Nowadays, many companies are cutting down on staffing costs by using online bookkeeping services. This term is often used interchangeably with virtual and outsourced bookkeeping, but all three terms actually mean different things. Outsourced bookkeeping refers to hiring any bookkeeper who doesn’t work in-house, while virtual bookkeeping means hiring a single freelance bookkeeper online to help you manage your business finances.
Online bookkeeping is a more elegant solution than either of the above. The term refers to contracting a company that usually offers both bookkeeping and accounting services and has a team of professionals taking care of these tasks for you. If you choose the right company, online bookkeeping is an affordable, and safe way to solve your bookkeeping and accounting troubles.
In our reviews below we’ve examined factors like costs, services offered, and accounting software compatibility of the best online bookkeeping services on the market. Another crucial metric we’ve looked at is whether these companies provide their services for both cash- and accrual-based businesses and whether they charge extra for accrual accounting. Check out our list of the best online bookkeeping services for 2021 and beyond.
One of the first questions small business owners ask themselves is whether they need to hire a bookkeeper at all. Some companies choose to hire in-house bookkeepers instead of outsourcing them. This can be a smart move for two reasons.
First, you and your employees should learn some basic bookkeeping skills as soon as possible. You’ll almost certainly need them at some point, and understanding how your books work will help you keep track of your finances and perform certain important tasks when needed. Secondly, if your business handles large expenses - over $300,000 per month for example - outsourcing could cost you a huge amount of money. And if you’re dealing with those sums of money, your company is probably big enough at this point to hire in-house bookkeepers.
However, if you’re running a smaller business and have little or no experience in bookkeeping, your safest bet is probably to outsource your bookkeeping. Hiring online accounting services can even end up saving you money since you and your employees won’t have to waste your time on these tasks. Instead, you can focus on running your business as effectively as possible.
This provider is one of the best online bookkeeping services for your business if you use Xero or Quickbooks accounting software. Bookkeeper360 has three packages, with prices starting from $349/month for cash and $499/month for accrual-based accounting. These prices vary according to which tasks you want Bookkeeper360 to perform and the amount of your monthly expenses. Read Review
- ⦿Wealth of features across three separate plans
- ⦿Offers accrual accounting
- ⦿Simple setup
Bookkeeper.com is the first provider on our list of the best online bookkeeping services, and we consider it the best option when looking for online CPA services. Why? Because Bookkeeper.com has the most affordable all-in-one service. The site offers accounting and bookkeeping to both cash- and accrual-based businesses at the same price. While Bookkeeper.com doesn’t place limits based on company expenses, there are restrictions on the number of monthly transactions that its team handles. Read Review
- ⦿All-in-one solution
- ⦿World-class customer support
- ⦿Easy-to-use website
Bench is another great provider of online accounting services for small business owners. While it doesn’t provide bookkeeping services to accrual-based businesses, Bench’s competitive pricing means it’s worth checking out if you run a cash-based company. The service won’t handle your tax filing unless you provide up-to-date books. Bench has three packages on offer, which you can choose between based on your company’s monthly expenses. Read Review
- ⦿Tax Support
- ⦿In-house bookkeepers
- ⦿Fast service
FinancePal is a one-stop-shop for virtual bookkeeping services. With its US-based team of accounting and tax professionals, it’s the ideal solution for small business owners who don’t have the know-how to handle their own books. They do both cash and accrual accounting, issue financial statements, and handle reconciliations and payroll. Prices start from around $125/month, but you’ll need to get in touch with a company representative for a quote, as they only offer custom plans. Read Review
- ⦿Full-service accounting provider for SMBs
- ⦿Bookkeeping, tax prep, CPA, and invoicing services for one monthly fee
- ⦿Dedicated team for your business
Merritt is the most affordable provider on our list of online CPA services for small business owners, costing just $190 per month. This price is not dependent on the number of transactions your business conducts or how many bank accounts it has. While Merritt only does bookkeeping for cash-based businesses, its services are compatible with Quickbooks; the company will create monthly reports and reconcile your statements. If you’re looking for a cheap online provider that offers basic bookkeeping services, Merritt could be an excellent option for you. Read Review
- ⦿Cheapest prices
