An independent contractor charges per hour and costs the business only the exact amount charged. They receive a form 1099 at the end of the year and must file and pay their own taxes on the money the business paid them. Unlike an independent contractor, an employee costs the business:
1.) Their hourly wage
2.) Federal employment taxes
3.) State employment taxes
4.) Workers compensation insurance
5.) Liability insurance
6.) Holiday pay (if offered)
7.) Vacation pay (if offered)
8.) Sick pay (if offered)
As you can see, an employee actually ends up costing the company more, for the same amount of work.
Aside from cost, there are more reasons to use an outside bookkeeper. One being that you, as the business owner, receive an unbiased opinion and forecast on your business' financial situation. Also, the independent bookkeeper/accountant has a reputation to uphold for the interest of their own company and will typically work harder and be more detailed in their work, as the biggest form of advertisement for an independent bookkeeper/accountant is word of mouth and their business is built solely on their reputation.
