25 Bookkeeping Tips for Small Businesses

  

The Best Online Bookkeeping Services for Small Businesses

As a small business owner, managing your financial records is crucial for the success and growth of your company.

Elite online bookkeeping services perfect for small businesses.

However, bookkeeping tasks can be time-consuming and overwhelming, especially as your business expands. That's where online bookkeeping services come in. These services allow you to outsource your bookkeeping tasks to professionals, ensuring accuracy and freeing up your time to focus on other aspects of your business. In this article, we will explore the best online bookkeeping services for small businesses, their features, and how to choose the right one for your needs.

Table of Contents

1.  How do online bookkeeping services work? #how-do-online-bookkeeping-services-work

2.  Choosing the right online bookkeeping service #choosing-the-right-online-bookkeeping-service

3.Best overall: Bookkeeper360 #best-overall-bookkeeper360

4. Best for scalability: Pilot #best-for-scalability-pilot

5.   Best for QuickBooks users: QuickBooks Live #best-for-quickbooks-users-quickbooks-live

6.  Best budget-friendly option: Merritt Bookkeeping #best-budget-friendly-option-merritt-bookkeeping.

7. Frequently Asked Questions (FAQs).

8.  Conclusion #conclusion

How do online bookkeeping services work?

Online bookkeeping services offer a range of tasks to help manage your financial records. These tasks can include recording transactions, reconciling bank statements, handling accounts receivable, running financial reports, managing payroll, and preparing tax forms. By outsourcing these tasks to a bookkeeping service, you can ensure accuracy and save time.

Most online bookkeeping services provide monthly or weekly reports, depending on your preference. These reports can include financial statements, cash flow analysis, and other key insights into your business's financial health. Additionally, many services offer a dedicated contact or team of bookkeepers with whom you can communicate regularly.

Choosing the right online bookkeeping service

When selecting an online bookkeeping service for your small business, there are several factors to consider:

Accounting method compatibility

Different businesses may use different accounting methods, such as cash basis or accrual basis accounting. It's important to choose a bookkeeping service that aligns with your preferred accounting method to ensure accurate financial reporting.

Integration with accounting software

If you already use accounting software like QuickBooks or Xero, it's essential to find a bookkeeping service that integrates seamlessly with your chosen software. This integration allows for efficient data transfer and ensures that your financial records are up to date.

Add-on services

Consider whether you require additional services beyond basic bookkeeping tasks. Some online bookkeeping services offer add-ons like tax support, payroll management, HR support, and inventory management. Assess your business's specific needs and choose a service that offers the necessary add-ons.

Catch-up bookkeeping

If you have fallen behind on your bookkeeping tasks, some services can help you catch up by going through your old receipts, invoices, and bank statements. However, keep in mind that catch-up bookkeeping usually incurs an additional fee.

Communication frequency

Consider how often you want to communicate with your bookkeeper. Online bookkeeping services usually offer regular communication with a dedicated bookkeeper or team of bookkeepers. Determine your preferred level of communication and choose a service that aligns with your needs.

Budget

Lastly, consider your budget when selecting an online bookkeeping service. Prices can vary significantly, so it's important to understand the total cost, including any add-on services or software fees.

Best overall: Bookkeeper360

Bookkeeper360 is our top pick for online bookkeeping services due to its scalability, wide range of add-on services, and integration with multiple accounting software options. Unlike some competitors, Bookkeeper360 supports both accrual basis and cash basis accounting methods, making it suitable for businesses of varying complexity.

With Bookkeeper360, you can upgrade to weekly financial reports for a more detailed analysis of your business's financial health. Additionally, the service offers add-on services like payroll, HR support, invoicing, and tax filing, allowing you to customize your plan based on your specific needs.

Bookkeeper360 integrates seamlessly with QuickBooks Online and Xero, two popular accounting software options. This integration ensures efficient data transfer and eliminates the need for manual data entry.

Best for scalability: Pilot

If your business is a startup or in a growth phase, Pilot is an excellent choice for online bookkeeping services. Pilot specializes in serving startups and offers niche services like assistance in claiming research and development tax credits. The service also provides discounts for pre-revenue companies and offers add-on support and tax services for CFOs.

One standout feature of Pilot is its focus on accrual basis accounting. While many services primarily focus on cash-based bookkeeping, Pilot operates exclusively on an accrual basis. This approach can provide valuable insights for venture capitalist-backed companies, making it easier to calculate important metrics like burn rate.

The pilot also integrates with popular accounting software like QuickBooks and offers a range of additional services, including catch-up bookkeeping, job costing, and project-based accounting.

Best for QuickBooks users: QuickBooks Live

If you already use QuickBooks Online for your accounting needs, QuickBooks Live is a convenient option for online bookkeeping services. The service seamlessly integrates with QuickBooks Online, eliminating the need for additional software or data transfers.

When you sign up for QuickBooks Live, the company matches you with a bookkeeper who has experience in your industry and similar availability. Bookkeepers can provide monthly financial reports, giving you valuable insights into your business's financial performance.

