4 Online Bookkeeping Services to Consider in 2020

You didn’t get into business because you wanted to become pen pals with the IRS. And unless your business is actually an accounting firm, the idea of spending hours pouring over Excel sheets probably doesn’t sound like a perfect Sunday afternoon either.

Still, one can’t overstate the importance of good bookkeeping for the long term success of any business endeavor, especially in the rocky economic climate we live in today.

This is where online bookkeeping services come in. While cleaning up your own office or cooking up a feast for your team may be excellent cost-saving ideas that can double up as fun team building exercises, bookkeeping is a whole different beast. Outsourcing is often a luxury, but not when it comes to crucial matters like finances.

After all, would you try to fix your own broken leg or tamper with the local power grid just to save some cash? The same goes with finances… best leave it to the pros. After all, even MacGyver had the Phoenix Foundation for all his accounting needs.

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Top 4 Online Bookkeeping Services for 2020

1. Bench

Bench has fantastic online bookkeeping and accounting services for companies that already hire a part-time accountant. Its professional staff can either walk you through its extensive software and handle every aspect of your finances for you, or work directly with your existing CPA without you having to get involved in the process at all. Full Review

  • Great value plans
  • Comprehensive income tax summary reports
  • Very user friendly interface

Bench has fantastic online bookkeeping and accounting services for companies that already hire a part-time accountant. Its professional staff can either walk you through its extensive software and handle every aspect of your finances for you, or work directly with your existing CPA without you having to get involved in the process at all. Full Review

2. Bookkeeper.com

Bookkeeper.com offers a great value solution for people who need an all-encompassing bookkeeping, accounting, payroll, and tax prep solution. They manage your accounts using the popular Quickbooks accounting software, which ensures an intuitive - if somewhat less-customizable - user experience. Full Review

  • All-in-one accounting, payroll, and tax solution
  • Intuitive
  • Free financial advice and training

Bookkeeper.com offers a great value solution for people who need an all-encompassing bookkeeping, accounting, payroll, and tax prep solution. They manage your accounts using the popular Quickbooks accounting software, which ensures an intuitive - if somewhat less-customizable - user experience. Full Review

3. Merritt Bookkeeping

Our list of accounting and bookkeeping services would be incomplete without the most affordable and straightforward solution of them all. While Bookkeeper tries to cover every angle and offer a wealth of bonus features, Merritt’s entire philosophy is based on offering core small business bookkeeping tools at a more affordable price than the competition. Full Review

  • Most affordable solution on our list
  • Uses excellent Quickbooks Online software
  • Perfect for small businesses

Our list of accounting and bookkeeping services would be incomplete without the most affordable and straightforward solution of them all. While Bookkeeper tries to cover every angle and offer a wealth of bonus features, Merritt’s entire philosophy is based on offering core small business bookkeeping tools at a more affordable price than the competition. Full Review

4. Bookkeeper360

Whereas Merritt Bookkeeping and Bookkeeper.com focus on QuickBooks, Bookkeeper360’s forte is having a team of experts certified in using the second most popular accounting software, Xero. In addition, the company offers a comprehensive list of online small business accounting features and has some of the most thorough monthly financial reviews in the business. Full Review

  • Wide variety of services offered
  • Real-time financial information
  • Works with both Xero and QuickBooks

Whereas Merritt Bookkeeping and Bookkeeper.com focus on QuickBooks, Bookkeeper360’s forte is having a team of experts certified in using the second most popular accounting software, Xero. In addition, the company offers a comprehensive list of online small business accounting features and has some of the most thorough monthly financial reviews in the business. Full Review

Detailed Reviews

Bench
Bench

BEST FOR

overall online bookkeeping

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  • Price: From $149 to $419 per month
  • Accounting Types Supported: Cash and Accrual
  • Reconciliations: Yes
  • Financial Statements: Yes
  • Expense Management: Yes
  • Software Setup: Yes
  • Payroll Services: No
  • Tax Return Services: Available as a separate service

Overview

With its bookkeeping-only plans, Bench offers fantastic virtual bookkeeping services for companies that already have a tax filing professional but need someone to handle the daily finances. Every client gets a dedicated bookkeeper who can analyze your books and send monthly financial reports or even work directly with your own accountant, helping them out with tax filing or payroll.

Pricing

Bench’s bookkeeping services are somewhat unique in its pricing scheme. Other than the optional add-ons for payroll and tax return services, all of the standard bookkeeping features are available across all plans. The different plans are based on how big your monthly expenses are. This makes Bench one of the best online bookkeeping services for small business and startups.

The plans can be billed on an annual or monthly basis, with the latter being anywhere from $20 to $50 more expensive per month. There are five in total, starting with the $149/month Starter plan, all the way to the $419/month Corporate Plus plan.

All of the plans have a 30-day free trial available, so you can test out the features before committing. There are also separate tax filing plans called BenchTax, starting at $660 per annual filing for sole business proprietors.

Main Features

As with other online bookkeeping services for eCommerce, Bench technically supports both cash and accrual-based accounting methods. That being said, its plans are built around cash-based accounting systems. If your company operates with an accrual accounting method, you need to get in touch with the staff to get a specialized quote.

In terms of accounting features, all of the important bookkeeping tools are available across all plans. You can see your cash flow in real-time on your dashboard, and its easy-to-read visual reports offer instant insights into how your business is doing financially.

As with the best virtual bookkeeping services, Bench not only does excellent financial statements, but monthly reconciliations too. At the end of each month, you’ll get a balance sheet as well as bank reconciliation and income statement reports, while at the end of each year it will provide you with a comprehensive income tax summary report.

Unlike many competitors, Bench has its own proprietary software that you log into with a secure, company-given ID. It allows you to run daily reports and view all of the important financial data at a glance.

Bonus Features

In addition to standard online CPA services, Bench also offers specialized services such as an expert Bench team to track cash revenue and expenses, accounts receivable, accounts payable, or segment level bookkeeping.

It doesn’t pay your bills or offer payroll services, but provides support for external services such as FreshBooks or Sage.

If you’re after tax return services, it’s handled under a separate service called BenchTax. All BenchTax plans cover unlimited state filings, investments, rental income, and more. The prices go between $660 and $1,440 per year and do not include any of the Bench accounting features mentioned above.

Customer Support

Whether you need a small business bookkeeping service or one equipped to handle corporate-level accounting, Bench has you covered. Every plan guarantees you access to a dedicated representative from its highly specialized team of bookkeeping experts and certified professional accountants.

They can guide you through Bench’s software, help prepare your tax filings, work with your existing accountant to clear up any questions, and more.

Our Verdict

Overall, Bench is a great service, especially if you are a small company or startup that already has payroll and tax filing sorted. With excellent bookkeeping features, great in-house software, and fantastic support, our biggest complaints are the lack of payroll services and the fact that optional tax filing through BenchTax can get expensive.

Pros Cons
Excellent breakdown of the financial statements Expensive tax filing as a separate service
Bookkeeping-only plans keep the costs down No payroll services
Fantastic customer support representatives
Bookkeeper.com
Bookkeeper.com

BEST FOR

all-in-one finance solution

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  • Price: From $285 to $495+ per month
  • Accounting Types Supported: Cash and Accrual
  • Reconciliations: Yes
  • Financial Statements: Yes
  • Expense Management: Yes
  • Software Setup: Yes
  • Payroll Services: Paid add-on
  • Tax Return Services: Paid add-on

Overview

Ideal online accounting services for small business owners are those that cover not only basic monthly bookkeeping tasks, but provide all-in-one solutions that allow people to focus on other, more fun aspects of running their company. Bookkeeper.com does exactly this, offering an all-inclusive set of bookkeeping and tax services at a fairly reasonable price.

