The Complete Guide to Choosing the Best Bookkeeping Service for Your Online Business

As an online business owner, keeping your books in order is a crucial but often dreaded task. The hours spent reconciling transactions, issuing invoices, and preparing financial statements add up quickly. Should you just buckle down and do it yourself? Or is outsourcing your bookkeeping worth the cost?

With the right bookkeeping service, you can optimize efficiency, compliance, and insights to make smarter financial decisions. But wading through all the options can be overwhelming.

In this comprehensive guide, we‘ll cover:

• Key bookkeeping challenges facing online businesses
• Factors to consider when choosing a service
• In-depth reviews of the top 6 bookkeeping services
• Tips for maximizing your chosen bookkeeping solution
• Answers to frequently asked questions

After 15 years helping online businesses successfully outsource their bookkeeping, I‘ll share my expertise and experiences to help you find your perfect fit based on your needs and budget.

Let‘s dive in!

The Bookkeeping Headache Plaguing Online Businesses

First, let‘s look at just how big of a pain point bookkeeping is for today‘s digital businesses:

• 80% of small business owners say bookkeeping and taxes are their biggest headache.

• The average small business owner spends 6-10 hours per week on bookkeeping activities.

• 47% of small businesses have been fined for bookkeeping mistakes with penalties averaging $845.

Why does bookkeeping demand so much time and attention? Key responsibilities include:

• Recording daily income and expenses
• Paying bills
• Reconciling bank and credit card accounts
• Tracking accounts receivable/payable
• Creating and sending invoices
• Processing payroll
• Preparing financial statements
• Managing taxes

Maintaining accurate books is mandatory for the IRS and crucial for cash flow monitoring, strategic planning, securing financing, and driving growth. But it‘s a specialized skillset most entrepreneurs don‘t have.

Common pain points include:

• Excessive time spent on bookkeeping every month
• Confusion navigating bookkeeping software
• Inability to analyze financial data for insights
• Fear of mistakes leading to IRS penalties
• Paying unnecessary taxes
• Recreating reports for stakeholders

Rather than letting bookkeeping drag you down, outsourcing to a bookkeeping service can provide relief. Next let‘s explore key factors to evaluate when choosing your solution.

How to Select the Right Bookkeeping Service for Your Online Business

Features

Consider which bookkeeping features are essential versus nice-to-have bonuses:

Core features:

• Bank/CC reconciliation
• Expense tracking
• Invoicing
• Payroll
• Financial statements

Bonus features:

• Bill pay
• Mileage tracking
• CFO consulting
• Tax filing
• Budgeting tools

Software Integrations

Select a service that integrates seamlessly with your existing accounting systems:

• QuickBooks Online
• Xero
• FreshBooks
• Zoho Books
• Sage Intacct

Avoid data silos and manual exports. The right integration provides a single source of truth.

Qualifications

For accurate books you can rely on, look for:

• Certified bookkeepers on staff
• CPAs overseeing processes
• Accounting compliance guarantees

Expertise matters when entrusting your finances.

Pricing Model

Bookkeeping pricing depends on your needs and preferences:

Pricing Model	Pros	Cons
Flat monthly fee	Predictable spending	Caps number of transactions
Tiered monthly fee	Scales with your growth	More complex pricing
Per transaction fee	Pay only for what you use	Unpredictable costs

Understand what drives the different pricing models to control costs.

Ease of Use

Minimal training and quick mastery means you‘ll actually use the system. Seek services with:

• Intuitive dashboards
• Simple workflows
• Excellent support

Now let‘s dive into detailed reviews of my top picks across different categories to help you find the best match.

Reviews of the Top Bookkeeping Services for Online Businesses

Best Full Service Option: Bookkeeper.com

For end-to-end bookkeeping and accounting, Bookkeeper.com is my top choice. Their CPAs and QuickBooks experts entirely manage your books so you can focus on your business.

I recommend Bookkeeper.com for service businesses, online retailers, or companies with over $500k in revenue that want a turnkey bookkeeping solution.

Pricing

$275+ per month starting fee. Tiers based on number of transactions.

