Are you one of the $32.5M+ business owners in the U.S.? We applaud you! Running a small business is no easy task, especially in today's tumultuous economic climate. We've found small business owners to be a scrappy lot; determined hard workers with a passion for community service and making a difference.

Where many small business owners struggle is bookkeeping and accounting. Unless numbers come naturally, this crucial aspect of small business can seriously trip you up. And not every entrepreneur has the time or resources to get proper bookkeeping training.

The result? Millions of small businesses let bookkeeping fall to the wayside. Potentially damaging the future of their businesses.

We're here to help. Consider this your quick guide to small business bookkeeping. You may have more options than you realize to simplify and streamline bookkeeping.

The best online bookkeeping services are more impressive than ever. Accounting firms that specialize in small business bookkeeping services can be found almost anywhere. And with the right combination of expert assistance and tools, you can take bookkeeping worries off your to-do list.

When to start looking into outsourcing bookkeeping services

Before your business starts growing, you can most likely handle bookkeeping tasks yourself to save money. However, as the business continues growing, it's a good idea to track what time you spend on accounting tasks. How much time would a professional bookkeeper invest in your bookkeeping tasks? At some point the time spent doing your own bookkeeping will outrank the cost of hiring help.

Are you potentially losing money by paying more taxes than is necessary? A large part of bookkeeping is knowledge of various tax laws including commonly missed deductions.

Small Business Bookkeeping Services: What are my options?

If you're a freelancer or micro business runner, you may be unclear on what bookkeeping services are. Put simply: bookkeeping is managing your income and expenses. It involves tracking transactions (managing the books), reconciling accounts, financial statements and reports, payroll, and tax filing.

There is no business, no matter how small, that doesn't need bookkeeping services.

Your first two options are: doing your own bookkeeping, or hiring someone else to provide bookkeeping services.

Bookkeeping services for smaller companies will help manage daily financial activities related to the business including recording income and expenditure and submitting financial statements. While there are ways DIY bookkeeping, it is difficult to keep up on all the records. On the other hand, hiring a bookkeeper can be expensive.

Whether you choose to do it yourself or hire help, virtual bookkeeping services are an inexpensive, simple way of doing business. And there are plenty of online bookkeeping services to choose from!

Online bookkeeping services for small businesses can be found for business owners that want to DIY their bookkeeping. And some of the best online bookkeeping services can be provided by third-party bookkeepers. It's hard to find a bookkeeping service nowadays that isn't provided online or "in the cloud".

What are online bookkeeping services?

Online bookkeeping services may come in the form of software you install on your computer, apps you access through a web browser or your phone, or through a bookkeeping freelancer or outsourced accounting group.

Online bookkeeping providers usually have specialized bookkeepers and finance consultants who will be able to handle all of the basic business functions. The most important role a bookkeeper plays is maintaining the correct information about your finances.

Bookkeeping is unavoidably necessary to launch any business due to IRS regulations on financial record keeping. Having the right information helps keep your business running smoothly during the tax year and prepare key financials.

Here are just a few of the online bookkeeping services for small businesses that are popular choices for small businesses:

Quickbooks Live

They’ll bring your existing financials up to date and manage your books.

Bench

Best suited to businesses that are fairly new and those who prefer to completely hand over their bookkeeping to someone else.

Merritt

A straightforward, budget-friendly bookkeeping option that runs on QuickBooks. Its team of bookkeepers categorizes bank transactions each month and produces financial reports, looping in CPAs as needed

Pilot

Pilot aims to serve startups with niche services, like help claiming the research and development tax credit.

Bookkeeper360

For businesses with more intensive bookkeeping needs, Bookkeeper360 is able to offer weekly financial reports and accrual basis accounting.

Bookkeeper.com

Cloud-based with a wide range of add-on services available, including bill pay, tax return preparation, and payroll.

Botkeeper

Using artificial intelligence (AI) and machine learning, automates the majority of bookkeeping processes and is meant to replace manual labor at bookkeeping firms.

Block Advisors

A branch of H&R Block that provides tax, bookkeeping, and payroll support.

These online bookkeeping services are all big companies with huge staffs of trained accountants and bookkeepers. The downside is that their clientele is also large, so it can be difficult to get quick one-on-one attention from a bookkeeper that is dedicated to your account and knows the ins and outs of your business.

That's why we recommend working with a smaller local and/or fully remote accounting firm that provides modern online bookkeeping services for small businesses. (That’s us!)

How to choose an online bookkeeping service?

You can see that there are several virtual bookkeeping services online that can help with your finances and your accounting needs and offer the best possible service at affordable costs.

Some choices like Bench offer free trials so that you can try their services prior to investing. Some provide moneyback guarantees when you are unhappy with your services after a few days. During the trial, note the ease with which your accountant communicates with him. If a process is not effective or friendly, this may signal a way of operating.

