Questions
Straight answers to the bookkeeping and accounting questions small business owners ask us.
How much does a bookkeeper cost for a small business?
Small business bookkeeping typically costs $200 to $600 per month for basic services. The actual price depends on transaction volume, industry complexity, and what's included beyond basic reconciliation.
Read answerWhat is the difference between a bookkeeper and an accountant?
Bookkeepers handle ongoing financial recordkeeping like categorizing transactions and reconciling accounts. Accountants analyze that data, prepare taxes, and provide strategic financial advice. Most small businesses need both working together.
Read answerHow often should I update my books?
Monthly is the minimum for most small businesses. Weekly works better for high-volume operations or when you need current numbers for decisions. The key is establishing a consistent rhythm so your financial picture stays useful.
Read answerShould I use cash or accrual accounting for my business?
Most small service businesses do fine with cash basis because it's simpler and matches your bank activity. Accrual gives a more accurate picture of profitability if you have significant receivables or need financial statements for outside parties.
Read answerWhat does a bookkeeper actually do?
A bookkeeper maintains the day-to-day financial records of your business. They categorize transactions, reconcile accounts, manage bills and invoices, and produce monthly financial statements that show how your business is performing.
Read answerWhen should I hire a bookkeeper for my small business?
Hire a bookkeeper when you're spending several hours monthly on bookkeeping, when you can't answer basic questions about profitability, or when tax season becomes a scramble. Most business owners wait until their books are already messy. The better approach is getting help before problems compound.
Read answerCan a bookkeeper help me with taxes?
Most bookkeepers don't file tax returns, but they help with taxes in ways that matter more than the actual filing. Clean books mean accurate deductions, faster tax prep, and records that survive an audit.
Read answerWhat records should I keep for my small business?
Keep financial records like bank statements, receipts, and invoices for at least seven years. You'll also need tax returns, business formation documents, contracts, and employee records if you have staff.
Read answerHow do I know if my books are accurate?
Start with bank reconciliation. If your accounts match your statements to the penny, that's the foundation. Then check that balance sheet accounts reflect reality and your profit numbers match how the business actually performed.
Read answerWhat is bank reconciliation and why does it matter?
Bank reconciliation matches your accounting records to your bank statement to confirm they agree. It catches errors, detects fraud, and ensures your financial reports reflect reality. Without it, you don't actually know how much money you have.
Read answerHow long should I keep my business financial records?
Keep most business financial records for seven years. This covers IRS audit periods and California state requirements. Some documents like formation papers and major asset records should be kept permanently.
Read answerWhat is the chart of accounts and how do I set one up?
A chart of accounts is the list of categories where your business transactions get recorded. Most accounting software includes a template based on your industry, so you customize that rather than building from scratch.
Read answerWhat is accounts payable vs accounts receivable?
Accounts receivable is money customers owe you. Accounts payable is money you owe vendors. Both show up on your balance sheet and directly impact your cash flow.
Read answerHow do I track business expenses properly?
Separate business and personal finances completely, record expenses promptly with the right category, and save receipts digitally. Reconcile your accounts weekly to catch mistakes while you still remember what happened.
Read answerWhat financial reports should I review monthly?
Every business should review the profit and loss statement, balance sheet, and cash flow statement monthly. Adding accounts receivable and payable aging reports helps you spot collection issues and plan for upcoming bills.
Read answerHow do I separate business and personal expenses?
Open a dedicated business bank account and use it exclusively for business transactions. Add a business credit card, pay yourself intentionally, and keep personal spending completely out of business accounts.
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