6 Best Online Bookkeeping Services for Small Businesses
Tired of feeling disorganized around tax time? Or feel like you might be spending too much time on finance-related tasks?
Scrambling at the last second to gather documents for tax season is stressful, and rushing bookkeeping-related tasks can make you vulnerable to compliance issues and missed growth opportunities. Thankfully, online bookkeeping services have lowered the financial barrier of getting bookkeeping and tax-related help.
So, if you’re looking for bookkeeping help, this guide will introduce you to what exactly online bookkeeping services offer, the best six solutions for small businesses, and what to consider when choosing the best solution for you.
Here’s What We’ll Cover:
What Are Online Bookkeeping Services?
Online bookkeeping services typically give you a dedicated bookkeeper or team of financial experts to help you with basic bookkeeping tasks. A bookkeeper’s main responsibility is maintaining accurate financial records.
Bookkeeping is an unavoidable part of having a business because the IRS has certain rules around financial recordkeeping. Aside from staying compliant, having organized books helps you monitor the health of your business, prepare for tax time, and prepare key financial statements.
Save Money With Online Bookkeeping Services
Online bookkeeping services, also called virtual bookkeeping services, are a very affordable alternative to the traditional employee bookkeeper. To put this in perspective, a bookkeeper’s average salary is $44,527. On the other hand, most online bookkeeping services start at the $200-$400 per month range, with more advanced solutions in the $600-$800 range still being significantly cheaper than hiring a bookkeeping employee.
What to Expect From Bookkeeping Services
Every online bookkeeping service will offer a mixture of different features ranging from basic to advanced. As a result, a suite of features from one service will appeal more to very small businesses, while an entirely other set of features from another service might appeal to larger small businesses. That’s why there’s no standard one-size-fits-all solution.
Some of the common features to expect from an online bookkeeping service include:
- Payroll services
- Uses popular accounting software such as FreshBooks
- Dedicated virtual bookkeepers
- Monthly reconciliation of bank statements
- Account receivables and account payables
- Keep books balanced
- Quarterly and monthly reporting
- Tax services
- Billing and invoicing
- Track finances
- Data entry
- Software training
Best Online Bookkeeping Services for Small Businesses
The solutions on our list start as low as $190 a month for basic bookkeeping help to around $350+ for more comprehensive solutions. Let’s review all six online services:
- Merritt Bookkeeping
Bench is a popular small business choice because it’s an affordable bookkeeping service with an intuitive, easy-to-use platform. Bench gives you at-a-glance visual reports, which provides you with actionable insight that’ll help grow your business. Another bonus is that you get to communicate with your bookkeeping team via chat easily. In addition, Bench has raving online reviews and has many integration options.
A downside of Bench is that it specializes in cash-basis accounting, although there is a custom accrual accounting plan on the Pro plan.
- Monthly financial statements
- Powerful financial reporting
- Tax filings and tax preparation if you’re a sole-proprietor. Tax filing services are available as add-on services if you’re not a sole-proprietor
- One-on-one support with an assigned professional bookkeeper and tax expert
- Bookkeeper organizes business transactions.
- Connect with most payroll platforms on the Flex and Pro plan. If you’re on the Core plan, you can only connect to Gusto.
- Connects with most major payment processors on the Flex and Pro plan. If you’re on the Core plan, you can still connect with FreshBooks, PayPal, Stripe, and a few others.
- Backed up on your books? Get historical bookkeeping as an optional add-on. You can use this feature even if you’re years behind.
- Real-time accounting when you use LendingClub.
- Connect to non-LendingClub bank accounts, credit cards, and debit cards with the Flex and Pro plan.
- Year-End Financial Package which includes a Profit & Loss Statement, Balance Sheet, Trial Balance, Journal Entry Summary, and General Ledger
- Mobile app on the go
- Core: $299/ month or $249/month if you commit to a year
- Flex: $399/month or $349/month if you commit to a year
- Pro: $599/month or $479/month if you commit to a year
Bench offers a free trial for each plan that includes one prior month of bookkeeping, and whether you choose to continue using Bench or not, you get to keep the income statement and balance sheet for that month.
Bookkeeper is one of the pricier business bookkeeping services on our list, but it comes with many possible add-on services. If you’re looking for a bookkeeping solution you can stick with for the long run, Bookkeeper has most bookkeeping features you could possibly want as an add-on. Possible add-ons include payroll services, individual and business tax returns, and financial performance reporting with key performance indicators.
- Dedicated bookkeeper and dedicated account manager
- Monthly bank reconciliation
- Monthly statements, including the statement of cash flows
- Cash and accrual accounting
- Unlimited support on the Small Business Plus plan and above. Limited support on the Small Business plan.
- 30 minute-monthly scheduled meeting on the Small Business Plus plan and 45-minutes on the Small Business Advanced Plan. Custom on the Custom Plan.
- Lite Virtual Chief Financial Officer services on the Small Business Plus plan and above.
- Historical bookkeeping add-on
- Small Business: $449/month up to 100 transactions per month
- Small Business Plus: $649/month up to 200 transactions per month
- Small Business Advanced: $849/month up to 300 transactions per month
- Custom pricing
Sunrise, by Lendio, used to be called Billy until it was acquired. It’s known for its easy-to-use interface and its simplification of accounting jargon. Sunrise is a good solution for sole proprietors and freelancers without employees, and it’s good for invoicing customers, income and expense tracking, and basic reporting capabilities.
