Solopreneur Bookkeeping: DIY or Outsource?
Outsourcing bookkeeping is a business strategy.
If you're like me, you started your solo business doing your own bookkeeping. Even if you didn’t exactly know what you were doing, it was manageable at first. A few clients, a handful of expenses, maybe a spreadsheet or a simple accounting app.
As a former banker, I was comfortable with the money part of solopreneur bookkeeping. I set up my own budget, and did my own bookkeeping for years. I even prepared my own business tax return.
Then I hired a bookkeeper. Not because I couldn't do it, but because the mental energy it took was costing me more than a bookkeeper would. Every receipt I needed to forward, every transaction I needed to categorize, every statement I needed to reconcile — it all lived in my head as one more thing to keep track of.
Outsourcing bookkeeping can serve two very different needs. Either you’re not comfortable with bookkeeping or it’s not the best use of your time.
What is solopreneur bookkeeping?
Solopreneur bookkeeping is recording the income, expenses, and financial transactions for a one-person business. It includes managing accounting software, reconciling bank statements, tracking invoices, and preparing records for tax filing.
Bookkeeping can quickly become a mental drain that pulls your focus from work that brings money into your business. You might spend only a few hours on it per month, or you put it off because it’s a lower priority than other tasks. Come tax time, that becomes a giant headache.
When I did my own bookkeeping, I found that it was easy to track my income and expenses. I even looked at my monthly reports. But other bookkeeping tasks, I avoided or ignored, such as reconciling bank statements. I knew that it was part of maintaining clean books, but I had what I needed, so why bother?
Eventually, my business grew large enough that hiring a bookkeeper became necessary. Not only did I need someone to take the work off my plate, but I had questions about the proper way to handle certain scenarios.
Anna Burgess Yang
5 tips for outsourcing bookkeeping as a solopreneur
Most solopreneurs don’t manage their own books forever. Even if you start out with a DIY setup, eventually you’ll need help because of the amount of time or complexity involved.
If you’ve reached that point, here’s how to prepare to outsource your solopreneur bookkeeping.
1. Know when it's time to outsource
There “right moment” looks different for every solopreneur, but there are signs that it’s time to outsource.
- Your volume of transactions is increasing
- You're spending hours per week or month on bookkeeping
- You have questions about how to manage your books
For some, you might need a bookkeeper right away, because you have no clue. And that’s completely fine. YOLO-ing your bookkeeping can lead to costly tax mistakes or penalties later, so better to hire a bookkeeper from the beginning.
But for people taking a DIY approach, like I did, here’s a good determiner: When the cost of a bookkeeper is less than what you'd earn if you spent those hours on client work. At that point, bookkeeping comes at a cost to your business, even without paying a bookkeeper.
2. Find the right bookkeeper for a solo business
You don't need a big accounting firm. What you need is a freelance bookkeeper or boutique firm that understands the solo business model.
Ask your fellow solopreneurs if they have any recommendations, and interview a few bookkeepers. A good question to ask: "How do you typically work with solo business owners?" Their answer will tell you quickly whether they get the reality of running a one-person operation or whether they're used to working with teams and departments.
Keep in mind that a bookkeeper is not an accountant or a tax preparer. Typically, you would take the financial statements from your bookkeeper and provide them to a tax preparer, or use them to prepare your taxes yourself. The bookkeeper should understand the principles of bookkeeping, but may not be able to answer tax questions or provide any financial advice. If you need those things, you need to hire someone with different expertise.
3. Define what you want them to handle
Be specific about what your bookkeeper takes on. For me, the biggest wins were reconciliation (matching bank statements to expenses), keeping track of receipts, and preparing financial reports.
I also use my bookkeeper as a resource for oddball questions. Once or twice a month, something comes up that I'm not sure how to handle. Having someone to ask saves me from wondering if Google’s answers are accurate.
Make sure you understand what the bookkeeper will and will not do. My first bookkeeper only prepared reports for me quarterly (with a Loom overview) instead of monthly. If I wanted a monthly report, I pulled it out of Quickbooks myself. For my business at the time, this was fine.
4. Set up automation between your tools
You can also save time by setting up automation between the tools you use. I have automation set up to forward receipt emails directly to QuickBooks, so my bookkeeper spends their time on matching and categorization, not manual data entry.
I also have automation that sets up a new client in Quickbooks when I close a contract. This is work I’d have to do myself, even with a bookkeeper. By automating it, I’m not spending time on manual data entry either.
The combination of a bookkeeper plus automation means I barely touch the financial side of my business day-to-day. I only need to prepare client invoices. The receipts get captured automatically, the bookkeeper processes them, and I review the monthly reports. That's it.
5. Build a low-touch communication cadence
You don't need weekly calls with your bookkeeper. For most solo businesses, a monthly check-in covers everything. My bookkeeper sends me questions once a month if they’re not sure about a receipt or another transaction.
Once a quarter, a deeper review of trends and tax planning is useful, especially if you're tracking estimated tax payments. Your bookkeeper might be able to help you understand how much you need to set aside to pay your taxes.
Keep the communication process simple: email or a shared document works fine. Some bookkeepers even use client portals.
The real win: reclaiming your time
This isn't just about saving hours or freeing up your time for client work. It's also about clearing the mental space that bookkeeping occupies. It’s not your area of expertise.
When you're not thinking about whether you categorized last week's software purchase correctly, you can think about the work that actually grows your business.
If solopreneur bookkeeping is taking too much time and brain space away from your core work, it's time to outsource. The cost of a good bookkeeper is worth it.
Need to review the health of your business?
Check out this quarterly review checklist for solopreneurs.
Common things to watch for when outsourcing bookkeeping
- Not reviewing statements yourself. Outsourcing doesn't mean ignoring your finances. Spot-check your bookkeeper's work monthly to catch errors or mismatches.
- Mixing personal and business expenses. Keep a clear line between personal and business transactions. A dedicated business bank account and credit card make this automatic.
- Choosing based on price alone. Evaluate quality, experience, and services offered, not just the monthly rate.
- Not setting up automation first. If your bookkeeper is manually entering receipts, you're paying for time that automation could handle. Set up receipt forwarding and bank syncing before onboarding your bookkeeper.
- Waiting too long to outsource. If you've been telling yourself you'll "get to it this weekend" for months, that's a sign it's already time.
FAQs
How much does a bookkeeper cost for a solo business?
Freelance bookkeepers for small solo businesses typically charge between $200-$500 per month, depending on transaction volume and services included. Some offer hourly rates ($25-$75/hour) for lighter workloads. The cost is often less than the revenue you'd generate by spending those hours on client work instead.
When should a solopreneur outsource bookkeeping?
You should consider outsourcing when bookkeeping takes more than 4-5 hours per month, when your transaction volume is increasing, or when the mental load of managing it yourself takes you away from revenue-generating work. If the cost of a bookkeeper is less than your effective hourly rate, the math works out in your favor.
What's the difference between a bookkeeper and an accountant?
A bookkeeper handles day-to-day financial recording: categorizing expenses, reconciling statements, and maintaining accurate books. An accountant focuses on higher-level financial analysis, tax strategy, and filing. Most solopreneurs need a bookkeeper year-round and an accountant at tax time. Some firms offer both.
Can I automate my bookkeeping instead of hiring someone?
Automation handles parts of bookkeeping well, such as capturing receipts, syncing transactions with your bank, and basic categorization. But automation alone can miscategorize expenses and miss nuances. It also doesn't replace human judgment for reconciliation and tax preparation. The best setup is automation plus a bookkeeper: automation handles data entry, the bookkeeper handles accuracy.
What should I look for in a bookkeeper?
Look for someone with experience working with solo businesses or freelancers, familiarity with your accounting software, and clear communication. Ask how they handle questions between scheduled check-ins and whether they can support quarterly tax planning. A good fit matters more than the lowest price.
