What does a bookkeeper do for a small business?

A bookkeeper keeps a complete and accurate record of everything your business earns, spends, owns and owes. In practice that means recording and categorizing every transaction, reconciling every account to its statement, keeping bills and invoices current, closing the books each month and producing the reports you run the business on. At year end, they hand your CPA a set of books that is ready for the return.

You can do all of this yourself, and plenty of owners start that way. The question is not whether you can. It is whether your hours are better spent there or somewhere else.

Every week

Most of a bookkeeper's time goes here, in small, steady pieces.

• Record and categorize transactions. Every bank and card transaction gets reviewed and assigned to the right account, not just accepted as the software suggested.
• Enter bills as they arrive. Vendor bills go into the system when they come in, with due dates, so nothing is paid late or twice.
• Send invoices and record payments. Customers get invoiced when the work is done, and payments are matched to the right invoice.
• Chase what is missing. Receipts, vendor documents, the statement from the account that is not connected.
• Flag anything unusual. A charge nobody recognizes, a customer paying the wrong amount, a vendor changing bank details.

Every month

• Reconcile every account. Bank accounts, credit cards and loans are matched to their statements, and every difference is explained.
• Review receivables and payables. Who owes you, how late, and what you owe next.
• Close the period. Post the month-end entries, review the balance sheet and lock the month so nothing changes afterward. This is what a month-end close actually involves.
• Produce the reports. Profit and loss, balance sheet, cash flow and the aging reports, delivered on a set date.

Every year

• Year-end package for your CPA. Reconciled books, a trial balance, and supporting schedules for things like loans and fixed assets.
• Contractor forms. Collecting the information the business needs to issue year-end contractor forms, for your CPA or payroll provider to file.
• Records kept the way the IRS expects. In general, the IRS says to keep records for 3 years, and employment tax records for at least 4. Its page on how long to keep records lists the exceptions.

What a bookkeeper does not do: prepare and sign your tax return, give tax advice or represent you to the IRS. That is your CPA or enrolled agent. Our comparison of bookkeeper vs accountant vs CPA covers where each role starts and stops.

Can you do your own bookkeeping?

Yes. You do not need a license to keep your own books, and good software makes the mechanics manageable. Owners who do it well have three habits: they categorize weekly, they reconcile monthly, and they never let the review list grow.

The trouble is that bookkeeping is never urgent until it is. A week slips, then a month, then the books are a project instead of a routine. That is usually when owners start looking for help, at the most expensive point to start.

What doing it yourself really costs

The software is cheap. Your time is not.

Your hours. Count the hours you spend on books in a typical month and multiply by what your time is worth to the business. For most owners, that number is larger than they expect. The time calculator on our homepage does the math for you.

Late invoices. When the owner is also the bookkeeper, invoicing waits for a free evening. Every week an invoice sits unsent is a week longer before you are paid.

Year-end cleanup. If the books are behind at year end, your CPA cleans them up before preparing the return, at CPA rates.

Decisions on stale numbers. If the books are two months behind, so is every decision based on them.

Signs it is time to hand it off

• Transactions are waiting for review in your software, and the list keeps growing.
• Reconciliations are more than a month behind.
• You invoice late because you invoice when you have time.
• Your CPA bills for cleanup every year.
• You cannot say whether last month was profitable without digging.

If you already have a bookkeeper and these signs still show up, the issue may be the role, not the routine. Our post on signs your bookkeeper has outgrown the role covers that case.

The downsides of hiring a bookkeeper

Be honest about the tradeoffs. A bookkeeper costs money every month. Someone else has access to your financial records. And a careless bookkeeper can do more damage than no bookkeeper, because errors get buried under a layer of confidence.

Each of those has a fix. Set access at the right permission level and never share your banking credentials. Hire for verified skills, not a promise, and know what to look for in a bookkeeper. And keep a short monthly review of the reports, so the books stay yours.

Where we fit

We place dedicated, degreed bookkeepers and accountants, based offshore, into US small businesses full-time on US business hours. Every operator is QuickBooks certified and most also work in Xero. Standard placement is $2,200 a month for 40 hours a week, plus a one-time setup fee, confirmed on the fit call. See the roles on our services page.