Top features

• QuickBooks Online setup and management
• Bank/CC reconciliation
• Unlimited users
• Bill payment automation
• Invoicing and collections tracking
• Payroll processing
• Financial statements and cash flow reports
• Dedicated account manager

Ideal for

• Service companies
• Online retailers
• Businesses with 5+ employees
• Companies who want hands-off bookkeeping

Key benefits

• Seamless QuickBooks integration
• Bill payment automation
• AR/AP management
• Dedicated account manager

Potential drawbacks

• Requires 3+ month commitment
• More accounts and transactions raise fees

With end-to-end services, unlimited users, and dedicated account management, Bookkeeper.com earns its spot as my choice for the best full service bookkeeping solution.

Most User Friendly: InDinero

InDinero‘s web and mobile platforms make bookkeeping incredibly simple for non-accounting types. If you want easy to use software with automated reconciliation and reporting, InDinero is ideal.

I suggest InDinero for high-growth startups and SMBs who want real-time visibility and mobile access.

Pricing

$310+ per month annual plans based on number of integrated accounts

Top features

• Automated bank/CC reconciliation
• Mobile apps
• Drag-and-drop financial reporting
• Bill pay
• Expense tracking
• Tax planning tools
• Payroll
• CFO-level analytics

Ideal for

• Startups raising venture capital
• High-growth small businesses
• Entrepreneurs who dislike bookkeeping

Key benefits

• User-friendly interface
• Anywhere mobile access
• Automated categorization
• Advanced insights and analytics

Potential drawbacks

• Potentially higher monthly fees
• Steeper learning curve for core platform

With category automating reconciliation, swipeable reports, and predictive analytics, InDinero earns its reputation for being the most user friendly full-service bookkeeping solution.

Best for Accounting DIYers: QuickBooks Online

For entrepreneurs who want control over their books, QuickBooks Online provides user-friendly accounting software at a reasonable price.

I recommend QuickBooks Online for solopreneurs or very small teams ready to do their own bookkeeping with software.

Pricing

$25-150 per month depending on plan features

Top features

• Bank imports and reconciliation
• Invoicing and expense tracking
• Mobile apps
• Reports and dashboards
• Add-on payroll service
• Live support 7 days a week

Ideal for

• Solopreneneurs
• Very small teams
• Bootstrapped startups
• Businesses with simple books

Key benefits

• Wide range of features
• Scales from simple to sophisticated
• Mobile access
• Intuitive interface

Potential drawbacks

• DIY focus
• Limited automated reconciliation
• Must add payroll separately

For growing businesses who want to manage their own bookkeeping, QuickBooks Online provides a feature-packed solution at a reasonable price.

Most Affordable: Merritt Bookkeeping

If you‘re looking for basic bookkeeping at a low monthly cost, Merritt Bookkeeping is one of the most affordable services.

I suggest Merritt Bookkeeping for solopreneurs who need the bookkeeping fundamentals without the frills.

Pricing

$150 per month flat rate

Top features

• QuickBooks Online setup
• Transaction coding
• Bank/CC reconciliation
• Profit and loss statements
• Balance sheets
• Unlimited monthly transactions

Ideal for

• Solopreneurs
• Very small businesses
• Bootstrapped startups
• Nonprofits

Key benefits

• Low flat monthly fee
• Easy to understand pricing
• Focuses just on bookkeeping
• Free services for nonprofits

Potential drawbacks

• No bill pay, invoicing, or payroll
• Asked to sign 1 year agreement
• Very limited support

If you just need accurate, compliant bookkeeping at a low price, Merritt Bookkeeping is my top pick for budget-friendly services.

Best Human-Assisted: Pilot

Pilot combines the power of bookkeeping software with on-demand human accountants. If you want DIY simplicity with expert support, Pilot is a great choice.

I recommend Pilot for bootstrapped startups who want to automate their books while retaining access to advisors.

Pricing

$15 per month + $150 per hour for dedicated accountant time

Top features

• User-friendly web and mobile apps
• Bank imports and reconciliation
• Drag-and-drop financial reporting
• Ask a Pilot on-demand accountant support
• Schedule Zoom calls with advisors
• Integrates with accounting systems

Ideal for

• Early-stage startups
• Bootstrapped small businesses
• Entrepreneurs new to bookkeeping

Key benefits

• Affordable flat monthly fee
• On-demand human accounting support
• Easy to use interface
• Integrates with top accounting software

Potential drawbacks

• DIY bookkeeping can be challenging
• Accountant hourly fees add up
• Limited bill pay features

With its unique mix of user-friendly software plus on-call financial experts, Pilot earns its position as the top human-assisted bookkeeping solution.

