7 Best Online Bookkeeping Services for Your Business in 2021

If you have a business that generates income, you need to do bookkeeping. It’s that simple. And you know what else is simple? Letting us do the legwork for you — hence why we compiled a list of only the best online bookkeeping services. 

In this article, we’ll look at all the options at your disposal — from the best ones for small businesses to the most user-friendly. What’s more, we understand that for most new SBOs having an in-house bookkeeper is probably outside of your price range. That is why we focused mainly on online services that offered the most affordable deals.

So, ready to find a service that fits your needs at a price you can afford?

Then keep on reading!

Affiliate Disclosure

Overview — At first glance, Merritt may not look like much. But it’s that same simplicity and straightforwardness that places it among the top online bookkeeping services for small business owners. If you need no-frills, worry-free bookkeeping, you can get it from Merritt. 

The one glaring flaw in this otherwise pristine service is that it only works on cash-basis accounting. Unfortunately, that excludes a lot of medium and large businesses. 

Flat rate pricing — Merritt costs $190 per month. That’s the only price tier. You’ll find it quite fair for the services it provides as you go down this list.  

Simple catch-up price — If you need to catch up on your books, Merritt makes that simple, too. You’ll pay $140 for every month you need. And if the bookkeeping is mostly done, it costs merely $50 per month to catch up. 

CPA direct connect — Unlike many bookkeeping services online, Merritt doesn’t offer any tax preparation. However, Merritt’s team can liaise with your accountant, so you don’t need to worry about getting everything ready for tax season. 

Custom-built web interface — Although Merritt uses QuickBooks’ files to work, it created an intuitive user interface that dramatically simplifies the QuickBooks format. Namely, Merrit’s interface eliminates much of the superfluous information and produces easy-to-grasp reports.

Pros:

• Flat-rate pricing
• User-friendly dashboard
• Automated bank statement collection
• Works with your CPA for tax prep
• Streamlined onboarding process

Cons:

• Cash accounting only
• No payroll services

Overview — Bench is a relative newcomer to the online bookkeeping game, but it has quickly become well-regarded in the space. Despite headquartering its online bookkeeping services in Canada, the company currently doesn’t serve Canadian customers.   

Bench’s main selling point is how well it can scale up to meet your business’s needs. Bench experts review your plan each year and recommend adjustments to ensure that you’re getting the right level of service.

Specialized bookkeeping — With Bench, you’ll work with a bookkeeper dedicated specifically to your business. However, if your company has unique requirements, Bench can create a specialized team to ensure adequate expense tracking. It’s an added cost, but well worth it if you have specific bookkeeping requirements.

Optional tax filing — You can tack-on a Bench Tax plan and essentially have online bookkeeping and accounting services all under the same umbrella. Bench Tax plans range from $660 for personal and sole proprietorships to $1,440 for business and personal tax return bundles. Even if you don’t get on Bench’s tax plan, it can deliver tax-ready financials. 

Gusto payroll — Bench supports the Gusto platform to process payroll for an added cost. Gusto can provide full-service payroll processing, including medical, dental, vision insurance, time tracking, and onboarding. 

BenchRetro — Bench can catch you up on your books, no matter how badly they’ve lapsed. Even if you’re filing for bankruptcy or trying to prepare for IRS audits, Bench’s team of experts can offer their assistance. 

Pros:

• Dedicated bookkeeper for your business
• Easy scaling up to $1 million in expenses
• Excellent mobile app
• Easy catch-up bookkeeping going back years
• Unlimited phone support on all plans

Cons:

• Doesn’t support full accrual bookkeeping
• Proprietary software

Overview — Appropriately named, Bookkeeper360 is a service that provides comprehensive business support in addition to bookkeeping help. However, it’s by no means cheap, and it gets substantially pricier to track the higher the expenses. 

Despite the high price, you can expect high-quality, full-service accounting and bookkeeping with many useful add-ons.

US-based team — If you prefer your bookkeeping and online accounting services to be in the USA, you’re in luck with Bookkeeper360. Everyone on the team is in the US, and you’ll get a dedicated bookkeeper that will help you get set up.

