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How to Pick the Best Bookkeeping Service for Your Small Business
Finding the best bookkeeping service for your small business can save you time, reduce stress, and give you the confidence to focus on what you love most: running your business.
As a small business owner, you already know that running a business comes with multiple hats to wear—and bookkeeping might not be your favorite. Numbers, spreadsheets, receipts—it’s not everyone’s cup of tea, and that’s okay. However, accurate bookkeeping is essential for your business’s financial health and growth. Being in the accounting profession, we like to say that good bookkeeping is the foundation of any business venture.
The good news? You don’t have to do it all yourself. Finding the best bookkeeping service for your small business can save you time, reduce stress, and give you the confidence to focus on what you love most: running your business. Let’s take a closer look at how to choose a bookkeeping service that’s perfect for you.
Why Choosing the Right Bookkeeping Service Matters
We’ve said that bookkeeping is the foundation of your business’s success. A good bookkeeper can ensure your financial records are accurate, help you plan for taxes, and give you clear insights into how your business is performing.
But the wrong bookkeeping service? That’s a different story. I’m sure you’ve heard some horror stories of small businesses getting in trouble with the IRS because they had a bookkeeper who wasn’t very good at making sure everything was done correctly. Over the years, I’ve taken on many cases like that, and on top of everything, the business owner had no idea how their business was really doing. It’s no fun to take on cases like that, and sometimes it took several weeks to untangle the mess. That’s why choosing the best bookkeeping service for your small business matters—it can make or break your financial stability.
Step 1 – Identify Your Business’s Bookkeeping Needs
Before you start your search, take a moment to figure out exactly what your business needs.
Evaluate the Complexity of Your Finances
Is your business small and straightforward, with a few monthly transactions? Or do you have employees, inventory, and multiple income streams? Your bookkeeping needs will depend on the complexity of your operations.
Whether you’re a freelance designer or a bakery owner, understanding your needs will help you find the best bookkeeping service for your small business that fits your unique requirements..
Decide Between Specialized and General Services
Some bookkeeping services cater to specific industries, like construction, healthcare, or e-commerce. If you’re in a niche industry, it might sometimes be worth looking for a service that understands your unique challenges. If you’re not in a specialized niche, let’s say you operate a business providing services to the general public, you probably don’t need a specialized bookkeeper. Do you need a bookkeeper to set up your bookkeeping system for your business?
Step 2 – Know Your Budget
Every business has a budget, and bookkeeping services vary widely in cost. Here’s what to consider:
Understand Typical Bookkeeping Costs
- DIY Software: Starting around $15–$50/month, perfect for microbusinesses.
- Remote Bookkeeping Services: Typically $200–$500/month, depending on the scope.
- Local Bookkeeping Firms: Often $500–$1,500/month, offering more personalized service.
ROI of Professional Bookkeeping
While outsourcing might seem like an expense, a business owner should look at it as an investment. A good bookkeeper can help you find tax deductions, avoid costly mistakes, and free up your time to focus on growing your business.
Step 3 – Research Bookkeeping Service Options
Compare Local vs. Online Bookkeeping Services
Local bookkeepers offer face-to-face relationships, which some business owners value. However, online services are often more affordable and use advanced technology to keep your books up to date. Only a few years back, it was common for business owners to prefer a local bookkeeper who was able to come visit the business on a regular basis. With all the advances made in technology coupled with the pandemic, many bookkeepers now work remotely. As a result, local bookkeepers have observed this trend, and they tend to charge more. So ask yourself if your business really needs a local bookkeeper or if you can do with a virtual service.
Look for Certifications and Experience
Always check that the bookkeeper has some sort of credential. In most cases, you don’t need a CPA, and that could be an expensive option in most cases. For bookkeepers there are national accrediting organizations such as:
- Certified Public Bookkeeper (CPB) from the National Association of Certified Public Bookkeepers (NACPB) or
- Certified Bookkeeper (CB) from the American Institute of Professional Bookkeepers (AIPB).
