Vents MagaZine Music and Entertainment Magazine
Related Articles
There is nothing more important for a business owner than managing their financial records and keeping their house records in order. Bookkeepers are the professionals responsible for accurately recording and organizing these financial transactions, including income, expenses, assets, and liabilities.
Nowadays, people employ freelance or in-house bookkeepers depending on their business needs. If you are more of a hands-on person, you can also get a bookkeeper coach to teach you these skills and manage your business’s cash flow. However, for those who don’t have the time for the daily nitty gritty, hiring one is the best option. If so, is it better to hire an employed or freelance bookkeeper?
What Sets Them Apart?
Freelance and employed bookkeepers differ in terms of how they do their jobs, and they both have their pros and cons. Let’s look at these differences.
- Employed Bookkeepers
This variant is for bookkeepers looking for permanent or full-time employment as they work exclusively for a business. All the work they do is for a single company, and is bound by a contract to do their job in a given place at a certain time and in a certain way. One of the major advantages of working as this type of bookkeeper is that you are assured of work every month and your income is steady. The employer, on the other hand, enjoys the full-time attention and services of the bookkeeper.
A common downside is that employed bookkeepers are less flexible when compared to their counterparts in terms of the hours they work and vacation. They also don’t have that much control over the assignments they receive.
- Freelance Bookkeepers
Even though the services they perform are similar to those of their employed counterparts, these bookkeepers are not officially part of the company. This means they are not exactly on the payroll, and their pay is likely decided in terms of hours or per project. Whenever clients do business with freelance bookkeepers, they ask about their rates and negotiate for the work they want done.
Unlike employed bookkeepers who get into a contract and are paid a certain amount every month, freelance bookkeepers are the ones who set the amount. Negotiations happen, and once both parties are in agreement, the work begins. Clients don’t have to worry about any legal, financial, or taxation complexities, as it is up to the freelancers to pay their taxes. They also don’t cover their healthcare, pension, and all the other benefits that employed freelancers would otherwise receive.
Summarised Differences Between Freelance and Employee Bookkeepers
- While the employee works under a legal contract, the freelancer is self-employed. This means as long as freelancers deliver the work, they will get paid regardless of where and how they do the work.
- Freelancers negotiate for their tasks from clients, while employee bookkeepers get all their tasks from their employers.
- Although employee bookkeepers enjoy benefits such as monthly salaries, healthcare, and pensions, freelancers are only compensated based on the negotiated rates and work done.
- The freelance bookkeeper has full control over the work and schedule to be followed, whereas, with employee bookkeepers, it is entirely up to the employer to make this decision.
- Employee bookkeepers work for just one client, whereas the freelance bookkeeper can serve multiple clients at a go.
In Conclusion
If you are an employer torn between choosing an in-house or freelance bookkeeper or wondering which of the two career paths to take, don’t forget to weigh the pros and cons first. Freelancers are more flexible in terms of where they work from and the number of clients they handle at a time, while employed bookkeepers have more stable incomes. As an employer, the choice solely lies in your business needs, budget, and the expertise and specialization required for your bookkeeping needs.
