Running a business means wearing many hats. But as you scale, managing your finances manually can quickly become overwhelming especially when tax season rolls around. That’s where bookkeeping services come in. They take the weight off your shoulders, helping you stay organized and financially healthy, so you can focus on what matters most: growing your business.
In this guide, we’ll walk you through what bookkeeping services typically include, how they differ from accounting, who to hire first, and what you can expect to pay.
What Does a Bookkeeping Service Actually Include?
Bookkeeping is more than just data entry it’s a foundational part of your business’s financial health. A solid bookkeeping service handles the day-to-day tracking, recording, and organizing of your financial transactions, ensuring your records stay up-to-date and accurate.
Here’s what’s usually included:
- Transaction Categorization: Organizing your income and expenses correctly for reporting and tax purposes.
- Bank and Credit Card Reconciliation: Matching your internal records with your bank and card statements to catch errors or discrepancies.
- Accounts Payable & Receivable Tracking: Monitoring what you owe and what you’re owed, helping avoid cash flow problems.
- Financial Statement Preparation: Regular reports like Profit & Loss, Balance Sheets, and Cash Flow Statements.
- Monthly Close: Reviewing and finalizing records each month for a clear financial picture.
- Invoicing & Bill Pay (Optional): Creating customer invoices and ensuring vendors are paid on time.
- Payroll Support (Optional): Assisting with paying employees and staying compliant with payroll taxes.
Some providers offer full-service packages that include all the above, while others may focus on just the basics. Knowing what’s covered from the start is key to choosing the right fit.
Bookkeeper vs. Accountant — What’s the Difference?
While both roles support your finances, they serve different functions.
- Bookkeepers handle the day-to-day operations: recording transactions, managing receipts, reconciling accounts, and maintaining accurate financial records. They focus on precision and process.
- Accountants provide financial insight: tax planning, audits, forecasting, and financial strategy. They take the data from bookkeeping and interpret it to help you make informed business decisions.
In simpler terms:
➡️ A bookkeeper keeps your financial house in order.
➡️ An accountant helps you understand what to do with that information.
Although some accountants also perform bookkeeping duties (especially in small businesses), the two roles are not interchangeable. Bookkeeping requires consistency and detail, while accounting requires analysis and strategic thinking.
Who Should You Hire First?
If you’re just starting out or have a small team, your first hire in the finance department should usually be a bookkeeper. Without accurate and timely records, an accountant won’t have the data they need to offer valuable insight.
Ask yourself:
- Do you struggle with keeping track of receipts, invoices, or spending?
- Are you spending hours each month updating spreadsheets?
- Do you want to ensure your tax filings are clean and compliant?
If yes, a bookkeeper is a smart first move. As your business grows and becomes more complex, you can bring on an accountant or finance advisor for more advanced needs.
For larger or fast-scaling businesses, it’s common to have both a bookkeeper and an accountant working in tandem.