- ⦿Top-notch customer service
- ⦿Ideal for small business owners
Pilot is one of the leading online accounting firms that are compatible with Quickbooks. The company offers three packages. The first two Pilot Core and Pilot Select are meant for cash- and accrual-based businesses with monthly expenses below $200,000, while the Plus plan is for larger businesses or those with complex needs with monthly expenses over $200,000. The monthly amount you’ll pay for each of these packages depends on the value of your monthly expenses. While it offers reasonable prices, Pilot does not cover payroll and tax services as a part of its bookkeeping packages. Read Review
- ⦿Focuses on businesses of all sizes
- ⦿Fantastic customer service
- ⦿30-day free trial
KPMG Spark offers remote bookkeeping services packages for cash and accrual-based businesses. Packages for cash and accrual accounting are limited by the value of monthly expenses and the number of accounts/projects you have. In addition to the four fixed plans on offer, there’s also a fifth customizable solution. Tax preparation is not included in any of the packages on offer, but it can be added at an extra cost. Read Review
- ⦿Scalable solution
- ⦿Knowledgeable Support Staff
- ⦿Fantastic Software
The first thing we look at in our reviews of virtual accounting companies is the cost of these bookkeeping services. There are several ways in which the reviewed companies structure their pricing.
The first option is offering fixed prices for packages. With these fixed-price packages, there’s usually a limit to the number of transactions the provider will process for you every month. Of course, if you buy a more expensive package, you’ll get increased limits with more expensive packages.
The second way providers determine pricing is by offering packages based on your business’s monthly expenses. For example, if you’re looking for bookkeeping and payroll services online and your monthly expenses are lower than a certain limit - let’s say $200,000 - you could use a company’s basic package, while if you have more than $200,000 in monthly expenses, you’d have to take a more expensive package. The pricing for a single package can also vary based on how many expenses you have.
Another way bookkeepers calculate prices is by offering fixed monthly prices but with limits on the number and frequency of services.
In many cases, there’s a significant difference between the price of packages for cash-based and accrual-based businesses. While some of the providers on our list of online bookkeeping services reviews, like Bookkeeper.com, offer the same pricing for both types of business, some only service cash-based businesses. Others work with accrual businesses but charge a steep price for it.
Of course, the cost is not the only metric we assess, and it’s not always the most important one. Factors like the range of services each company offers and the accounting software it uses are all crucial. Check out the other factors we considered in our bookkeeping service for small business reviews below.
Dealing with Cash- and/or Accrual-Based Businesses
Before you consider hiring an online bookkeeping provider, it’s vital to find one that offers the services your business actually needs. There are two types of accounting for businesses: cash- and accrual-based accounting.
Cash-based accounting is a system in which transactions are recorded when actual money changes hands. When money goes into or out of your bank account - like when a customer pays for your product or you pay your suppliers - these transactions are recorded. There is no accounts payable or accounts receivable to keep track of with cash-based accounting.
On the other hand, accrual accounting also keeps records of payments that are due. This means that revenue and expenses are recorded when they are earned, not when they’re paid for. The money your customers are due to pay is referred to as accounts receivable, while the money you owe is accounts payable.
The best virtual bookkeeping companies we review differ in the services they offer for cash- and accrual-based businesses. Some companies offer the same services at the same price for both accrual and cash businesses. The second group of bookkeepers offers different prices for these two types of businesses. Lastly, some providers on our list don’t provide their services to accrual-based businesses at all.
Compatibility with Accounting Software
When choosing monthly bookkeeping services, you should take into account which accounting software the service in question uses. The most popular accounting programs are Quickbooks and Xero; if you’re already using one of these two it would save time and resources to choose a service that is compatible with either of those. However, some of the reviewed services have their own software, which they will set up for you. If you aren’t using any accounting software, some providers - like Bookkeeper.com - will purchase an accounting software account for you and transfer your old accounting data to it.
For these reviews, we’ve checked each provider’s accounting software compatibility and listed any specific offers these services might have.
