Best Bookkeeping Service for Small Business: How to Choose

Let’s address the elephant in the room: this is an article about choosing a bookkeeper, written by a bookkeeper.

I’m going to try my hardest not to simply say “choose me.” In fact, there’s a large portion of potential clients I strongly wish would not choose me, because the service I provide isn’t a good fit for what they’re looking for.

So instead of giving you a generic checklist of “questions to ask your bookkeeper,” let me give you a high-level view of the bookkeeping industry - the different types of services that exist and which businesses they’re actually suited for.

The Bookkeeping Landscape

Not all bookkeeping services are the same. They serve different needs at different price points. Here’s how I’d break it down:

DIY Software

What it is: You do the bookkeeping yourself using software like QuickBooks, Xero, Wave, or FreshBooks.

Who it’s for: If you have under 50 transactions a month, DIY is probably fine. A transaction is any time money moves - an expense, a payment, a transfer between accounts. Under 50 a month, you can likely stay on top of it yourself without too much pain.

The caveat: Even if you have few transactions, if you’re profitable enough that you’d rather just remove bookkeeping from your plate entirely, go ahead and hire someone. Time has value.

Offshore or Automated Services

What it is: High volume, low touch, minimal human review. Often very cheap. The work might be done overseas or heavily automated.

Who it’s for: This works well if you already have someone in-house handling your finances - a controller, a CFO, or a dedicated finance person. They need the data categorized and reconciled, but they don’t need hand-holding or insights. They’ll take the output and do the analysis themselves.

Who it’s NOT for: Anyone expecting a relationship, coaching, or someone to help them understand their numbers. This is a data processing service, not a partnership.

Traditional Bookkeeping

What it is: A bookkeeper handles transaction categorization, bank reconciliation, and produces your basic financial statements - profit and loss, balance sheet, maybe a cash flow statement.

Who it’s for: Most small businesses with more than 50 transactions a month. You’ve reached the point where keeping up with the books yourself is becoming a project. You need someone reliable to keep things accurate and current so you’re ready for tax time.

What you get: Clean books. Accurate statements. Peace of mind that the numbers are right.

What you don’t get: Someone helping you understand what the numbers mean or what to do about them.

Advisory Bookkeeping

What it is: Everything a traditional bookkeeper does, plus regular meetings - typically monthly - to review your financials together, set goals, and work on improving your business’s financial performance.

Who it’s for: Business owners who aren’t just looking to get their bookkeeping done, but acknowledge that parts of their business need to be improved. You want someone to challenge your assumptions, compare your numbers to industry standards, and hold you accountable to hitting your goals.

How it works (this is what I do): I meet with the business owner, identify their goals, get access to their books, and figure out where money is currently going and where it’s coming from. Then I provide a report comparing their numbers to industry best practices for businesses their size. We set target allocations for expense categories and work toward hitting them. Typically it takes 9 to 18 months to get expenses in line - especially if there are past decisions with lasting effects, like an oversized lease.

Who it’s NOT for: I’ll get to this below.

Payroll Services

What it is: Managing payroll - calculating wages, withholding taxes, filing payroll tax returns, handling compliance.

Who it’s for: Any business with employees where you don’t want to worry about jumping through all the correct hoops yourself. Missing a payroll tax deadline is not fun.

How to get it: Sometimes this is an add-on from your bookkeeper. Sometimes it’s a standalone service from a payroll company. Either works.

Accounts Receivable Management

What it is: Someone takes a proactive role in invoicing your clients, following up on outstanding invoices, and helping you collect cash.

Who it’s for: Businesses where chasing payments is eating up significant time, or where receivables are slipping through the cracks.

How to get it: Like payroll, this can be an add-on or a standalone service.

Fractional CFO

What it is: Strategic financial guidance at an executive level - financial modeling, forecasting, scenario planning, fundraising support, board and investor reporting, M&A preparation.

Who it’s for: Businesses preparing for something big. You’re raising a funding round. You’re getting ready to sell the business. You’re scaling rapidly and need sophisticated financial strategy. You’ve gotten complex enough that you need someone thinking at a higher level than expense tracking and monthly statements.

What it costs: Significantly more than bookkeeping. You’re paying for strategic thinking, not data entry.

Common Mistakes When Choosing

Thinking a bookkeeper will fix a financial mess

This is the biggest one. People find themselves in a financial hole and think “I need a bookkeeper.” But all a bookkeeper will do is accurately document that you’re in a hole.

If you’re in a mess, you need more than bookkeeping. You need someone who can help you identify where the problems are and coach you on how to get out. A traditional bookkeeper won’t do that. You need advisory services or possibly a fractional CFO depending on the complexity.

Confusing bookkeepers with accountants

Bookkeepers categorize transactions and produce financial statements. That’s it. We are not allowed to do tax strategy, tax planning, or give tax advice. If you need someone to help you minimize your tax burden, that’s a CPA or tax professional - not a bookkeeper.

Your bookkeeper keeps your books clean so your accountant can do their job at tax time. They’re different roles.

Not understanding what you actually need

Before you start shopping, figure out what you’re actually looking for:

Just need clean books for tax time? Traditional bookkeeper.
Want someone to help you understand and improve your numbers? Advisory bookkeeping.
Need help with payroll or collections? Look for those specific services.
Preparing for a major financial event? Fractional CFO.

Hiring the wrong type wastes money and leaves you frustrated.

Who Should NOT Hire Me

Since I’m being honest, here’s who I’m not a good fit for:

You just want compliance. If you don’t care about improving your business and just need books done for taxes, a traditional bookkeeper will cost you less and serve you fine.

You won’t do the work. My system requires you to show up monthly, look at the numbers, set goals, and actually make changes in your business. If you want to hand it off and never think about it, you’ll be frustrated with me.

You just want validation. I heard someone say that no one hires a consultant to teach them what they don’t know - they hire a consultant to tell them what they think is right. If you want someone to blow smoke, don’t hire me. I’m going to show you the dragon eggs before they hatch into fire-breathing monsters.

You already have it figured out. If your business is already optimized, you’re hitting your targets, and you just need someone to maintain the books - you don’t need advisory services. A traditional bookkeeper will do.

You’ve outgrown this level. If you’re preparing for a funding round, a sale, or you need sophisticated financial modeling, you need a fractional CFO, not me.

The Bottom Line

The best bookkeeping service for your business depends entirely on what you actually need.

Under 50 transactions a month and comfortable with software? DIY is fine.

Need clean books but not hand-holding? Traditional bookkeeper.

Want someone to help you understand your numbers and improve? Advisory bookkeeping.

Preparing for something big? Fractional CFO.

Don’t pay for more than you need. But also don’t expect more than you’re paying for.

Think advisory bookkeeping might be what you need? Book a consultation and let’s talk through your situation. No pressure - we’ll figure out together whether I’m actually the right fit or if you need something different.