It's important to note that QuickBooks Live focuses solely on bookkeeping tasks and does not offer services like tax planning or payroll management. However, if you are already comfortable with QuickBooks Online and are primarily seeking bookkeeping assistance, QuickBooks Live is a reliable choice.

Best budget-friendly option: Merritt Bookkeeping

For budget-conscious small businesses, Merritt Bookkeeping offers a straightforward and affordable bookkeeping option. The service runs on QuickBooks, making it ideal for businesses already using this accounting software.

Merritt Bookkeeping's team of experienced bookkeepers categorizes your bank transactions each month and produces accurate financial reports. While the service does not offer payroll or HR support, financial forecasting, tax planning, or other add-on features, it provides essential bookkeeping services at an affordable price point.

Annual subscriptions are also available, starting at $249 per month when billed yearly. These subscriptions require a larger upfront payment but can save you money in the long run.

Frequently Asked Questions (FAQs)

How to find the best virtual bookkeeping service for your business?

To find the best virtual bookkeeping service for your business:
1. Define Your Needs:   - Outline your specific bookkeeping requirements and the level of service you need.
2. Research Options:   - Explore different virtual bookkeeping services. Look for reputable providers with positive reviews.
3. Check Qualifications:   - Ensure the service has qualified and experienced bookkeepers familiar with your industry.
4. Scalability:   - Choose a service that can scale with your business growth.
5. Technology Integration:   - Confirm compatibility with your existing tools and the use of advanced technology.
6. Security Measures:   - Prioritize services with robust security measures to protect your financial data.
7. Cost Transparency:   - Understand the pricing structure and any additional fees involved.
8. Client Support:   - Assess the level of customer support provided by the virtual bookkeeping service.
9. Trial Period:   - Opt for services that offer a trial period to test their compatibility with your business.
10. Referrals and Recommendations:    - Seek recommendations from peers or industry associations to find trusted services.
11. Compliance and Regulation:    - Ensure the virtual bookkeeping service complies with relevant regulations and standards.
12. Communication:    - Choose a service with effective communication channels to keep you informed about your financial status.
13. Customization:    - Look for services that offer customization to tailor their approach to your business needs.
14. Track Record:    - Consider the track record and experience of the virtual bookkeeping service in the industry.
15. Feedback and Reviews:    - Read client testimonials and reviews to gauge the experiences of other businesses.
By carefully evaluating these factors, you can identify the virtual bookkeeping service that aligns best with your business requirements and goals.

Can I do bookkeeping online?

Yes, you can do bookkeeping online. Many businesses leverage online bookkeeping solutions and platforms to manage their financial records. Here are steps to get started:

1. Choose Online Accounting Software:

   - Select a reputable online accounting software such as QuickBooks, Xero, or FreshBooks.

2. Set Up Your Accounts:

   - Create separate accounts for business and personal finances within the chosen software.

3. Connect Bank Accounts:

   - Link your business bank accounts and credit cards to the online software for automatic transaction tracking.

4. Record Transactions:

   - Enter income and expenses regularly. Categorize transactions correctly for accurate financial reporting.

5. Reconcile Accounts:

   - Regularly reconcile your bank statements with your online records to identify and correct discrepancies.

6. Generate Financial Reports:

   - Utilize the reporting features of the software to generate financial statements, such as profit and loss statements and balance sheets.

7. Backup Data:

   - Ensure regular backups of your financial data to prevent data loss.

8. Security Measures:

   - Implement security measures to protect sensitive financial information. Use secure passwords and enable two-factor authentication.

9. Consult a Professional:

   - If needed, seek advice from a professional accountant to ensure compliance and accuracy in your bookkeeping.

10. Continuous Learning:

    - Stay informed about updates and improvements in online bookkeeping tools. Continuous learning will help you optimize your bookkeeping processes.

Doing bookkeeping online offers several advantages, including accessibility from anywhere with an internet connection, collaboration with team members, and real-time financial insights. Ensure that you choose a reliable and secure online accounting platform that suits the needs of your business.

Conclusion

Outsourcing your bookkeeping tasks to an online service can save you time and ensure accuracy in your financial records. When choosing an online bookkeeping service, consider factors such as accounting method compatibility, integration with accounting software, add-on services, catch-up bookkeeping options, communication frequency, and budget.

Based on our research, Bookkeeper360 is the best overall online bookkeeping service, offering scalability, a wide range of add-on services, and integration with multiple accounting software options. For startups and businesses in a growth phase, Pilot is an excellent choice, specializing in niche services and operating on an accrual basis. QuickBooks Live is a convenient option for QuickBooks users, providing seamless integration with the software. Lastly, Merritt Bookkeeping offers a budget-friendly option for small businesses seeking essential bookkeeping services.

Choose the online bookkeeping service that best suits your business's needs, and enjoy the benefits of accurate financial records and more time to focus on growing your business.