Smaller accounting firms may not have the resources to offer free trials or moneyback guarantees. The best way to examine your options here is to have a consultation. You should be able to have a frank and open conversation about your business and your needs. The bookkeeper you speak to should be down-to-earth and knowledgeable. Be sure to ask questions about what's most important to you. Here's a list of example questions you can ask:

• What industries do you have the most experience in?

• What is your availability like?

• Will I have a dedicated bookkeeper assigned to my account?

• How do you handle tax preparation throughout the year?

• Will my services be provided fully remotely?

• What is the typical company size that you work with?

• Do you work with the bookkeeping software I already use?

• How will the pricing and services change as my business grows?

• Do you help your clients apply for government funding like PPP and ERTC?

• How often can I reach out to my bookkeeper and how soon will I hear back?

• Do you also analyze expenses and look for ways to save me money?

What should I expect from virtual bookkeeping services?

The best online bookkeeping services have a wide range of features and platforms, from simple to advanced. Consequently, a range of features on one bookkeeping service may appeal more to extremely small companies, while the features of a completely different bookkeeping service could appeal to medium sized businesses. There is no one bookkeeping service that is universally ideal to all businesses. So you really have to do some digging and research to learn about your options and which online bookkeeping service is best for you.

Here's what to expect to be done from a virtual bookkeeping service:

Track revenue and expenses

Keeping track of your daily transactions helps you keep track of what money you've been earning and spending. Financial statements and reports also give insight into your cash flow and helps you determine how to improve your business. Keeping up on revenue and expenses also helps simplify the tax process and helps you find write-offs.

Establish internal controls

Internal controls help you avoid fraud or theft. Reconciling monthly credit card and bank card data provides important internal controls as it allows the identification of errors and potential false payments or expenses.

Keep business and personal finances separate

It's all to easy to combine business money with personal money, especially when you're first starting out. It is vital however to keep your business and personal finances separate. Not only is it better for potential tax audits, it makes managing your cash flow much more efficient.

All bookkeeping services should also offer the following:

• Accounts Payable / Accounts Receivable

• Account Reconciling

• Financial Statements

• Reporting

• Payroll

• State, local, and federal tax prep

• CPA on-hand

• One-on-one customer service

Best Online Bookkeeping Service practices for small businesses

Even though you want a small business online bookkeeping solution, it's important to stay involved in your business finances. You want to be able to monitor the performance of your bookkeeping services. And the best online bookkeeping service will want you tuned in so you can make good decisions for your small business.

Stay in touch

Check in with your bookkeeper from time to time, ideally you should be in touch with them at least once a month.

View reports

Your bookkeeper should be able to provide reports as part of their bookkeeping service. Whether they send reports voluntarily or you ask for them, actually take the time to look them over.

Ask for help

Your bookkeeping service is there to serve you. Whenever you are confused or need an explanation, ask for help. The best online bookkeeping services will even provide some coaching or ideas if you need them.

Be flexible

As any small business owner knows, there are lots of ups and downs in running a small business. Work with your bookkeeping service provider to adjust your services whenever necessary.

Keep calm

Money is a touchy subject and finances are very sensitive. Once you choose a bookkeeping service, be patient with the onboarding process. If a mistake crops up, don't lose your cool. It may take some time to get a rhythm going with your virtual bookkeeping services.

Frequently Asked Questions about online bookkeeping services:

How much should a small business bookkeeper charge?

What is the cost of bookkeeping? The cost of bookkeeping varies from location to location, and typically costs $40-100 an hour. Virtual bookkeeping services for small businesses may be priced differently. It may cost more if you have a full accounting firm at your disposal. Or the pricing may be a monthly recurring flat fee.

What does a bookkeeper do for a small business?

A bookkeeper's job is to track and share accurate and current financial details to a business. They are constantly monitoring accounts and transactions. Most commonly, this reporting is shared regularly with business owners for assistance in decision-making. Occasionally, a bookkeeper is involved in strategy as well.

What kind of bookkeeping is used by small businesses?

Cash basis bookkeeping can be as simple as recording money when it's spent and received. This might be the right fit for a freelancer or micro business. Accrual basis bookkeeping is more common and involves tracking credits and debits. It's also referred to as accounts receivable and accounts payable. Most virtual bookkeeping services use accrual based accounting.

Is bookkeeping necessary even for a small business?

Bookkeeping makes budgeting a lot easier for businesses. If your expenses or income are organized correctly you can easily check your finances and your expenses. Bookkeeping and money management can have an impact on every area of your business, including inventory and marketing.

Ready for the best bookkeeping service?

Pioneer Accounting Group ticks off all the boxes. Our testimonials speak for themselves.

Find out if we’re a good fit for your business. You can start a live chat right here to talk to a real accountant. Or you can request a free 30-minute consultation to learn more about what we offer and get a quote.

We're all about connecting businesses with accounting services that help them thrive, and bookkeepers that genuinely care about them. We'd love to get to know you!