it travels well. If most of it requires knowing that this customer always disputes the first invoice, that this supplier’s quotes exclude delivery, that the founder wants revenue recognised a particular way, it travels badly.
Most businesses have both, in a ratio they have never measured. Spend an hour categorising last month’s work into “rules-based” and “needs context”. The ratio you find is a better guide than any cost model.
Three cases where you should just hire
You need someone in the room. If your finance person is expected to sit in commercial meetings, push back on a sales director, or be visible to staff who need payroll questions answered face to face, hire.
Your process is undocumented and judgement-heavy. Sending an undocumented process overseas does not fix it — it exports the problem and adds a time zone. Document it first. Then decide.
You are about to be acquired or audited to a high standard. During periods of intense scrutiny, the value of someone who can drop everything and sit with a diligence team is hard to replicate remotely.
And one where you should not hire
If you are considering a first finance hire mainly because your books are late and you are not sure what else to do, pause. Hiring under time pressure is how people end up with the wrong person in a role they had not defined, which is considerably more expensive than either option in this article.