In our reviews of the best bookkeeping services online, we check whether the companies in question offer monthly reconciliations as part of their service. Reconciliation refers to a process in which the accountant compares two sets of records and checks if all the figures and transactions are matching and in order. This includes checking if all expenses match exactly the amount of money that’s taken out of the company account and vice versa for money that’s received. In short, reconciliation provides greater consistency and accuracy.
Reconciliation is not only useful but a necessary tool in order to make sure that no one is tampering with the books and will make tax filings much easier.
Monthly Financial Statement
Another important metric we include in our reviews of the best online accountants is whether or not these online services provide monthly financial statements. All of the providers on our list supply the three most basic financial statements: profit and loss statements, balance sheet reports, and cash flow statements. However, some services provide additional statements (or provide the standard statements more frequently). We list this information in our reviews.
Besides the aforementioned metrics, there are several other things we keep an eye out for during our research. These include tax services, payroll processing, and consulting. We highlight any relevant properties or services offered among these providers that can help you make a decision on which online bookkeeping service to choose.
Online Bookkeeping Services - Top 7 list for 2021
- KPMG Spark
Online Bookkeeping Services for Small Business Reviews
AVAILABLE AT ADDITIONAL COST
- ⦿ No price markup for accrual accounting
- ⦿ Free secure online document storage
- ⦿ One-on-one teleconference meetings with a dedicated bookkeeper
Bookkeeper.com ranks number one on our list of online bookkeeping and payroll services for several reasons. First of all, this company offers accounting for both cash- and accrual-based businesses for the same price. Secondly, Bookkeeper.com has fairly low prices, especially considering that the price is the same for both accrual and cash businesses. This is very rare among bookkeeping services since most charge considerably more for accrual-based businesses. As part of your package, the company can also help you set up Quickbooks accounting software.
Bookkeeper.com has three predetermined packages of online bookkeeping services for small business owners plus a fourth custom solution.
Priced at $449/month, the Small Business plan lets you process up to 100 transactions per month. With this plan, you also get access to a dedicated bookkeeper and account manager, a secure portal with document storage, monthly bank/credit card reconciliation, documents such as balance sheet, profit and loss, and statement of cash flows, and limited online support.
The Small Business Plus solution will set you back $649/month and let you make up to 200 transactions. In addition to everything from the first tier, this plan also offers up to 20 invoices in the bill pay feature, 30 minutes of monthly scheduled meetings, and unlimited online support.
Small Business Advanced, the provider’s third-tier online bookkeeping software solution, costs $649/month and supports up to 300 monthly transactions. It offers 40 invoices in the bill pay feature and 45 minutes of monthly scheduled meetings. Additionally, this Bookkeeper.com plan comes with lite CFO and advisory services and the functionality which allows you to separate transactions by class, location, and department.
Lastly, there’s the Custom solution for users who don’t find any of the options above adequate. If you opt for Bookkeeper.com’s custom online CPA services, you’ll get everything from the fixed plans plus the opportunity to choose the number of monthly transactions. You have a team of bookkeepers ready to assist you at any time, and your dedicated bookkeeper will have one-on-one teleconference meetings with you to go over your financial reports.
To conclude, Bookkeeper.com offers a competitive, all-encompassing bookkeeping and accounting service for both accrual- and cash-based businesses while still being affordable. For this reason, Bookkeeper.com tops our list of bookkeeping services online.
- ⦿ Expense management available across all packages
- ⦿ Uses own proprietary bookkeeping software
- ⦿ Provides catch-up booking services
Another great provider on our list, Bench, is one of the best possible choices for cash-based businesses. While Bench only provides bookkeeping services to cash-based companies, it is one of the most affordable options and offers a wide variety of services. Furthermore, you can send your financial reports for checks and invoices to Bench, and the company will adjust your monthly statements to reflect accounts receivable and accounts payable as well.
There are three Bench bookkeeping packages on offer. All three options offer bookkeeping, tax prep, advisory, and banking in a single platform.
Core, the first online accounting and bookkeeping services package, is priced at $249/month if billed annually ($299 for monthly billing) and is meant for businesses who want a business bank account with integrated bookkeeping. It comes with real-time accounting and a free business bank account if you bank with LendingClub.
With the Flex plan, you’re looking at $349/month for annual billing or $399/month for monthly billing. This option was created with businesses with existing bank accounts in mind and comes with customized accounting features.