Most Scalable: ScaleFactor

Designed for rapidly growing businesses, ScaleFactor automates complex bookkeeping processes while providing real-time visibility and insights.

I recommend ScaleFactor for VC-backed startups expected to scale quickly.

Pricing

Custom monthly fees based on number of entities, users, and transaction volume. Around $1,000 per month to start.

Top Features

• Daily automated reconciliation
• Real-time reporting and dashboards
• Bill pay
• Expense management
• Invoicing and AR tracking
• Payroll
• AI-Driven analytics

Ideal For

• VC-backed startups
• High-growth ecommerce companies
• Businesses scaling to $10M+ in revenue

Key Benefits

• Handles intricate entity structures and books
• Scales to support rapid growth
• Real-time financial data and trends
• Predictive analytics and insights

Potential Drawbacks

• Higher minimum monthly fees
• Can feel overwhelming at first
• Mostly targets funded startups

For venture-backed startups expected to scale quickly, ScaleFactor is my top recommendation for a bookkeeping service that can grow with your business.

Tips for Choosing and Implementing a Bookkeeping Service

Take advantage of free trials and demos

Don‘t settle on a bookkeeping service without thoroughly test driving it first. Sign up for an onboarding call, consultations, free trial, or demo and come armed with questions. Get hands-on and access sample reports to determine if the platform and team will truly meet your needs before committing.

Compare pricing tiers

Many services offer multiple packages or pricing tiers based on number of users, accounts connected, and transaction volume. Model out your anticipated usage and compare costs across services to find the optimal balance of features and affordability. Here‘s a glance at pricing across 4 top providers:

Integrate with your other systems

To prevent data silos and eliminate duplicate data entry, ensure your bookkeeping service integrates smoothly with any other systems you rely on for:

• POS and sales
• Payroll
• Billing and invoicing
• Expense management
• CRM and project management

Clean up your existing books

Take time before onboarding with a new bookkeeping service to organize past books and records. Eliminate old unused accounts, reconcile lingering discrepancies, and file away any loose paperwork so you have a clean slate.

Meet regularly to stay aligned

Schedule monthly, quarterly or annual check-ins to review reports, discuss pain points, and align on workflow optimization. Frequent communication ensures you maximize value from your bookkeeping service.

Frequently Asked Questions About Bookkeeping Services

What does a bookkeeping service NOT handle that an accountant would?

Bookkeepers primarily record day-to-day transactions, reconcile accounts, prepare statements, and ensure compliance. Accountants offer higher level services like audits, tax prep, strategic planning, growth advising, and virtual CFO guidance.

How should I notify clients and vendors about a new bookkeeping service?

Send emails introducing your new bookkeeping service contacts and providing instructions for submitting invoices or making payments going forward. Update websites, contracts, and other materials with new payment address and accounting email.

What are signs it may be time to switch from DIY to outsourced bookkeeping?

Frequent bookkeeping mistakes, perpetual backlogs, lack of insights from financial data, and hours spent tackling books every week signal it‘s time to hand off to experts.

Is it difficult to switch bookkeeping services? How long does onboarding take?

With the right service, switching is straightforward since they‘ll handle transferring data and systems access. Expect 2-4 weeks of onboarding to integrate accounts and review processes before going live.

What questions should I ask during an initial consultation?

• What‘s your onboarding process?
• How do you ensure accuracy?
• What differentiates you from competitors?
• Can I see a sample dashboard and reports?
• How can I get support after hours?
• Is tax filing included?

Take Control of Your Books and Fuel Your Business Growth

With this comprehensive guide, you have the key considerations, leading providers, and expert advice needed to confidently choose the right bookkeeping service for your online business.

The hours and headaches bookkeeping causes detract from focusing on your customers and core operations. Outsourcing to the right service provides stress-free compliance, actionable insights, and frees you to drive growth.

I hope mapping the bookkeeping landscape equips you to:

• Find the optimal mix of features, price, and experience for your needs
• Seamlessly integrate new systems and workflows
• Develop a strong partnership with your bookkeeping team

Doing bookkeeping well is rarely the primary passion for an entrepreneur. That‘s why having the right experts in your corner can make all the difference.

Now leveraging my 15 years of experience operating online businesses, I‘m happy to answer any other questions about outsourcing your bookkeeping or putting systems in place to manage finances smoothly. Reach out any time!