- International Accredited Business Accountant (IABA)
- Other Certifications are:
- Intuit Certified Bookkeeping Professional
- Certified Management Accountant (CMA)
- Entrolled Agent (EA)
- QuickBooks ProAdvisor Professional Certified Professional
If a bookkeeper has any of the certifications above, it shows that they got a thorough education in bookkeeping principles, and had to pass some of test.
It’s recommended that if you want to hire the best bookkeeping service for your small business, you look for a bookkeeper or a bookkeeping service with some type of certification.
However, keep in mind that experience matters a great deal, too—a bookkeeper who has worked with small businesses like yours will better understand your needs. Some bookkeepers are not certified as bookkeepers, but they may have another education certificate like a Master’s in Business Administration. Some of these professionals can also be very skilled.
Read Reviews and Testimonials
To find the best bookkeeping service for your small business, research online reviews on Google, Yelp, and forums, and ask for recommendations from trusted sources. Better yet, ask for recommendations from fellow business owners in your industry. Visit your local Chamber of Commerce or if you belong to a professional association for your business, ask other members for recommendations. Referrals are often the quickest path to find the best bookkeeping service for your small business.
Step 4 – Ask the Right Questions Before Hiring
Key Questions to Evaluate a Service
When interviewing potential bookkeeping services, ask:
- What bookkeeping software do you use? Can it integrate with my systems?
- Do you customize services? Will you tailor your services to fit my specific business needs?
- How do you ensure security? How do you handle sensitive financial data?
- Are there additional fees? What’s included, and what costs extra?
- What’s your turnaround time for monthly reports?
Request a Trial Period or Initial Consultation
Many services offer a free consultation or trial period. When you are searching for the best bookkeeping service for your small business, use this opportunity to see how they communicate and whether they’re a good fit for your business. If you don’t feel that there is good chemistry, don’t be afraid to tell the bookkeeper or bookkeeping service that you do not want to proceed further. If you don’t feel as if they are a good fit even before they start working with you, things are not likely to improve with time.
Step 5 – Look for Scalability
When selecting the best bookkeeping service for your small business, ensure it can adapt to your growth. Your needs today may differ from those in a few years.
As your business grows, your bookkeeping needs will change. Choose a service that can grow with you. For example, you might start with basic services now but need payroll, tax filing, or inventory management in the future. If your bookkeeper does not offer those services, they should be able to refer you to someone who specializes in those services. For example, many bookkeepers refer their business clients to a tax-preparing firm. Also, these days it’s unusual for bookkeepers to do payroll from scratch, If you’re not already using a service such as Gusto, PayChex, QuickBooks Payroll, etc., the bookkeeper can set you up with one of those services and help you get started.
Red Flags to Watch Out For
Even the best bookkeeping service for small business options should be evaluated carefully to avoid red flags such as hidden fees, outdated technology, or poor communication.
Here are some warning signs:
- Hidden Fees: If pricing isn’t transparent, be cautious.
- Poor Communication: Slow responses or vague answers are red flags. If they can’t look you straight in the eyes, that’s usually not a good sign.
- Outdated Technology: A service that doesn’t use modern tools may not keep up with your needs. This is getting less common, as most bookkeepers these days use some sort of cloud software solution. But if your bookkeeping firm uses old desktop solutions or spreadsheets, that’s usually not a good sign.
How to Make the Final Decision
Once you’ve narrowed down your options, review your notes, compare costs, and trust your instincts. A good bookkeeping service will feel like a partner in your business’s success, not just a vendor.
Remember this: Bookkeepers who can record and categorize your income and expenses are a dime a dozen. A bookkeeper who can interpret the numbers and help guide you in your business decisions, that’s something special. That’s the best bookkeeping service for your small business.
Conclusion
Finding the best bookkeeping service for your small business is an investment in your future. The right service will save you time, reduce stress, and give you peace of mind about your finances.
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