The answer to this question totally depends on where your business is at right now and whether you have either the time or the knowledge to do your bookkeeping yourself.
Understandably, owners of smaller businesses often try to do it themselves in the early days which can be a good way to minimise costs if done correctly. However, there will always be a crunch point when your business grows and time resources become so stretched that maintaining the books becomes that task that all too often gets neglected.
When that time comes, you need to assess three things:
Sometimes just looking at streamlining processes can help, whether that is introducing some efficient accounting software or other tools that might save on things like duplication of data entry.
This is often the more common option and is a happy medium ground between the cost of employing someone full time and struggling to cope with this task yourself.
The cost for outsourcing will obviously depend on the volume of work involved and the complexity of the day to day transactions that occur. The more traditional bookkeepers may still charge on a hourly rate whilst others may offer fixed fee arrangements which provides more control over cost budgeting.
Other benefits include the peace of mind that it is being handled for you leaving you to focus on what is most important, actually running your business! Also having someone with experience means they should be more in touch with any compliance issues that need to be considered from time to time and provide the necessary advice. Interaction with external bookkeepers is now easier than ever with the right use of technology.
If your business has grown significantly and warrants such as position then employing someone can be the answer. The cost of this will depend on the experience required but there are usually plenty of suitable candidates around.
The role of an employed bookkeeper would include most aspects of the basic accounting functions of a business such as:
Unless your employ someone with the necessary skills and qualifications then the more advanced accounting tasks such as tax returns, annual accounts for Companies House and cash flow forecasting would normally be handled by your accountant.
Ultimately, as with many things, the decision is yours based on cost and weighing up the pro's and con's associated with each of the above.