Pricing

Like Bench, Bookkeeper offers its plans based on your monthly transactions. Unlike Bench, these guys are concerned with how many actual transactions you have per month, rather than their total value. Another difference is that higher tier plans also offer bonus features.

Its virtual accounting services are offered across three plans: Small Business, Small Business Plus, and Small Business Advanced. All plans feature the same reconciliation and financial statement services while differing in the number of transactions supported and professional consultancy options offered.

Small Business starts at $285 per month and gets you up to 125 transactions per month, as well as the Lite CFO and business advisory service.

Moving up to Small Business Plus will cost you $495 per month but support up to 250 monthly transactions and add general business consulting, strategic and tax planning, and necessary software training. You’ll also get access to an optional monthly performance report with key performance indicators.

Those wanting the most comprehensive set of bookkeeping services for their small business can opt for the Small Business Advanced plan. It adds support for more than 250 monthly transactions and more advanced features such as a business advisory service. The price will have to be negotiated with the company, though.

Main Features

The first big plus for Bookkeeper is that it supports both cash and accrual accounting out of the box, so your pending vendor transactions and customer invoices will be handled without having to pay extra.
Even the cheapest Small Business plan features detailed monthly financial statements and reconciliations.

Our online bookkeeping services review should note here that Bookkeeper is the only company we found that uses both Online and Desktop versions of the excellent QuickBooks software. That means that you can view all of the reports generated by the company even while offline.

Bonus Features

In addition to excellent financial statements and reconciliations, Bookkeeper has excellent expense management tools. You have the option of scanning your business receipts and categorizing business expenses into the appropriate accounts.

Payroll and tax filing services are both available as extra services. Bookkeeper can handle checks or direct deposits for employee, federal and state tax payments, quarterly or end-of-the-year tax forms, unemployment tax liabilities, common forms like 1099’s, W-2’s, and much more.

Finding online accountants for your small business that won’t rip you off can be tricky. This is especially true when it comes to tax handling. Although not cheap, Bookkeeper’s payroll and tax return services offer competitive pricing that’s negotiable depending on the size of your business, scope of the operations, previous history with the company, and so on. You’ll have to get in touch with them to get a price quote, though.

Customer Support

As with all good accounting services for small business owners, Bookkeeper knows the value of active client communication. You will get to meet with your dedicated professional accountant each month in order to review all of the financial reports. If you have any further questions or concerns, you can reach out through email or phone.

Our Verdict

Simply put, Bookkeeper is one of the best bookkeeping and payroll services online at the moment. With an affordable monthly plan that can easily be expanded into a one-stop-shop solution for bookkeeping, payroll, and tax management, Bookkeeper is a solid choice for outsourcing all of your financial management needs.

The only real complaints we have are that the super useful advisory services are locked behind the more expensive plans and that there is no free trial available to test them out.

Pros Cons
Fantastic feature set No free trial offered
Native support for both cash and accrual accounting
Excellent desktop software
Merritt Bookkeeping
Merritt Bookkeeping

BEST FOR

budget bookkeeping

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  • Price: $190
  • Accounting Types Supported: Cash only
  • Reconciliations: Yes
  • Financial Statements: Yes
  • Expense Management: Yes
  • Software Setup: Yes
  • Payroll Services: N/A
  • Tax Return Services: N/A

Overview

Merritt Bookkeeping is a refreshingly straightforward company. Its goal is simple: provide fantastic bookkeeping services powered by the industry-leading Quickbooks Online tools at a fraction of the price you’d pay with most other popular online bookkeeping services. Don’t expect fancy extras such as payroll, tax filing, or inventory management, though.

Pricing

The thing we love most about Merritt Bookkeeping is its dedication to keeping everything simple and intuitive. This is best exemplified by its pricing structure or rather lack thereof. There is only one single plan, which costs a flat $190 per month.

