24 Jan 2022

There has been a lot of business inquiries recently which we have been carefully analyzing. These business inquiries which we have received over the last few years are from accounting firms across the country. And undoubtedly, one of the most common questions which we get asked very often is: ‘What is the cost of accounting outsourcing to India’?

So here in this blog, we will specifically cover:

  • The way outsourcing accounting firms in India price their services – The three different types of fees/engagement models
  • The actual cost of hiring in-house accountants

Top Accounting Outsourcing Companies Pricing

A number of pricing models are offered by accounting companies these days which have their own pros and cons. So in order to help you understand and comprehend the best pricing model for your accounting firm, these pricing models discussed below which are offered by outsourcing companies can work the best:

Ad hoc / Pay as you go model:

This is a favorite model for a lot of accountants. In this model as also the name might suggest, an outsourcing company offers resources for the time you require for a set price.

In this, an hourly rate is determined by the outsourcing company, that ranges basically from £10/hour to £20/hour for accounts, and £5/hour to £15/hour for bookkeeping. There are certain cases where the hourly rates of specific employees might differ based on their seniority levels.


  • For a pre-determined set of time, dedicated staff will be working for you.
  • This model works the best when you don’t have huge volumes of work


  • Here, the more the outsourcing company takes to do the work, the more it gets paid so it disincentive efficiency.
  • Under this, the job cost exceeds the estimate

Full-time employee (FTE) or Dedicated resource model:

This one is the most popular model among others. Unde this an accounting outsourcing company will give a dedicated employee at a fixed fee per month.

This fee might range from £1000/month to £1800/month for a senior accountant who is having around 2 years experience. At the end of each month, a fixed amount is billed to the accounting practice. Here, the outsourcing company basically scopes to complete the number of hours within the monthly fee.


  • Provide better control to the accountancy practice. Here, they can plan and manage work for their dedicated FTE.
  • If you have high volumes of work then it is more economical than hourly rates.
  • Assigning of a dedicated account manager who reports directly to the accountancy practice.
  • Offers better budget management without any fear of cost escalations


  • Here there is a need for a lot of managerial experience and a standardized accounting process.
  • Staffing can get disturbed by a major change in requirements.

The actual cost of hiring in-house accountants

The hiring of employees is one of the most important indicators of a growing accountancy practice. But, you will have wages to pay every month when you hire an employee. You might very easily be mistaken as you keep hiring more and more employees that the monthly salaries will be the only expense you will bear. The in-house hiring of staff can be very expensive. You will also be responsible for a lot of stuff besides paying the salaries like:

  • Recruitment costs- In the UK recruitment is a thriving industry. According to various researches, recruitment agencies usually charge between 20-30 per cent of the final salary. Making the job specification, interviewing, onboarding, screening, initial calls, hand-over, and training are the main costs. But, accounts outsourcing in India can help in reducing your labor costs which are reflected as overall savings for your practice. And these savings can add to a lot of differences.
  • Training cost-Before employees can start doing the work they need to be very well trained. Some or the other person will have to separately take time away from revenue-earning activities to do this. This precious time could otherwise have been utilized to bring in new clients or work on existing work. But in the case you outsource, an accounting outsourcing company then they will make sure that your outsourced workers are up to the mark on any accounting tasks you give them.
  • Office space and equipment– There are also the costs of onboarding, furniture, workstation, office space, parking spaces, and other equipment when you hire an employee in-house.
  • Time cost: The productive time of the in-house accountant is one of the problems that accountants fail to take into account. After considering all the holidays (28 days – including bank holidays), meetings, appraisals, sickness, and training, your in-house accountant will not work more than 225 days in a year.
  • Management costs: The cost of managing and developing your in-house accountants is the final cost. The yearly appraisals, meetings to discuss career opportunities, and providing on progress feedback everything come under this. The chance of taking three management days across the year, or even more if issues arise is very common.
  • Other employer costs: Auto-enrolment pension contributions, Employers’ liability insurance, Employer National Insurance contributions, phone bills, electricity bills, holiday pay, sick pay, maternity pay, cost of coffee and toilet paper, and a drink or two every now and then are some of the most obvious employer expenses that you will have to take care of.

Can accounting outsourcing work for your accounting firm?

Many of us think that accounting outsourcing might cost £5 or £8 an hour, but they are completely wrong in this. You will have to struggle to get the work done on time if you go for a provider who is charging very low. But, most of the employee-related costs mentioned above can be reduced or even eliminated by outsourcing accounting services. Reducing these costs offers you not only saves money but also provides you with the time and resources to grow your practice.

The main reason to choose accounting outsourcing 

  • For getting lower costs. 
  • Quicker TAT. 
  • Saving on the monthly cost. 
  • To get experienced staff members and so many more reasons. 

But the cost should always be the top priority. 

The best price an accounting practice should pay for a Full-time employee

The first thing you’ll do is a google search and speak to different providers and get the different pricing if you’re looking to hire a dedicated staff member. You will come across all kinds of pricing ranging from £500 to £2000 a month. But the main question that will come to our mind is, would we be able to get an accountant or Bookkeeper at less than £1000? If the answer to this would be yes, then what will the actual output of the work be? Again, a lot more questions will come up in your mind.

But, we shouldn't compare here to the in-house cost, infrastructure cost, hiring cost, or any others in case you are doing so. 

The best price you should pay for an accounting and bookkeeping outsourcing for Ad hoc Service is in the range of £11 to £14 an hour. 

A full-time employee (The most preferred way to choose to outsource) should be in the range of £1000 to £1500 a month for both Bookkeeper and Accounting roles depending on the requirement. Make sure you sign-up for a long-term minimum of 12 months to get the most out of the full-time member. 

This might be very confusing for you, so let’s find out what is actual outsourcing rates are for your accounting requirement. 

Contact us at sale@xlkpo.com top outsourcing companies in India today to know more about your outsourcing cost and will help you to find what is the best practice of outsourcing for your accounting firm.