What Is Small Business Bookkeeping?
Bookkeeping is the backbone of every small business’s financial health – but it’s often overlooked or misunderstood by busy business owners. Whether you’re just starting out or already up and running, understanding what bookkeeping is (and isn’t) is critical for long-term success.
This guide explains the basics of small business bookkeeping, what tasks are involved, and how outsourcing your books can save time and money.
What Is Bookkeeping?
Bookkeeping is the process of recording, organizing, and managing the financial transactions of a business. It ensures that every dollar coming in and going out is tracked correctly so you can:
- Monitor your cash flow
- Prepare for tax filing
- Generate financial reports
- Make informed decisions
Unlike accounting, which involves analysis and planning, bookkeeping is focused on the day-to-day financial details.
Key Tasks in Small Business Bookkeeping
- Recording Transactions
Every sale, purchase, deposit, and withdrawal must be logged accurately and categorized. - Reconciling Bank Accounts
Ensuring that your books match your bank and credit card statements every month. - Managing Invoices and Bills
Sending invoices, tracking receivables, and paying bills on time. - Handling Payroll
Recording wages, managing tax withholdings, and issuing payroll reports. - Tracking Expenses and Income
Categorizing transactions so you can analyze profits and losses by product, customer, or department. - Preparing Financial Reports
Generating monthly or quarterly Profit & Loss (P&L), Balance Sheets, and Cash Flow Statements. - Organizing Tax Documents
Keeping your books organized year-round ensures you’re ready when tax season arrives.
All of these services are typically included in our monthly bookkeeping plans, starting at just $150/month.
Why Bookkeeping Matters for Small Businesses
- Legal Compliance: Proper books help you file taxes correctly and avoid penalties.
- Funding and Loans: Lenders and investors require clean financial statements.
- Business Insights: Know which products or services are most profitable.
- Cash Flow Management: Identify cash shortages before they happen.
- Scalability: Clean books make it easier to hire, expand, or sell your business.
Bookkeeping Methods for Small Businesses
1. Single-Entry Bookkeeping
Each transaction is recorded once – either as income or expense. It’s simple but not suitable for growing or incorporated businesses.
2. Double-Entry Bookkeeping
Each transaction is recorded twice: as a debit and credit. This method ensures your books always balance and is required for accurate financial statements.
Most businesses eventually transition to double-entry, especially if they use software like QuickBooks or Xero.
DIY vs. Outsourced Bookkeeping
DIY Bookkeeping
Pros:
- Low cost (initially)
- Full control
Cons:
- Time-consuming
- Prone to errors
- Limited reporting unless using advanced software
Outsourced Bookkeeping
Pros:
- Saves time
- Expert-level accuracy
- Monthly reporting and CPA-ready books
- Scalable pricing
RemoteBooksOnline offers outsourced bookkeeping with flat monthly rates, no contracts, and full QuickBooks or Xero integration.
Test Case: Café Owner Replaces Spreadsheets with Full-Service Bookkeeping
Business: Coffee shop with four employees and weekly vendor deliveries
Problem: Owner tracked everything in Excel – but reconciling accounts took hours and tax time was stressful.
Solution: Signed up for RemoteBooksOnline’s monthly service.
Results:
- Books migrated to QuickBooks
- Vendor payments and payroll tracked automatically
- Monthly reports simplified cash flow forecasting
- Owner saved 15+ hours per month and never missed a tax deadline again
Frequently Asked Questions
How often should bookkeeping be done?
Monthly bookkeeping is ideal for most small businesses. Waiting longer increases errors and makes tax prep harder.
Can I use Excel for bookkeeping?
You can, but software like QuickBooks or Xero is more accurate and efficient – and required if you work with a bookkeeper.
Do I need a CPA and a bookkeeper?
Bookkeepers handle daily financial tracking. CPAs help with strategy and taxes. Most small businesses use both – especially during tax season.
Is outsourcing secure?
Yes, if you choose a reputable provider. At RemoteBooksOnline, we use encrypted portals and bank-level security.
What happens if my books are behind?
You can catch up using QuickBooks cleanup and catch-up services. We specialize in handling backlogged books quickly and accurately.
Get Bookkeeping Off Your Plate – and Done Right
Bookkeeping doesn’t need to be a burden. At RemoteBooksOnline, we help small businesses stay compliant, organized, and focused on what matters: growth. With flat pricing and expert support, it’s the easiest way to take control of your finances.
Explore our bookkeeping services or start a free trial today.