In addition to being the bookkeeping company with the simplest pricing scheme, it is also one of cheapest, with only Bench’s Starter plan being cheaper ($149). The simplicity does come at a cost of providing only the basic Quickbooks bookkeeping services, so you’ll have to handle payroll and tax returns through other means.

Main Features

Despite the popular price, Merritt can easily match other online bookkeeping services when it comes to the main accounting features that the average business will need.

Unfortunately, one of the concessions that had to be made to offer a competitive price is cutting the support for accrual accounting. That means that you’ll have to find other ways of handling features such as customer invoicing and inventory management.

When it comes to reports and reconciliations, Merritt will collect all of your monthly bank statements, reconcile bank and credit card accounts, and create monthly reports that you can view online.

Bonus Features

As we’ve already mentioned, unlike some other online accounting and bookkeeping services, Merritt Bookkeeping is pretty much solely focused on core bookkeeping services. This means that you’ll have to find other services to handle payroll and tax returns.

Our recommendation is to look around for programs that are compatible with QuickBooks in order to have the smoothest possible experience. For example, the company behind QuickBooks, Intuit, has a payroll software solution that comes with native QuickBooks support.

Customer Support

Despite not having the human resources of some of the more expensive competition, Merritt’s customer service is highly praised by the community. Its expert accountants will typically answer any text queries you may have within a day, but you may also contact them via phone during the business hours.

Our Verdict

Online accounting and bookkeeping services have seen a massive surge of popularity in the last two decades. While some bookkeeping firms combat competition through incredible feature sets or round-the-clock customer support, Merritt Bookkeeping focused on being an affordable and intuitive solution.

Powered by the excellent QuickBooks software and featuring a simple and intuitive user interface, Merritt represents the best value no-frills bookkeeping solution on the market.

Pros Cons
Affordable flat-rate prices No payroll or tax filing
User-friendly web interface Limited reports
Great customer support
Bookkeeper360
Bookkeeper360

BEST FOR

Xero users

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  • Price: From $359 to $1,124+
  • Accounting Types Supported: Mostly cash; accrual on request
  • Reconciliations: Yes
  • Financial Statements: Only in the Premium plan
  • Expense Management: Yes
  • Software Setup: Yes
  • Payroll Services: Paid add-on
  • Tax Return Services: Paid add-on

Overview

If you’re looking for a comprehensive set of bookkeeping and accounting services online but also happen to be a fan of Xero software, Bookkeeper360 is probably the best option around. That being said, the plans that include monthly reconciliations and financial statements are comparatively more expensive than most of the competition.

Pricing

Although Bookkeeper360 has a lot of pricing options, price is not a strong point compared to most of the competition. The first choice is between cash and accrual based accounting, with the latter being a fair bit more expensive.

The other choice is the update frequency. While most competitors offer monthly online business bookkeeping services, Bookkeeper360 offers the option of weekly updates. It will cost you, though – while monthly plans start at $359 for cash and $494 for accrual accounting (with a 10% discount achieved by paying annually), weekly ones start at $494 for cash and $674 for accrual accounting.

Pricing also depends on the user’s monthly expenses, with thresholds at $35,000, $50,000, $65,000, and $85,000. Prices ramp up rather quickly, with $85k in monthly expenses costing you $809 per month for cash and $944 for accrual accounting if you go for monthly updates and a huge $944 and $1,124 if you opt for weekly ones. If your expenses are even higher than $85k, you’ll have to get a quote.

In addition to the main accounting services for both small business owners and larger companies, Bookkeeper360 also offers a plethora of support services, such as the $19/month business performance app with real-time metrics and the $199 Business Support plan with two hours of monthly bookkeeping support from a dedicated accountant.

There are also CFO advisory tools starting at $1,000 per quarter, tax return services at $200 for individuals or $800 for businesses per filing, payroll and HR starting at $45 per month, and back-office tools starting from $99 per month.

Main Features

As we’ve already mentioned, the company’s bookkeeping online services heavily favor cash accounting, but accrual is available, too, at a significantly higher cost.

