What you are actually buying
Bookkeeping is the monthly work of recording what happened in your business and checking that the record agrees with your bank. A good service gives you statements you can rely on without re-checking them yourself.
That is different from software, which only stores transactions. It is also different from tax preparation, which uses the books but happens once a year. Keep the three apart when you read quotes, because many proposals blur them.
What a monthly service should deliver
At a minimum, each month you should receive a profit and loss statement and a balance sheet, with every bank, card, and payment processor account reconciled to its statement. Loans, payroll liabilities, and sales tax should agree to their source reports. Unusual items should come back to you as questions instead of landing in a catch-all category.
- Transactions categorized consistently, with a chart of accounts that fits your business.
- Reconciliations for every account that holds money or a balance.
- Receivables and payables that match invoices and bills.
- Payroll entries that agree with the payroll provider's reports.
- A list of open questions, with the document or answer needed to close each one.
- Statements delivered by a stated date each month.
Cash or accrual
A service should ask which accounting method you use before it starts. Cash basis records income and expenses when money moves, which is simpler and common for small operating businesses. Accrual basis records them when they are earned or incurred, and it is what lenders, investors, and any company with inventory or prepaid contracts will usually expect.
If you might raise money or borrow in the next year or two, start on accrual. Converting later means restating history.
Where quotes hide the difference
Two quotes can both say monthly bookkeeping and cover very different work. Ask each provider what a month includes in terms of accounts, transactions, and review.
Cleanup is the biggest swing. If your books are several months behind, or earlier months were never reconciled, a catch-up project is a separate piece of work. Get it priced on its own, with a defined end date.
Also ask whether payroll accounting, sales tax tracking, invoicing, and bill pay are included. Providers that scale price by transaction count or monthly spend will tell you where the next price tier starts. Ask in advance, since a good month can push you over it.
Tools and access
You should be able to see your books at any time. Ask which accounting software the service uses, who owns the subscription, and whether you will have administrator access. If the answer is that the service uses its own system and you only receive PDFs, think about what happens if you part ways.
Also ask how documents reach them. A secure upload or a connected feed beats forwarding statements by email.
How the right service shifts by business
A consulting or services business needs clean invoicing and receivables follow-up. An online store needs payout reconciliation that separates sales, fees, refunds, and sales tax collected. A subscription business needs deferred revenue handled properly. A contractor needs costs tied to jobs. A startup that has raised money needs accrual books and a tidy equity record.
Ask the provider to describe how it handles your version of the problem. A provider that has done it before answers with specifics.
Before you sign
Ask for a sample month of deliverables with client details removed. Ask who reviews the work and how often a person other than the preparer looks at the balance sheet. Confirm the notice period for ending the service and how your records are returned.
When the proposals are in, line them up against your list of jobs: included, add-on, you keep it, or not offered. The one that leaves the fewest recurring jobs unclear is usually the better fit.
A note on bias
Institution provides monthly bookkeeping, so take our view of this market with that in mind. Hold us to the same checklist.
Frequently asked questions
What should I have ready before I hire a bookkeeper?
Have bank and card statements for the period, access to payment processors and payroll reports, your prior tax return, loan agreements, and a list of what you sell and how you are paid. Having them ready shortens onboarding and lowers cleanup cost.
How often should books be reconciled?
Every month at a minimum, against the statement for that month. Businesses with high transaction volume often review more often, but a monthly reconciliation is the standard that makes tax preparation and financial reporting reliable.
Can I keep my own books and still use a service?
Yes. Many owners keep day-to-day entries and hire a service to reconcile and review each month. Agree up front who owns which tasks so work is not done twice.