Lastly, the Pro version is meant for companies with complex accounting needs. If billed annually, it will set you back $479/month or $599/month if billed monthly. It offers specialized account features.
All plans come with monthly bookkeeping and annual financial statements, expert support, tax preparation and filing for those with up-to-date books, and the opportunity to connect with major payroll and payment processing platforms.
Although it only handles cash-based businesses, Bench accounting is definitely a great option if you’re looking for online bookkeeping and accounting services. The company has relatively low prices and a good selection of services and packages on offer, making it a great choice for cash-based small businesses looking to outsource their bookkeeping.
AVAILABLE AT ADDITIONAL COST
- ⦿ Dedicated accountant services
- ⦿ Training and technical support for using accounting software
- ⦿ Full tax filing available for an additional fee
Bookkeeper360 is an online bookkeeping service best suited for small businesses that use Xero or Quickbooks accounting software. Like Bookkeeper.com, Bookkeeper360 also works with both cash- and accrual-based businesses. There are three bookkeeping packages on offer, including a pay-as-you-go solution.
For online accounting and bookkeeping services, Bookkeeper360 has several plans to choose from.
First, there’s the Monthly plan, priced at $399/month or $349/month with the current discount (cash-based accounting) and $549/month or $499/month (accrual-based accounting). Note that the price is higher for users with more than $20,000 in monthly expenses. This package comes with a dedicated accountant, monthly reconciliation, profit and loss, and balance sheet. It also gets access to quality customer support.
You can also opt for the Weekly plan, which will set you back $499/month or $549/month with the current discount (cash-based accounting) and $749/month or $699/month (accrual-based accounting). Once again, the cost will be higher if your monthly expenses exceed $20,000. As one of the top bookkeeping services online, the Weekly plan comes with all the features offered in the Monthly solution with the addition of a dedicated accounting team, weekly updates, and advanced reporting.
There’s also the Pay-As-You-Go plan which starts at $19/month plus $99/hour for support and offers a fast and easy setup, a dedicated accountant, and on-demand bookkeeping, training, and advisory.
For additional fees, Bookkeeper360 also provides tax filing (starting from $200 per filing), full payroll processing services ($45/month), CFO advisory (starting from $1,000/quarter), and back-office services (starting from $99/month). Combined, this is all you could ask for in CPA bookkeeping services online.
While it’s a bit more expensive than the competition, Bookkeeper360 still brings a lot to the table. While Bookkeeper360 used to offer the same pricing for both accrual and cash-based businesses, the company now has different packages for each. However, these new service packages are more competitively priced. Additionally, no matter which plan you decide to go for, you’ll get access to best-in-class support. Overall, Bookkeeper360 is a solid choice if you need comprehensive bookkeeping online services.
- ⦿ Custom-tailored plans
- ⦿ Mobile receipt tracker
- ⦿ Lots of useful third-party integrations
If you’re looking for a dedicated team of US-based tax and accounting experts to handle your finances, file taxes, and take care of your team’s payroll, FinancePal is an ideal solution. Offering one of the best virtual bookkeeping services with supremely customizable plans and reasonable pricing, FinancePal is a perfect fit for small businesses and startups intimidated by the prospect of running their own books.
Unlike most competitors, FinancePal doesn’t display pricing plans on its website. That is because the company emphasizes a granular approach to customers, offering each individual/company a chance to make their own plan. This is done by cherry-picking and customizing services to create a unique package that saves money by avoiding unnecessary expenses. Unfortunately, it also means that you won’t know how expensive or cheap the bookkeeping services are before reaching out to get a quote.
Luckily, getting a quote requires nothing more than divulging basic details about your business (type, size, number of employees, W2 employees, 1099 contractors, etc.) and choosing whether you’ll need payroll and tax filing services. Prices start as low as $125. For the purposes of this review, we got ourselves a quote for a small arts and crafts supplier with ten employees. Still, you can choose between numerous industries ranging from agriculture and advertising to construction, restaurant insurance, legal counseling, and more.
