Bookkeeping is a valuable part of running a business. This is because it helps you keep track of your finances, including your income and expenses. There are two main bookkeeper types: those that a company employs and those who work as freelancers.
In this blog “Employed vs freelance bookkeepers“, we’ll look at the key differences between these two types of bookkeepers so that you can decide which one is suitable for you and your business.
The freelance bookkeeping business model
There are two main types of bookkeeping businesses: employed and freelance. Both have their own pros and cons, so it’s essential to understand the difference before deciding which type of bookkeeper to hire.
Employed bookkeepers typically work for an accounting firm or other type of business that provides bookkeeping services. The main advantage of this arrangement is that the bookkeeper is usually guaranteed a certain amount of work each month, which can provide a steadier income.
However, employed bookkeepers may be less flexible regarding their hours and vacation time, and they may also have less control over their work assignments.
On the other hand, freelance bookkeepers work independently and are not affiliated with any particular company. This gives them much more flexibility in terms of their work schedule and assignments. However, it also means they may not have as much job security as employed bookkeepers.
So, which type of bookkeeper is suitable for you? It all relies on your individual needs and preferences. A freelance bookkeeper may be the better option if you value flexibility and independence.
Rates and responsibilities
There are some key factors to consider when considering the difference in rates between employed and freelance bookkeepers. The first is the experience level of the bookkeeper. An experienced bookkeeper is likely to charge more than someone who is just starting out.
The second thing to consider is the number of hours required for the job. A freelance bookkeeper may be able to do the job in less time than someone who is employed, which could save you money. Finally, think about the level of responsibility required for the job.
An employed bookkeeper may be responsible for a larger number of clients than a freelance bookkeeper, which could mean they have more work and therefore charge more.
Read also:- Cost of an accountant for a small business
How the freelance bookkeeper works
The freelance bookkeeper is a professional who provides bookkeeping services to businesses on a contract basis. This arrangement can be beneficial for businesses that do not have the need or resources to maintain a full-time bookkeeping staff.
The freelance bookkeeper can work remotely or on-site, depending on the needs of the business.
The freelance bookkeeper will typically invoice the business for its services every month. They will keep track of the business’s income and expenses and prepare financial statements and reports as needed. The freelance bookkeeper can also help with tax preparation and other financial tasks.
Overall, the freelance bookkeeper can provide many of the same services as an employed bookkeeper, but on a contract basis. This can be a cost-cutting solution for businesses that do not need full-time bookkeeping staff.
Where the freelance bookkeeper works
As a freelance bookkeeper, you can work from anywhere you have an internet connection. This means you can work from home, a coffee shop, or even on the go like a nomadic lifestyle. You’re not tied to a desk in an office like an employed bookkeeper.
The drawback to this is that you may have to work more hours to make up for the time you would otherwise spend commuting.
The type of work a freelance bookkeeper does is also different from an employed bookkeeper. An employed bookkeeper typically works for one company and handles all of its financial transactions.
On the other hand, a freelance bookkeeper may work for several companies and handle only their financial transactions.
This means that as a freelance bookkeeper, you may have to wear many hats and juggle multiple clients.
You may not be the only client of a freelance bookkeeper
When you’re the only client of a freelance bookkeeper, there can be some pros and cons to consider. On the one hand, you may feel like you have more control over the work that’s being done. On the contrary, you may also find that your bookkeeper is stretched thin trying to keep up with your demands.
One thing to remember is that a freelance bookkeeper is likely working with other clients as well. This means that you may not always be their top priority. If you have a tight deadline or a last-minute request, then your bookkeeper may not be able to accommodate you.
Alternatively, working with a team of employed bookkeepers can give you some peace of mind. Knowing that other people are backing up your bookkeeper can make it easier to relax and trust that the work will get done. And if something does come up, there’s always someone else who can pick up the slack.
The bookkeeping employee
The bookkeeping employee is usually an office worker who is responsible for maintaining financial records. They may work for a company or organization or be self-employed. The bookkeeping employee typically works regular hours and is paid a salary or hourly wage.
The bookkeeping employee is responsible for a variety of tasks, including recording transactions, preparing financial statements, and managing accounts payable and receivable. They must have strong math skills and be able to use accounting software. Most bookkeeping employees have at least a bachelor’s degree in accounting or a related field.
It’s all in the contract
In the matter of bookkeeping, there are two main ways that professionals can structure their services: employed or freelance. Both arrangements have advantages and disadvantages, and the best option for you will ultimately depend on your specific needs and preferences.
Take a look at the main differences between employed and freelance bookkeepers:
Contracts: One of the most significant differences between employed and freelance bookkeepers is the contract. When a bookkeeping firm employs you, you’ll typically work under a long-term contract. This can provide stability and peace of mind, knowing that you have a consistent income coming in.
However, it also means that you may have less flexibility in terms of hours worked and vacation days are taken.
By contrast, freelance bookkeepers usually work on a per-project basis. This means that they can be more flexible with their time, but it also means that they may not have the same level of job security as an employed bookkeeper.
It’s important to carefully consider your needs before deciding which type of arrangement is right for you.
Compensation: Another key difference between employed and freelance bookkeepers is compensation. When you’re employed, your salary will be set in advance and will usually remain.
More control, but more obligations
The key difference between employed and freelance bookkeepers is that freelancers have more control over their work and more obligations. As an employee, you are limited in how much power you have over your work.
You may be able to negotiate some aspects of your job, but ultimately your employer has the final say. This can be frustrating if you feel like you could be doing your job better if given more freedom.
On the other hand, being a freelancer means you are your own boss. You have complete control over how you do your job and when you do it.
However, this comes with responsibility. If you don’t perform well or meet deadlines, there is no one else to blame but yourself. This can be unsettling for some people but can also be very empowering.
Eventually, it is up to you to decide whether the extra control and responsibility of freelancing are worth it. If you are someone who prospers on independence and enjoys directly impacting your work, then freelancing may be the right choice for you. But if you prefer the stability and security of a traditional job, then employed bookkeeping may be a better fit.
A review of the differences: At a glance!
There are many differences between employed and freelance bookkeepers, but here are some of the most notable ones:
-Employed bookkeepers typically have set hours and work in an office environment. They are usually expected to complete tasks during their regular work hours.
-Freelance bookkeepers often have more flexible hours and can work from home or another location of their choosing. Depending on their availability, they may also be able to take on more or less work.
-Employed bookkeepers usually have a higher level of job security since they typically work for one company long-term.
-Freelance bookkeepers may have more control over their workload and projects, but they also face the possibility of having periods of time where they do not have any work lined up.
-Employed bookkeepers typically receive benefits such as vacation days and health insurance from their employer. Freelance bookkeepers will need to provide their own benefits.
-The pay for employed and freelance bookkeepers can vary greatly depending on the individual’s experience, skill level, and the industry they are working in.
employed vs freelance bookkeepers, If you’re considering a career in bookkeeping, you may be wondering whether you should become employed or freelance. While both choices have their advantages and disadvantages, the decision ultimately comes down to what’s best for you and your business goals.
If you want the stability of a regular paycheck and benefits, then becoming employed is the way to go.
Although, if you’re looking for more flexibility and freedom in your work, then freelancing may be the better option. Whichever path you choose, make sure you do your research so that you can make an informed decision.