Financial statements and reconciliations are available from the Basic ($399) plan onwards, and you can choose to have them updated on a monthly, weekly, or even daily basis. There are detailed profit and loss reports, cash flow statements, and balance sheets available.

Bookkeeper360 connects all of your bank and credit card accounts to Xero, so they are easy to access and will perform regular end-of-the-month reconciliations.

Bonus Features

In addition to the standard online bookkeeping services, Bookkeeper offers a huge variety of bonus services. One of the better value options is the excellent HR & Payroll module.

It includes both checks and direct deposits, as well as filing and payment of all federal and state payroll taxes. The HR side of things covers time (and time off) tracking, workers’ compensation insurance, medical benefits, and department mapping and comes with the services of a certified HR expert.

Tax filing services are also available, as are back-office, inventory, and expense management tools. The company can take care of point-of-sale systems, resource planning integrations, reimbursements, and more.

Customer Support

Whether you’re looking for online personal bookkeeping services or need enterprise-level support, Bookkeeper360 will oblige. You can get in touch with them through email, live chat, or phone, and professional accountants are available for consultations even in the cheapest Support plan.

Our Verdict

While being far from the cheapest, Bookkeeper360 offers a fantastic set of services and manages to successfully complete many online bookkeeping jobs that the average business owner dreads being faced with.

Whether you need financial statements, reconciliations, tax filing, payroll, HR, or back-office services, they have industry professionals on the job. Just be prepared to pay a pretty penny for its services, especially if your company does accrual accounting.

Pros Cons
Weekly and monthly plans available Expensive if you only need basic bookkeeping features
Thorough monthly account reviews Accrual accounting plans cost more than cash-based ones
Great payroll and HR services

What Are Online Bookkeeping Services and Why Do I Need Them?

With how volatile the job market is these days, it’s little surprise that many people have started turning to the idea of running their own startups and small businesses. Of the many challenges faced by prospective business owners, bookkeeping often comes up as the most surprisingly difficult aspect of running a successful business.

Inland revenue services require all businesses to maintain strict financial records, but business accounting can be a royal pain for anyone that’s not a professional accountant.

Outsourced accounting services are a popular solution to this conundrum. Getting professional external accountants to handle your books is a popular choice, but can often be very expensive. This is where online solutions can help. Whether you want to facilitate your own bookkeeping system or outsource everything, a proper accounting service will help you get a clearer picture of your business’ well-being and growth.

Good online bookkeeping and accounting services for small businesses can allow you to efficiently deal with crucial parts of running a business such as bookkeeping, payroll, and taxation while spending less time mired in paperwork.

In order to help you make an informed choice, we’ve gathered some of the best online bookkeeping services for small business owners in 2020. Our methodology below details the evaluation process that was used in our selection.

Our Methodology

There are many business accounting apps on the market today. Quickbooks online bookkeeping services are probably the most well known, but far from the only option to consider. In order to have a fair platform for evaluating all potential candidates, we’ve come up with a few universal categories that cover the core elements of a good online accounting system.

Pricing and Value

As with any other product, one of the first things we consider when reviewing online bookkeeping software is the price. But it’s more than just the cost of the services: how much does it offer for the price compared to the competition?
Online bookkeeping companies most commonly offer subscriptions on a monthly basis, but some determine the pricing structure based on the number of monthly transactions handled, while others focus more on the total transaction value.

Core Bookkeeping Services

While most virtual bookkeeping companies try to offer unique plans and features, there are some basic functions that all serious accounting services need to provide.

At the most basic level, your online accounting software should provide a good income and expense categorization and at least one monthly reconciliation between your accounts.

Reconciliations make sure that all of your credit and bank accounts match your statements each month, so that, for example, the money leaving an account matches the actual money spent.

The other important feature that remote bookkeeping should handle is monthly reporting. Financial statement packages can include things like balance sheets, cash flow statements, and profit and loss statements. Some companies offer additional reports, such as in-depth tax summaries.

