What support does my business need?
Outsource finance or hire someone?
You can pay an outside firm to do your bookkeeping, accounts or finance work, or employ someone to do it in the business. Some businesses do a mix of both.
The short answer
Outsourcing means paying a firm for agreed work. Hiring means employing someone, which brings employer duties such as payroll, pensions and Employers' Liability insurance. Outsourcing may suit you if the work does not fill a job, or you want several skills from one supplier. Hiring may suit you if you need someone in the business every day.
Outsourcing and hiring compared
| Outsource to a firm | Employ someone | |
|---|---|---|
| What you pay for | The work in your agreement with the firm | A person's time, as set out in their employment contract |
| Employer duties | None for you: the firm employs its own staff | Yes: register as an employer and run payroll, plus pensions, insurance and other duties1 |
| Skills | You may get access to several people with different skills, depending on the firm | You get one person's skills, unless you hire more |
| Being in the business | Remote or by visit, as agreed | In the business and on hand day to day |
| Cover for holidays and leaving | Depends on the firm and your agreement | You need to arrange it |
| Cost | We have not found a reliable published source for what either costs, so we give no figures. Compare a firm's written quote with the full cost of employing someone, not just the salary. | |
The ICAEW notes that a business deciding whether to recruit may choose instead to use contractors or outsource some functions.2
What employing someone involves
GOV.UK's step-by-step guide to employing someone for the first time includes:1
- checking you can afford it, including the National Minimum Wage, employer National Insurance, sick pay and pension contributions;
- making the workplace safe and accessible, preventing discrimination and keeping employee data safe;
- registering as an employer with HMRC and setting up PAYE: you must register before the first payday, and cannot register more than 2 months before you start paying people;
- workplace pension responsibilities;
- getting Employers' Liability insurance.
If you already employ people, much of this is in place. If the finance person would be your first employee, it is extra work to plan for.
Which may fit
Outsourcing may suit you if the work is a few days a month or less, you want bookkeeping, payroll and accounts from one supplier, or you do not want to manage a finance employee.
Hiring may suit you if there is enough finance work to fill a job, you need someone on site who knows the business closely, or you want the work done to your timetable each day.
When you may use both
Some businesses employ a bookkeeper or finance assistant for the day-to-day work and outsource the yearly accounts, tax and senior advice to an accountancy firm or a part-time finance director. If you do this, agree who does what in writing, so nothing is done twice or missed.
Questions to ask
- How many hours a week of finance work do we really have?
- For a firm: exactly what is included, what costs extra, and who will do the work?
- For a firm: what happens when the person we deal with is away or leaves?
- For hiring: what is the full cost once employer National Insurance, pension and other costs are added? Your accountant or payroll provider can help you work it out.
- Who will check the work of an in-house person, and how?
For the difference between bookkeeping and accounts work, see Accountant or bookkeeper?
Sources
- GOV.UK, "Register as an employer" (part of "Get ready to employ someone for the first time: step by step"). gov.uk/register-employer. Checked 12 October 2026.
- ICAEW, "Managing your business" (Find a Chartered Accountant, help with your business). icaew.com. Checked 12 October 2026.