Bookkeeping for Small Business

Three ways: hourly, a fixed monthly retainer set by volume, accounts, channels and entities, or a fixed price for a one-off project such as a cleanup or a platform move. Providers who also run controller work often price it the same way, with the tier rising as transaction volume or scope grows.

We follow strict data-protection practices, work on secure cloud platforms and keep access controlled, so only the people working on your books can reach them. Every close goes through a three-stage quality check before it reaches you.

There is no hard cut-off. If you have ongoing sales, expenses, bills and bank transactions and need monthly reconciliations and reporting, the service applies. What changes with volume is the scope: one channel and no inventory is the simplest tier, and several channels, inventory or entities move you up.

Automation suggests categories for routine transactions, matches receipts and flags anything unusual. A bookkeeper reviews and approves every entry before it posts. You get the speed of the software and the judgment of a person.

Many clients are fully running within two to four weeks of onboarding. Cleaning up or catching up past months can extend that, depending on how far behind the books are.

We add the entity to the scope, connect its accounts and sales channels, standardize its chart of accounts against yours, and adjust the plan. The monthly close carries on without a gap.

Bookkeeping records and reconciles transactions and produces the monthly statements. Accounting goes further into analysis, tax planning, forecasting and advice. Our bookkeeping is built to fit alongside your accountant or tax preparer, and our finance and accounting team covers the wider work when you need it.

The difference is when income and expenses are recorded, as our guide to cash basis vs accrual bookkeeping explains in full. Cash accounting records them when money is received or paid. Accrual accounting records revenue when it is earned and expenses when they are incurred, whatever the payment date. Accrual shows money you are owed and bills you have not yet paid, which gives a more complete picture of how the business is actually doing.

Usually accrual. It matches each month’s revenue with the costs of earning it, so margins and growth trends are real rather than a reflection of when cash happened to move. Under cash accounting, a month with a large inventory purchase can look like a loss and a month of collections can look like a record, which misleads anyone making decisions from the numbers.

It changes reported revenue, expenses, profit and working capital. Investors, lenders and boards generally expect accrual-based statements, because they show growth, margins and obligations in the period they belong to. A brand planning to raise money or borrow usually moves to accrual first.

Under cash accounting, subscription revenue is recorded when the payment arrives, so an annual plan paid upfront lands in a single month. Under accrual accounting, it is recognized as the service is delivered over the term, and the unearned part sits on the balance sheet until then. Accrual avoids overstating revenue in the month of collection and shows recurring revenue as it really runs.

Inventory is recorded as an asset when bought and becomes cost of goods sold when the product is sold, so each sale is matched with its cost and gross margin is accurate by month and by product. That makes slow-moving stock and weak product lines visible. Connecting the inventory system to the accounting and ecommerce platforms keeps purchases, sales, returns and adjustments current, and a periodic count catches valuation errors before they reach the margin.

Cash basis lets a sole proprietor or small company manage the timing of taxable income, for example by paying deductible expenses before year end. The drawbacks are uneven profits from year to year and a less complete view of what the business owes and is owed. Larger businesses may not be allowed to use it: IRS Publication 538 sets a gross receipts test, indexed for inflation, and rules for businesses that hold inventory. Multi-state businesses usually find accrual records easier to keep consistent across jurisdictions.

The books need to start tracking what was not tracked before: receivables, payables, inventory, accrued expenses and deferred revenue. That means opening balances for each, new month-end steps and often a change of accounting setup. Your tax preparer should be involved, because changing the method used on a tax return generally needs IRS approval, requested on Form 3115 according to IRS Publication 538.

Cloud accounting software runs online rather than on a local computer or company server. Your team and your bookkeeper see the same live numbers from anywhere. Bank feeds sync transactions automatically, and the software connects to ecommerce platforms, payment processors and other business tools, which desktop software handles with manual imports.

Real-time data from anywhere, no local servers to maintain, easier collaboration with outside advisors, and a system that scales as sales channels and volume grow. The return comes from less manual data entry, faster month-end closes and room to grow without adding finance headcount at the same rate. It varies with how manual your current process is, so measure hours spent and days to close before and after.

Budget for implementation, data migration, integrations with your other systems, user training, customization and ongoing support. Add-on modules, extra user licenses and API usage can raise the cost as the business grows. Counting these upfront gives the true total cost of ownership.

Map current processes first, then clean and validate historical data before it moves. Connect and test the integrations with sales channels, banks, payment processors and inventory, run the old and new systems side by side for a period, and train the team. The common problems are integrations that do not sync in real time, duplicated or lost data during migration, mismatched formats between systems, and teams slow to adopt the new tools.

Transactions arrive automatically from sales channels, payment gateways, bank feeds and inventory systems, so there is less manual entry and fewer keying errors. Dashboards show revenue, expenses and cash as they stand, and reconciliation and the month-end close get shorter.

Automatic exchange rate updates, invoicing in several currencies, reconciliation of foreign bank accounts, consolidated reporting across currencies, and calculation of gains and losses from currency movement. It should also handle international tax rules and connect to the payment gateways you sell through.

It depends on complexity. QuickBooks and Xero serve most small and growing brands well. Multi-entity businesses with heavy volume or subscription revenue often move to a platform such as NetSuite or Sage. Whichever you pick, check that it integrates with Shopify, Amazon, Stripe, your inventory system and your tax tools, and with your subscription billing if you have it. We work in QuickBooks, Xero, NetSuite, Sage, FreshBooks and Zoho Books.

More than a password. Look for encryption, multi-factor authentication, role-based access, regular security audits, and compliance with standards such as SOC 1, ISO 27001 or GDPR where they apply. Automated backups, disaster recovery and an audit log of every user action matter as well.

It links customer interactions to what actually happened financially. Support and sales teams can see purchase history, payment status, refunds, credits and balances in one place, which makes answers more accurate. Finance and marketing see which customers are profitable and which are not.

Alongside the cost of the support team: refund rate, return costs, chargebacks, warranty costs, compensation given to customers, support cost per order, repeat purchase rate and customer lifetime value. Together they show whether spending on support is building long-term value.

Give customer acquisition, customer support, retention and loyalty, refunds, shipping and returns their own accounts rather than burying them in general operating expenses. Separated, each one’s effect on profit is visible month by month.

By reconciling the ecommerce platform, payment processor, inventory system and accounting software against each other, automatically where possible. Each refund should update revenue, inventory and the customer’s payment record at once. Net sales and margin are then accurate, and the month-end reconciliation does not pile up.

Different rules in each state, thresholds that change, and sales spread across several online channels. Since the 2018 Wayfair decision, states can require out-of-state sellers to collect sales tax once they pass a threshold of sales or transactions into the state, and those thresholds differ. Wrong product tax categories or incomplete transaction data lead to filing errors and penalties.

Clean books hold a reliable record of every order, payment, refund, chargeback and adjustment, so a support agent can confirm what happened in minutes rather than asking finance. Patterns in disputes also become visible, pointing to payment or fulfillment problems worth fixing before they cost more revenue.