Xero and QuickBooks — Until recently, Bookkeeper360 only supported Xero integration. However, as they are very much dedicated to constantly making progress and improving their services, Bookkeeper360 has just added Quickbooks to their list of advantages. This smart move earned them a higher position on our list as well.

Both apps provide good value, so if you’re already using Xero or QuickBooks, Bookkeeper360 is an excellent choice. 

Business app integration — The app integrates with many popular business management solutions. If you’re using Gusto, Stripe, and other popular tools, Bookkeeper360 can sync with those directly instead of reconciling transactions separately. 

CFO support — Bookkeeper360 offers a service named Fractional CFO that connects you with a dedicated CFO, who can help you understand and develop business processes better. Online accountants for small business owners often don’t provide enough support to really help you optimize your business. That’s where CFO services can be highly beneficial. 

Pros:

• Broad services can accommodate most businesses
• Helps you transition to QuickBooks or Xero
• Best bookkeeping app
• Provides comprehensive real-time metrics 
• Integrates with many popular business tools

Cons:

• Too expensive for a fledgling business

Overview — Bookkeeper.com isn’t the most affordable service around, but it provides a lot of extra value in the form of financial support that most other bookkeeping services don’t. Additionally, Bookkeeper.com can provide turnkey accounting services if you choose to pay for a few add-ons. 

Financial reporting — Even on a basic small business package, Bookkeeper.com experts will provide personalized business advisory based on your financials. This kind of financial advice can be invaluable for small business owners who are just starting to get the hang of it (finance-wise). 

Full tax preparation — As a part of its bookkeeping services for small business owners, Bookkeeper.com provides tax preparation help, as well as tax planning to save you money and stay compliant. 

Bill payment — You can let Bookkeeper.com take care of all your bills, which is often one of the most needlessly time-consuming parts of running a business. Bookkeeper.com will sort, categorize, and pay bills for you and enter the expenses into your books. 

Custom plans — Bookkeeper.com can work around your needs to add or exclude the tasks you want its team to handle. If you know what you need already, you’ll have no problem acquiring it. And if you’re unsure, they’ll help you decide what to include.

Pros:

• Comprehensive online accounting service
• Includes simple to in-depth financial advisory
• Optional general business consulting
• Offers bill pay solutions
• Monthly performance reports with KPIs

Cons:

• Doesn’t provide catch-up bookkeeping
• No mobile app

Overview — Sunrise is a free online accounting services app owned by Lendio, the small business loan marketplace. The app itself is intuitive, easy-to-use, and a valuable asset for just about any small business owner. 

Plus, the bookkeeping services it offers make it an outstanding all-around option to keep track of your cash flows, expenses, and tax liabilities.

In-depth support — Sunrise’s bookkeepers provide one-on-one support to help you grasp your bookkeeping beyond just putting numbers into boxes. Most of the best online bookkeeping services provide you with a bookkeeper to work with, but many fail to go beyond basic bookkeeping.  

Monthly reporting — You’ll receive monthly updates from your bookkeeper in the form of personalized reports. These include balance sheets, profit and loss statements, etc. You’ll also receive insights into your spending and how to optimize financial areas potentially.

Tax assist — Although Sunrise isn’t an end-to-end online bookkeeping and tax service, you’ll still get a guide to help you get your tax documents in order and ready to send to your CPA. Additionally, you can use the app’s tax estimator to check your tax burden in advance and plan accordingly. 

Loan options — As a Lendio product, Sunrise can help you compare your small business loan options from dozens of lenders relatively quickly. And you can apply to several loan providers with a single application, too.

Pros:

• Personalized financial support on all plans
• Tax planning and estimator included
• Bookkeeping services aren’t required to use the app
• Create and track invoices for free
• Monthly financial wellness checks

Cons:

• Only supports up to 500 transactions
• No payroll services integration

Overview — Intuit’s QuickBooks Live Bookkeeping is an add-on service for QuickBooks Live users to help manage their books. It would probably be the best online bookkeeping service if it weren’t for the fact that it’s not a standalone offer. You must be a QuickBooks Live user to have access to it. 

Easy onboarding — The feature that stands out the most when it comes to QuickBooks Live Bookkeeping is how easy it is to get started. Since you’re already a QuickBooks user, the company matches you with a bookkeeping team within minutes of signing up. 

You can then schedule a screen-sharing session with your primary bookkeeper, who will explain everything you need to know. 

Setup session — If you need in-depth assistance to set up QuickBooks, you can add that to your bookkeeping plan. For $50, you’ll get a one-time session where you’ll learn to set up your accounts & charts and connect your bank accounts and track things like credit card transactions. 

Affordable full-service accounting — As a QuickBooks Live user, you’re already using one of the best online accounting services. Adding bookkeeping from Intuit is the most cost-effective way to solve all your accounting problems, including tax preparation, payroll, time tracking, etc.

Pros:

• Extremely user-friendly service
• Wide range of app integrations
• Receipt capture and expense matching
• Comprehensive setup session optional
• 30-day free trial

Cons:

• Must be a QuickBooks Live user
• No tax filing

Overview — Xendoo only started in 2017 and is trying hard to elbow its way into the bookkeeping online services space. That’s great news for you because it’s still using penetration pricing, offering a lot of value for money.

If you have less than $20,000 in expenses, you can get started for as little as $175 per month. Getting a dedicated financial team for that price is a true bargain.

QuickBooks and Xero integration — Xendoo works with both QuickBooks and Xero through and through. Hence, you don’t have to compromise on the accounting software. It also integrates with the most popular payment gateways, ecommerce platforms, and business management software. 

Tax prep and filing — Xendoo offers full-service tax solutions for any type of business. That can save you a lot of time you’d otherwise waste looking for “bookkeeping services near me,” especially if you’re trying to find tax prep assistance as well. And if you bundle bookkeeping and tax prep with Xendoo, chances are you’ll end up paying less than a CPA would charge. 

Frequent reporting — On its basic plan, Xendoo delivers reports every 20 days to help you gauge your financial standing. That goes down to every 15 days on the next tier and down to five days on the highest price tier. 

Poor scaling — Xendoo is a superb bookkeeping and online accounting service for small business owners, but it doesn’t scale particularly well. If you need to track more than $60,000 in expenses, there are more affordable options out there.  

Moreover, it’s best for cash-basis accounting. Xendoo does offer modified accrual basis services at higher price tiers, but then again, there are better options if you use accrual.

Pros:

• Fair price points for small business needs
• Flat fee for catch-up bookkeeping
• Tax filing optional
• Tax advice included in most plans
• Financial reports on a frequent schedule

Cons:

• Scales poorly
• Doesn’t provide true accrual bookkeeping

Bookkeeping isn’t all that difficult. Yet, it’s very time-consuming. And if you get things wrong, it can lead to a cascading series of events that you have to fix later. 

The best way to figure out your business’s bookkeeping needs is to do your own bookkeeping for a while. But, unless you’re ready to invest many hours each week reconciling transactions, that’s not an optimal solution. 

Instead, we’re going to help you understand all the key points necessary to ensure you’re making the right decision. 

It’s all in the guide below, so let’s get started. 

What’s the Difference Between Bookkeeping and Accounting?

You’ll often hear these two terms used in the same conversation without clearly stating where one ends and the other begins. 

Our online bookkeeping services reviews cover some options that include accounting help, but the focus is on bookkeeping. 

The truth is: there’s a lot of overlap between accounting and bookkeeping. But you can think of bookkeeping as a more day-to-day operation, whereas accounting has more to do with an eagle’s-eye view of financial affairs. 

In practical terms, bookkeeping means logging all your business transactions, assigning them to the correct accounts, and reconciling them at the end of each reporting period. 

On the other hand, an accountant will typically use the data generated from bookkeeping. Accountants generate insights and deductions about the financial health of a business and strategies for future actions. 

Accountants can do both bookkeeping and accounting, but the tasks are different. 

Accounting Method

The best outsourced accounting services usually provide your choice of cash- or accrual-basis accounting methods. But that doesn’t mean you need to choose one that offers both. 

If you’re confused about these terms, here’s a brief description:

• Cash-basis accounting refers to a bookkeeping method that records income when cash is received. So if you sell goods or services today, but you’ll get paid at a later date, that income doesn’t go into your accounts until you receive payment. 
• Accrual-basis accounting records income as soon as goods or services get delivered to the end-user. Even if you won’t receive payment (say) until next year, the expected income goes into the books. 

The accrual method creates a more holistic financial picture of a business’s financial health since it includes receivables and payables. But it’s usually more complicated to track and bookkeeping online services tend to charge more for it. 

The cash-basis method is more straightforward but fails to account for payables, which could mislead you into thinking you’re doing well when there’s a lot of invoices floating around waiting to collect payment.

If you run a small business and don’t offer payment terms, cash-basis is the way to go. You get paid at the same time you deliver, so there’s not much reason to use accrual accounting. 

However, if you’re a growing business and you offer flexible payment terms, it might be a good idea to invest in a bookkeeping service that can at least provide modified accrual accounting.  

Accounting Software

Another essential element to factor into your decisions when reading online bookkeeping service reviews is the software it uses. In theory, most accounting software does the same basic thing — keep track of your accounts. 

But in practice, there are two leading players — Xero and QuickBooks. 

So, why does it matter?

Simply because you’re not working in a vacuum. 

Most accountants, bookkeepers, and other financial professionals use one or the other.

Chances are you’ll have to share your financials with someone sooner or later. That may be your CPA or another bookkeeping service. So, it helps if you can present them in a way they can work with. 

That said, using Xero or QuickBooks is not mandatory. If you plan to stick with one online small business accounting services provider for the foreseeable future, it won’t matter much. But if you use an outside CPA, make sure the service provider can directly communicate with them to streamline any financial reporting. 

Moreover, most of the better bookkeeping services can transfer your financials into the software they use. It may incur an additional one-time fee, but it’s usually not unreasonable. 

Consider How Your Business Will Grow

Every one of the online bookkeeping services we review here has limits to either the number of transactions it handles or expense limits. 

Rather than simply picking the cheapest one and calling it a day, think about whether the service can grow with your business. 

If your business works with big-dollar goods or services, transaction-based online bookkeeping will give you a lot more bang for your buck. In contrast, if you move a lot of small items, expense limits are more appealing. The best online bookkeeping services for law firms will not be the same as the best options for an ecommerce business for this very reason. 

For instance, Bookkeeper360 costs $359 a month, whether it’s tracking $1,000 in expenses or $27,000. It doesn’t take a financial guru to realize which provides better value. 

Generally speaking, you want a service that can handle your current needs and has breakpoints in its service plans that can more or less match how you expect your income to evolve. 

Alternatively, a service like Merritt Bookkeeping charges a flat fee regardless of your financial activity. 

Additional Services

Bookkeeping is relatively straightforward, but it’s only one facet of what your business needs. If you have the option of bundling several tasks under one service, you’ll usually be better off than tying together many smaller providers. 

Catching Up On Your Books

If you’re weeks, months, or even years behind on your bookkeeping, you’ll need to get caught up before it makes sense to commit to bookkeeping services online. 

In that case, your best bet is to look for a bookkeeping service that can do the catching up for you. Bringing your books up to date will carry an additional cost, but don’t let it be the thing that stops you from starting. 

Tax Preparation and Filing

Getting tax-ready financials from your bookkeeping service provider is non-negotiable. If it can’t offer that, don’t bother. 

However, some services give you the option to bundle tax filing with your bookkeeping. Unless you use a CPA for your tax filing, this kind of arrangement is usually a good idea. Since the bookkeeping provider already has access to your financials, it’s often the path of least resistance. 

Running Payroll

Payroll is another tedious but necessary process many online bookkeeping and accounting services can help streamline. 

Whether the bookkeeping integrates with another provider (Gusto is a popular option) or has in-house payroll services, this is often a great value add.

Whether it’s brick and mortar or online, outsourcing bookkeeping services is a great way to save time and money for any business. And until your business graduates to in-house bookkeeping, it’s probably the most accessible way to keep your books up to date. 

In all likelihood, one of our top picks in this article will be suitable for just about any business. Just keep three main criteria in mind:

1. Your goal is to create less work, so don’t pick a service that requires too much input from your end. 
2. Don’t worry if you’re unsure about exactly what you need; schedule a call with your chosen service and start asking questions. 
3. Cheaper doesn’t always mean worse for you; you can save yourself a lot of money by picking the optimal service provider, like the one(s) above.