The basic small business bookkeeping services ended up costing us $205 per month. These included access to FinancePal’s dedicated account manager, monthly financial statements and reconciliations, a mobile receipt tracker, and the use of the company’s excellent smartphone app for iOS and Android systems.
To get tax services (which include corporate tax preparation for sales and use taxes, along with tax consulting with FinancePal’s experts), you’ll need to pay extra for the One Solution Accounting plan. In our case, this ended up costing $280 per month in total.
FinancePal offers seamless integration with popular accounting and payroll software such as ADP, Gusto, Quickbooks, and Xero. As with other virtual bookkeeping companies, the customer service is quick to respond and very helpful. Finally, your personal account managers can also answer any questions you may have about tax filing and other complicated accounting procedures.
FinancePal is offered by industry veterans Community Tax, which is best known for its excellent IRS tax debt resolution services. FinancePal tailors its services to new business owners overwhelmed by the complexities of filing taxes and handling payroll. Although the pricing scheme isn’t available on the website, getting a custom quote is a quick and easy process and the prices are very competitive.
- ⦿ Fixed pricing scheme
- ⦿ Very simple and quick setup
- ⦿ Supports Quickbooks
Merritt is a California-based online bookkeeping and accounting service that only works with businesses that use cash accounting and only has one package to offer. However, the company charges an affordable, flat rate and offers free online bookkeeping services for nonprofits and charities.
Merritt’s bookkeeping package comes at a flat rate of $190/month. The company does your bookkeeping and accounting in Quickbooks Online, which means that if you use cash-based accounting and you’re already using Quickbooks, Merritt is the cheapest option for you. This package offers the basic bookkeeping services you might need, including monthly reconciliations, monthly financial statements, and collecting all your bank statements for you. Merrit does not provide tax services or payroll processing, so you’d have to use some other software for that or outsource those services to someone else. Signing up to Merritt is quick and easy; it usually takes no longer than 24 hours.
While Merritt offers only simplified bookkeeping without tax service and payroll processing, it could still be a great choice for you if you’re looking for no-frills cheap online bookkeeping services. It’s the most affordable option for small businesses that use Quickbooks cash accounting or self-employed individuals and boasts excellent user reviews and a 90-day money-back guarantee.
AVAILABLE AS A SEPARATE SERVICE
- ⦿ Accrual bookkeeping services with a dedicated bookkeeper
- ⦿ Custom reporting features
- ⦿ Special discount for pre-revenue companies
Pilot is another Quickbooks-compatible provider that makes our list of online bookkeeping and accounting services for small businesses. Pilot has three packages to choose from, all available to both cash and accrual-based businesses. While the first two plans come with a predetermined list of services and are meant for companies with monthly expenses below $200,000, the third option is completely customizable.
Although the starting rates Pilot offers are relatively affordable, this company does not provide flat-rate online bookkeeping services; the price depends on the exact amount of monthly expenses your business has.
The first package is called Pilot Core. This plan is ideal for small businesses and comes with a dedicated finance expert, support for accrual-basis bookkeeping, P&L, balance sheet, cash flow statements, support, and a monthly price between $599 and $899.
The second package, Pilot Select, is a good choice for growing businesses that need more support. This plan offers everything included in the Core plus industry-standard financial ratios, expedited books delivery, monthly phone reviews, and priority support for a price ranging between $849/month and $1049/month.
It’s worth noting that Pilot offers pre-revenue companies a $200 monthly discount on the Core and Select plans.
The third option on the list of Pilot’s online business bookkeeping services is the Plus plan. An excellent choice for companies with more than $200,000 in monthly expenses, this option includes everything from the first two plans plus add-ons such as support for multiple entities, classes, and locations, AR, AP and inventory tracking, billable expenses, and a fully customizable chart of accounts.
Pilot bookkeeping does not include tax services or payroll processing. However, you can purchase tax and CFO services separately.
Pilot uses Quickbooks Online for its bookkeeping service. The company can either import your old data or open a new Quickbooks account for you.
While Pilot does not offer tax or payroll services, it provides packages for both cash and accrual-based accounting. The pricing may vary depending on your monthly expenses, but if you can estimate them reasonably, Pilot’s payment model may work well for you. The company offers a month-long trial of its free services for bookkeeping online, so if you’re having second thoughts, don’t hesitate to test out the service without any obligation to continue.
