Bookkeeping for Small Businesses

Every business needs bookkeeping to stay organized. Get your business finances organized with free software trials.

Every type of business has need for some level of bookkeeping process in 2021. Transactions occur and supplies are needed whether your business is non-profit or for-profit. Routine expenses for cleaning, repair & technical services are also paid for. Knowing how much money is flowing in and out each day is a vital part of running an effective business.

Bookkeeping services have a beneficial impact on tax preparation and the future growth of your business. Online, cloud-based and free bookkeeping services are all available to help manage your business properly. Read ahead for important information about bookkeeping for small businesses and how to find the best services for your needs today.

Importance of Bookkeeping for Small Businesses

The importance of bookkeeping for small businesses cannot be overstated in modern times. Do you know exactly how much profit your company turned on its last service and/or transaction? Are you aware of exactly how much your expenses are for each month, week and day? Top 2021 bookkeeping services are available to help manage your important business information now.

Who Benefits?

Benefits of bookkeeping for small businesses reach beyond your business itself. Customers and clients benefit from a more organized and streamlined experience. Any partners you have or other businesses/organizations involved in your operation also benefit from your efficiency and timeliness. Of course, you and the bottom line for your business also experience multiple benefits from using bookkeeping software. Awareness of all levels of your company finances, including expense accounts, petty cash accounts payable/receivable, payroll and more helps you make better financial decisions on a daily basis.

Tax Purposes

Business taxes are complicated. Utilizing a bookkeeping service for your small business helps you keep accurate records for tax filing purposes. Bookkeeping services also benefit the tax process by preparing you in advance for any deductions, refunds or taxes owed.

Future Growth

Businesses expand in predictable and unpredictable ways. A daily accounting of your gains and expenses helps you make real-time informed decisions about how to improve operations in the future. When your business grows, so too will the number of transactions, expenses and overall financial records in your books. Small business bookkeeping services inform and prepare you financially for expansion by preventing unexpected expenses and providing the tools you need to grow your business effectively.

Possible Loans Your Business Might Need

Earning money by running a business sometimes initially requires borrowing money to make it happen. Investor and/or venture startup, expansion or working capital money is sometimes needed to grow your business as well. Small business loans guaranteed by the U.S. Small Business Administration (SBA) helps you find lenders matching your financial needs fast. How do bookkeeping services help your business with possible loans it might need? Business plans, expenses sheets, profit & loss (P&L) statements are all made conveniently available using bookkeeping services today.

Average Costs

Average costs of bookkeeping services in 2021 vary based on multiple factors. The type of business you run, the number of users running the system and the type of bookkeeping service itself all impact pricing. Hiring an outsourced bookkeeper might cost between approximately $500 to $2,500/mo. Part-time bookkeepers might cost approximately $400 to 800/mo and full-time bookkeepers between approximately $3,000 and $4,500/mo. The cost of perpetual (lifetime) licenses for professional bookkeeping softwares ranges between approximately $500 and $5,000 total depending on the number of users, however. Some monthly software subscriptions range as low as between $9 and $60/mo, while others cost between approximately $1,000 and $1,800/mo. Either way you look at it, purchasing small business bookkeeping software saves you money.

Online Software for Bookkeeping

Many companies offer top-tier online software for bookkeeping in 2021. Each one is purposed to help manage your business finances, while also having varied unique features and price points. For example, FreshBooks offers monthly and annual pricing starting at $7.50/mo for five billable clients. Features include the ability to track unlimited expenses, send unlimited estimates, track sales tax and more. FreshBooks is also compatible with iOS and Android devices. Additional top online software for bookkeeping (along with prices/features) include:

Intuit QuickBooks Online (starting $12.50/mo for 1 user; cash management; unlimited invoices; unlimited payment acceptance; 1099 contractor compatible),
AccountEdge Pro (starting $399 perpetual w/free 30-day trial; banking; time billing; e-commerce; check printing; inventory tracking).
Xero (plans start $11/mo; specializes in small/growing businesses; transactions viewable from any location; online bill pay; mobile review of personal expenses; transactions automatically imported/coded).

Cloud Services for Bookkeeping

Cloud services for bookkeeping eliminate the need for storage space in your business computers. Cloud-based bookkeeping programs also provide instant access to your data and simplify the entire process. Some of the top cloud services for bookkeeping in 2021 include:

FloQast (pricing via private quote; HR management integration; payroll/ERP solutions; collaborations; automation; integration w/accounting systems such as Oracle NetSuite, Dropbox & more).
Sage 50Cloud Accounting (monthly pricing from $56.08/mo per user; instant bill pay; smart integration with Microsoft 365; job costing by phase/cost level).
FreeAgent (starts $10/mo for 6months then increases to $20/mo; free 30-day trial; award-winning customer support; all features/services unlimited; estimates; invoices; banking).

Free Online Bookkeeping Services

Wave Accounting is one of the top free online bookkeeping services available in 2021. Specialized for entrepreneurs, Wave Accounting includes unlimited income/expense tracking, unlimited partner/collaborator additions and financial statement generation. Credit card payment processing and payroll services are charged in per-use percentages and monthly subscription fees (plus surcharges) respectively. Additional free online bookkeeping services include: