When they’re just starting out, a lot of small business owners use spreadsheets or accounting software to manage their books. Then, they start falling behind. Or they make a few errors that cost them money. Or they lose track of important records.
At that point, most realize it’s time to seek professional help
In the old days, the only option was to hire a freelance bookkeeper or traditional bookkeeping firm. But now, with the advent of virtual bookkeeping solutions like Bench, you’ve got a few different options.
We’ll look at how traditional bookkeepers and Bench compare, so you can choose the option that’s right for you.
Hiring a traditional bookkeeper
A traditional bookkeeper handles all of your bookkeeping for you.
There’s a number of ways to get all your financial info to your bookkeeper. That could mean emailing them your bank and credit card records every month, sharing access to accounting software that tracks your transactions, or driving to their office on a regular basis to hand off your records.
Since every business is different, any qualified bookkeeper should be willing to adjust to your unique setup. When you first start working with a bookkeeper, they’ll consult with you about your expenses to get a better idea of how to categorize them. The longer you work with a bookkeeper, the more adapted they’ll be to your business, and the less often they’ll need your input.
Once they’ve categorized your transactions, your bookkeeper will use them to generate financial statements that tell you how money is moving in and out of your business.
Your bookkeeper will also reconcile your bank statements on a regular basis, so you can be sure that the amount of money reported on the books is the amount you have in the bank.
Business records are important down the line for various reasons—from protecting yourself in case of an audit, to preparing to sell your business. A bookkeeper will hold on to and organize all essential paperwork.
If you have questions about your finances, any bookkeeper worth their salt should be able to answer them. But their ability to help is affected by a number of factors—like the time of year (tax season is busy for bookkeepers), how many clients they have, or whether they need to take vacation or sick leave. Be prepared for delays, occasionally.
Easy tax filing
At the end of the financial year, your bookkeeper should be able to provide you with an info package summarizing all your business’s financial activities for the year. When you deliver this package to an accountant, they can use it to file your taxes.
Outside of month-to-month bookkeeping, your bookkeeper may handle other tasks, including:
Paying supplier or contractor invoices
Helping monitor your debt
Maintaining your annual budget
Watching for changes or strange activity on your accounts
Handling catch-up tasks, like bringing your books up to date
Bookkeepers typically charge by the hour. The more complex your business is—the more transactions and categories it uses—the longer it will take for your bookkeeper to do their job. And the bigger your bill will be.
You can expect to pay $30–$50 per hour to work with a trained professional on a contractual basis. If your business is small, they may ask you to pay a set minimum fee every month.
Who it’s for
Hiring a traditional bookkeeper is a good choice if your business demands a lot of paper records—physical receipts and work orders, for instance. In that case, you’ll want to find a local bookkeeper who can physically meet with you and go over your records.
On the other hand, if most of your records are digital—you use online banking, and accept credit card payments—you may be better off using a virtual bookkeeping solution like Bench.
Once your business has scaled to over $5 million in annual revenue, or moves to accrual basis accounting, it’s time to look at hiring an admin assistant to do your books.
Working with Bench
Bench gives you a team of bookkeepers who handle your bookkeeping for you, and an intuitive app to track your finances. Bench is a good choice for a small businesses whose annual revenue is below seven figures.
Once you sign up with Bench, you get a team of bookkeepers who handle your month-to-month bookkeeping tasks. At the end of the year, they prepare a Year End Financial Package for you. That package has everything your accountant needs to file your taxes.
When you use Bench, it’s almost as if you were working remotely with a freelance bookkeeper. Except you have an entire team at your disposal, so you don’t need to worry about sudden leaves of absence. And the Bench app lets you quickly send messages and upload files if you’re on the go and don’t want to have a phone call.
Automatically imported transactions
Once you set up an account, Bench connects to your bank, merchant processor, and credit card company. All your transactions are imported automatically. In the event that you make a cash transaction, you can take a photo of the receipt with your phone and send it to your bookkeepers.
Transactions categorized by your team
As your transactions are automatically imported, your Bench team categorizes them for you. This is similar to what a freelance bookkeeper would do.
And, similar to a freelance bookkeeper, your Bench team will work with you to get to know your business. If they’re not sure how a specific transaction should be categorized, they’ll message you.
The more time your team spends working with you, the better they’ll know your books—and the less often they’ll need to get in touch.
Software to track your finances
Bench provides simple visual reports that you can access online or from the Bench app. These reports can help you understand your expenses better (where your money is going), and other financial trends to help you run your business more effectively.
If you have any questions, you can call your bookkeeper, send an email, or send a message any time using the Bench app. You’ll always get a response within 24 hours, even if your regular bookkeeper is sick or away.
All the financial statements you need
Your Bench team delivers your monthly financial statements, including your income statement, balance sheet, and top 10 expenses report. Want to learn more? Check out Real Business Decisions You Can Make Using Bench Financial Statements.
Year End Financial Package
Bench provides you with a Year End Financial Package containing a summary of your finances for the year. Your accountant uses that info to prepare your tax return.
Your Bench Year End Financial Package includes:
Access to accountants and tax experts
Your Bench bookkeeping team can work one-on-one with your accountant to make sure they have all the information they need to file your taxes at the end of the year. Your accountant can also log in to your Bench account and have a look themselves.
Accounting support through our partners
If you don’t have an accountant, we can connect you with one of our partner accountants, who will help you file your taxes.
If you’ve been falling behind on your bookkeeping, we can get you caught up. No matter how far behind you are, for an additional fee we can bring your books up to date, fast—one of the perks of having a big team of experienced bookkeepers who work together.
Whether Bench is less expensive than hiring a freelance bookkeeper will depend on how complex your business is, and how much work a freelancer would need to do to each month to keep your books up to date.
However, Bench charges a flat monthly rate, as opposed to the hourly rate charged by most bookkeepers. That makes it a lot easier to anticipate how much your monthly bookkeeping will cost. And we don’t charge you for support time. Ask away!
Who it’s for
If you like the convenience of the cloud but you want the professional support of real humans, Bench is a good choice.
There are a few types of businesses that aren’t a good fit for Bench, though. If your business depends on accrual basis accounting, doesn’t use online banking or payments, or earns over $2-3 million annually in revenue, you might be better off hiring a local bookkeeper.
|Solution||Overview/Features||Who it’s for|
|Software/spreadsheets||Relatively inexpensive, quick-and-dirty solution
Adapts to most types of businesses
May give you the option of automatically importing transactions and bank balances
Price: $9-70 per month
|Entrepreneurs who are just starting out with a new business, and aren’t ready to bring in professional help
Disciplined, finance-minded founders with the time to dedicate to bookkeeping
|Traditional bookkeeper||Professional who handles your bookkeeping for you
Will work with you to learn the specifics of your business
Variable monthly charge, depending how complex your business is
Price: Variable, according to the hourly rate plus the complexity of your books
|Entrepreneurs who want professional support
Businesses that depend on accrual accounting
|Bench||Combines benefits of cloud-based software and professional support from a team of bookkeepers
Automatically imports transaction info from your payment accounts
Flat monthly fee based on the size of your business
Price: $249-479 per month
|Entrepreneurs who don’t have the time or expertise to handle their own books
Entrepreneurs who want professional support combined with online access to financials
Business that keep digital records and use online banking, as well as cash basis accounting
Curious what it’s like to have Bench working for you? Take a quick guided tour with an inside look at how Bench does your bookkeeping.