6 Best Online Bookkeeping Services for Small Businesses in 2025

In this comprehensive guide, we’ll go over everything you need to know, from understanding the core responsibilities of a bookkeeper to setting up your office and attracting clients. Before diving in, it’s worth asking how clean books could support your broader financial goals — like budgeting, forecasting, or applying for funding. If you’re already working on your financial projections, having one can make the process faster and far more accurate. Technical proficiency is the backbone of effective bookkeeping, combining software mastery with financial acumen to maintain accurate books and ensure tax compliance. They offer pre-vetted professionals, ensuring only the top 1% of talent makes it through their rigorous selection process. This process includes detailed attention to detail, proactive problem-solving, and effective communication skills, which are assessed through live simulations.

Financial reporting tools

Example revenue sources include sales, services provided, and interest. Business expenses include advertising, office equipment, insurance, utilities, and depreciation. With an accounting system, you need to decide when to record transactions. With a cash account system, you’ll record transactions anytime cash changes hands. An accrual accounting system records transactions, like sales, immediately, even if money isn’t exchanged until later.

• Income is recorded as it’s received; otherwise, it’s not considered revenue.
• This lets them avoid the kinds of service gaps that may crop up with an individual freelancer.
• Customize account titles and categories as needed to reflect your specific business.
• Small expenses, such as office supplies or coffee meetings, may seem insignificant, but they can add up over time and impact overall profitability.
• Let’s review some tasks involved in bookkeeping, especially as they relate to your business’s day-to-day operations.
• The software’s bookkeeping features include double-entry bookkeeping (the most accurate bookkeeping and accounting method), plus dozens of customizable reports.

Merritt Bookkeeping

• Reconciliation is the process of comparing internal financial records against bank statements to verify accuracy.
• In the accrual method, on the other hand, you would record the expense in January, on the date that you received the invoice — regardless of when you ended up paying for the parts.
• The books of an ecommerce startup are different from the books of a dentist; try to find a bookkeeper who has worked with businesses like your own before, and has experience in your niche.
• Double-entry bookkeeping requires at least two entries per transaction — a debit from one account and a credit to another.
• With annual revenue of $660,000, you’d make a tidy profit of $198,000.
• With tax codes frequently changing, it’s important to ensure you follow the most current laws and regulations.
• While bookkeepers do focus on details, they need to understand how those details tie back to a company’s finances as a whole.

Bank and SBA loans are probably the best option, other than friends and family, for funding a bookkeeping business. Keep in mind, it’s relatively easy to transfer your business to another state. In the early stages, you may want to run your business from https://www.bookstime.com/ home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

• No matter the payment method used, each transaction must be recorded with the date, amount, and purpose.
• In the early stages, you may want to run your business from home to keep costs low.
• Setting up a chart of accounts is a critical first step in bookkeeping.
• Common bookkeeping errors include transposing numbers, entering data in the wrong account, adding or leaving out digits or decimal places, or duplicating and omitting entries.
• This way, the payroll provider won’t have access to your primary account.

Preparing financial reports

FreshBooks is one of the most highly rated and straightforward programs for accurate accounting records, professional bookkeeper services, and more. You can find payroll providers that integrate with different accounting software for automatic data entry. FreshBooks Payroll, powered by Gusto, seamlessly integrates payroll management with accounting, automating data entry and simplifying compliance. There are numerous types of outsourced bookkeeping services you can hire. Local bookkeepers, in-house bookkeepers, and freelance bookkeepers, to name just a few. You can even hire a virtual bookkeeper to do all your bookkeeping and accounting tasks while being located anywhere in the world.

Additionally, your dedicated Virtual CFO is available to discuss and guide you through important financial decisions, helping you maximize profitability and minimize risks. Keeping business and personal expenses separate is crucial for clear financial records and tax accuracy. When you combine bookkeeper for small business the two, it becomes difficult to track business profitability and can raise red flags with the IRS. Without them, it’s nearly impossible to make informed decisions about your business’s financial health. As a business owner, bookkeeping might not rank high on your list of priorities.

Flat Monthly Pricing: No hourly billing, no surprises

• Professionalism is more than certifications and degrees — all of which you’ll find at Miller & Company.
• This content has been made available for informational purposes only.
• Small businesses across various industries, especially those facing revenue and cash flow challenges, will find Invensis’ bookkeeping services particularly beneficial.
• This trend creates ample opportunities to start a bookkeeping business.
• Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
• An accountant, on the other hand, interprets financial data, prepares financial statements, analyzes business performance, and offers strategic financial advice.

With numerous options, selecting a service that aligns with your business needs and budget is crucial. It helps you keep your finances in check and your business on track for success. In this guide, we’ve rounded up the best online bookkeeping services for small businesses in 2025, highlighting Liability Accounts their features, pricing tiers, and plan options. We’ll also share tips on assessing bookkeeping skills and choosing the right service for your needs.