AVAILABLE AS AN ADDITIONAL SERVICE
- ⦿ Solutions for cash and accrual accounting needs
- ⦿ Easy expense tracking
- ⦿ Automatic payroll services through WePay
KPMG Spark, formerly known as Bookly, offers comprehensive bookkeeping and accounting services. The company provides its services to both accrual and cash-based businesses. As with many other services, KPMG Spark’s solutions for accrual businesses are much more expensive than those for cash-based ones. However, the company offers practically all imaginable bookkeeping services, which partially makes up for its slightly higher prices.
KPMG Spark’s online bookkeeping services pricing page features four fixed packages and a customizable option for companies with specific needs.
First, there is the Basic plan, ideal for businesses with up to 100 monthly transactions and up to three bank accounts. It’s priced at $295/month and includes cash-based bookkeeping, real-time bank and credit card reconciliation, daily categorization of revenues and expenses, receipt and document storage, support for multiple users, on-demand financial reports, and customer service via video, text, email, phone.
The Essential plan will set you back $595/month. It is designed for businesses with 101-200 monthly transactions, four to six bank accounts, and project accounting for up to two projects. It offers everything from the Basic plan plus a dedicated accounting team, project accounting, custom access by role, and a customized accounts chart.
As one of the best online bookkeeping services for small businesses, the Professional plan ($795/month) was created for accrual-basis businesses with 201-300 monthly transactions and seven to nine bank accounts. It supports project accounting for three or four projects. On top of the features offered in the previous plans, it also lets you create and schedule client invoices and payments. Finally, it supports cash flow statements.
If your company has up to 300 monthly transactions, up to nine bank accounts, and requires project accounting for five or six projects, you should consider the KPMG Spark Premium solution. Priced at $895/month, this plan also features quarterly financial analysis reports and consultations.
Lastly, the customizable Elite plan offers a long list of add-ons such as inventory tracking, custom and consolidated reporting, quarterly reconciliations with an investment manager, and more.
You’ll get access to KPMG Spark’s own accounting software, which the company uses to perform its bookkeeping and accounting services online. If you previously used Quickbooks or Xero, KPMG Spark can integrate data from that software into its own.
The company also offers tax services and payroll processing for an extra fee. For an additional $125 per month, KPMG Spark will prepare your tax returns. Payroll processing will cost you an additional $100 per month, plus another $6 for every employee.
Should you go for KPMG Spark’s bookkeeping service? It’s certainly worth considering, as this respected company offers highly rated bookkeeping and accounting services for both accrual and cash-based businesses. That said, the pricing is quite steep, especially for accrual-based accounting. On the other hand, the company allows you to take care of all your bookkeeping needs in one place, tax and payroll services included, which is a worthwhile tradeoff for many businesses.
Bookkeeping refers to the recording and tracking of all financial transactions, while accounting refers to interpreting and summarizing this data. However, people often use these terms interchangeably.
Online bookkeeping refers to outsourcing bookkeeping services to an individual or a company, usually through bookkeeping websites, which perform these services and communicate with you online. This means that transactions and other financial documents will be exchanged and updated online through bookkeeping software.
Bookkeeping services include but are not limited to, performing monthly reconciliations, creating financial statements and reports, handling taxes, and payroll processing.
Hiring a bookkeeper frees up your time to focus on business, minimizes the chances of making critical errors, alleviates tax concerns, and gives you a clear view of your finances.
When hiring an online bookkeeper, you should look for a trustworthy and cheap provider that performs all bookkeeping services for your type of business.
Free online bookkeeping services are almost impossible to find. The monthly cost of bookkeeping depends on the amount of services the provider offers, your monthly expenses, and whether you deal in cash or accrual accounting. Exact pricing systems differ between providers, but monthly prices range anywhere from $190 to $1,000.
In order to find a bookkeeper, you need to evaluate which bookkeeping services your business needs. First of all, look at whether you need cash or accrual accounting, tax services or payroll processing, the number of expenses you have, how many accounts you need reconciled, and so on. These are some of the most important metrics to keep in mind when looking for online bookkeeping services.