However, if you want more advanced reporting and a more robust mobile experience, you’re better off looking at other solutions on this list. Billy/Sunrise also got some bad rep for its choices regarding customer loyalty when it was acquired.
- Monthly financial statements
- Monthly financial reporting
- Personal bookkeeper
- One-on-one support
- Expense tracking
- Bank reconciliation
- Access to tools to simplify tax preparation for your annual filing
- Early plan: $149 up to 120 monthly transactions
- Growing plan: $299/month up to 200 monthly transactions
- Corporate plan: $499/month up to 500 monthly transactions
Pilot offers a large set of basic bookkeeping services and features, including access to a chart of account and financial reports, but many services and features are only available as add-on services or only through the custom plan. For businesses with over $200,000 of monthly expenses, this might offer the type of customization you’d need. Some additional services you may have access to include inventory tracking, BillPay, CFO services, and tax services.
A downside of Pilot is that a main way to communicate with finance experts is via email, which can make it harder to get quick replies. They are available through the phone in most circumstances, though. You also can’t pay on a month-to-month basis, unlike a few others on our list.
- Dedicated finance expert on all plans
- Accrual basis bookkeeping
- Financial statements
- Automatic transactions import
- Payroll and balance sheet reconciliation
- Burn rate calculations
On the Core plan and above, you get:
- Expedited books delivery
- Monthly phone reviews
- Priority support
- Core: $599-$899 per month with annual billing
- Select: $849-$1149 per month with annual billing
- Plus: Custom
For the core and select plan, prices increase gradually as a business’s monthly expenses increase. Businesses with over $200,000 in monthly expenses will need a custom plan. The following transactions are included in total expenses: payroll, COGS, and distributions.
Merritt Bookkeeping has the most competitive pricing on our list and is the only one to offer a flat rate for all types of businesses. Unfortunately, if flexibility is what you’re looking for, Merritt Bookkeeping may not be for you since you can only import data from QuickBooks Online. If you’re looking for something very cheap and simple and your business is in its very early stages, the affordability of Merritt Bookkeeping makes it a good choice.
- Historical bookkeeping add-on to make your books current
- Issues 1099s
- Automatic bank statement retrieval
- Easy-to-use interface
- Monthly financial report
- Only connects with QuickBooks
- Flat rate of $190/month
- 90-day money-back guarantee
InDinero is known for being a scalable bookkeeping solution, so if the ability to stay with one service as you grow is important for you, then InDinero would be one of the services to consider along with Bench.
Although InDinero offers scalable plans, they’re not very transparent about what exactly they include in each plan until you talk to a salesperson. Unfortunately, InDinero doesn’t have many integration options, but if you already use the software they integrate with, it’s a very robust solution.
- Dedicated accounting team
- On the Essential plan, you have access to cash-basis accounting.
- On the Growth plan, controllers manage accrual-based accounting for you.
The following features are customized to your needs after talking to a salesperson:
- Monthly reconciliation of bank statements
- Payroll support
- Monthly financial statements
- Accounts receivable/ Accounts payable processing and reporting
- Employee reimbursements
- Cash flow statement and forecast
- Revenue recognition
- Some inventory management*
- Essential: Starting at $300/month
- Growth: Starting at $900/month
- Executive: Custom
InDinero offers monthly, quarterly, and annual pricing but differs from the rest on our list because you have to talk to a salesperson to get an actual price.
Spend More Time on Your Main Business
When a business is first growing, it’s possible to do bookkeeping-related tasks yourself to save money. As your business grows, you’ll have to start tracking how much time you’re spending doing bookkeeping-related tasks. If most online bookkeeping services cost between $200-$400 a month, is it possible for you to make that money back with the number of hours you’re investing in bookkeeping-related tasks?
This isn’t even accounting for the shortcuts that busy business owners take. Could you be losing out on possible tax deductions? Do you have the time to ensure you’re doing everything right? Some portions of bookkeeping require a good understanding of tax laws, such as payroll laws. And making innocent mistakes can be costly.
How often are you looking at your total current income and total current expenses? If it’s only once a year, you’re not alone. Leveraging bookkeeping services allows you to look at your income and expenses in real-time frequently. Having access to robust reports and financial data allows you to make better decisions for your business leading to an increased ROI from investing in online bookkeeping services.
How to Choose Your Online Bookkeeping Service:
Here are some questions to ask yourself as you decide on the best solution for your small business:
- What features and services do you value most?
- What’s your budget?
- Do you want a scalable solution, or are you just happy choosing the best solution for this specific stage of your business?
- Are you willing to pay for more support but less features and services?
- Or more features and services but less support?
- How many monthly transactions does your business have? Will that increase significantly by the end of the week?
- Do you need to be caught up? Are you months or years behind on your books?
- What are the totals of your monthly expenses?
It’s common for business owners of growing businesses to attempt bookkeeping on their own, but it's easy for bookkeeping to be an afterthought until tax time approaches.
However, leaving taxes to the last second causes businesses to lose out on opportunities that come with frequent expense and revenue tracking, accurate balance sheets, financial reports, and much more. Choosing the right online bookkeeping service for your small business will also free up time for you to focus on your main business and ease a lot of stress.
If you’re using FreshBooks accounting software, a solid overall pick for most small businesses is Bench and it seamlessly integrates with FreshBooks.
Find out more about how Bench integrates with FreshBooks and try their free month trial.
More Resources on Small Business Accounting
- How to Choose the Best Accounting Software for Your Small Business?
- How to Organize a Business in 5 Steps