Finally, your virtual bookkeeper should be flexible enough to accommodate both cash and accrual accounting methods, as both have their advantages and work for different types of companies.

Advanced Bookkeeping Services

In addition to the core features outlined above, the best online bookkeeping services offer a variety of other useful tools. Most notably, they will take care of payroll and tax return services.

As your business expands, managing your employee payroll will start taking up more and more of your time. Services such as state and federal payroll tax payments and direct deposits for employees can really help take a lot of the tedium out of making sure both the IRS and your employees are properly taken care of.

Speaking of the IRS, good small business bookkeeping services will take care of the potential nightmare that is navigating the various state and federal tax forms as someone new to accounting. Individual and business tax returns, partnership and corporation returns, as well as estate and gift tax returns can all be part of the tax preparation packages that outsourced bookkeeping can handle for you.

Some companies go beyond payroll and tax services, though. For example, you may also get HR tools such as time tracking, medical benefits, workers compensation insurance and more. Some outsourced bookkeeping services may even cover inventory management and tracking, but don’t expect all these kinds of services to come cheap or be a part of most standard packages.

Ease of Use and Integration Options

Turning to outside bookkeeping help, whether through financial accounting services or a business accounting app, is a sign that the business owner doesn’t want to waste time and energy on some of the most tedious aspects of running a business.

Therefore, it’s important that the chosen business accounting services facilitate the entire bookkeeping process without adding additional headaches. This means that the outsourced bookkeeping and payroll services should be easy to implement and use or at least support file formats from popular accounting software such as Quickbooks or Xero.

The key idea here is that migrating your bookkeeping online and outsourcing it to professionals should be as quick and painless as possible while also allowing you to easily pick things up if you later decide to switch to another company, hire your own personal accountant, or even go back to keeping the books by yourself.

Customer Support

Whether you are using a small scale personal bookkeeping software or a fully outsourced solution backed with professional accountants, at some point you’ll need to get in touch with customer service.

Ideally, handing off your books to an online accounting business would mean that you mostly don’t have to worry about the accounting side of things anymore. That being said, it’s reassuring to know that there are professional, certified bookkeepers around to answer any questions you may have about your finances.

Top companies in the business are not only reachable through email or phone, but they also provide dedicated points of contact or even certified public accountants that can join your own team and help out.

FAQ

What does an online bookkeeper do?

Put simply, they provide bookkeeping services online, allowing you to keep your books remotely instead of visiting a physical office. This is also sometimes called virtual bookkeeping, as the bookkeeper is given remote access to software, relevant financial documents, and the company’s servers so they can work from wherever and whenever.

What is the difference between virtual and outsourced bookkeeping?

They are similar but not quite the same.

Outsourced bookkeeping most commonly refers to external companies and experts who handle your accounting needs from their own offices. As this is considered virtual bookkeeping, the two can be used interchangeably in some cases. The key difference is that virtual bookkeepers can also be your own accountants that are temporarily or permanently working remotely but are still on your company’s payroll.

What is the best program for bookkeeping?

When it comes to online business accounting software, Xero and Intuit QuickBooks are generally considered the industry standard.

Most bookkeeping companies tend to work with one or both of these programs. At the very least, they tend to work in software that natively supports importing and exporting files into formats compatible with Xero and QuickBooks.

What can I use instead of QuickBooks?

Xero is the obvious choice, but you can also go for Sage, FreshBooks, Wave Accounting, or YNAB.

Your choice will depend on how you mostly use accounting software and the size and scope of your business.

What are the advantages and disadvantages of outsourcing your accounting?

In our opinion, the choice to opt for outsourcing online bookkeeping services brings with it more benefits than drawbacks, though. Not only are outsourced professionals often cheaper, but they can also be more flexible. That being said, working on your finances with people you don’t know personally and not really understanding the math behind the numbers can be a big no no for people who love to feel like they have absolute control over everything regarding their business.