What the heck is bookkeeping anyway?
Do you need bookkeeping services or accounting services? Here we’ll discuss the difference, and how we approach the work in each case.
Want to learn more about what we can offer? First, let’s get some common language. Here’s a few terms that get thrown around what they mean to us!
Bookkeeping - The process of systematically recording your business transactions from banks and credit cards so we can run cash basis reports for business operations and taxes.
Accounting - All the things you know and love about bookkeeping, but also making adjustments for things that might need to be presented differently from how they clear the bank, like accruing expenses, managing inventory, or matching up POS systems to payment clearings.
Budgeting - Developing a financial plan for what we’d like to see happen in the future.
Forecasting - Modeling out what we think will actually happen in the future, so we can anticipate cash or profitability issues.
Cash Management - The process of actually paying the bills, running payroll and planning cash flow on a weekly or biweekly basis.
AR Management - Sending invoices, corresponding with customers and following up on receivables.
Vendor Management - Corresponding with vendors to verify and clarify bills, manage W-9’s and resolve issues.
OK great, so what services do you offer?
Every relationship is different, but here’s a summary of the types of bookkeeping and accounting relationships we offer, and a rough idea of their annual cost:
Clean-up bookkeeping - $ (typically $250-500 per month of cleanup) If you’ve neglected your books for a while and just need a quick tidy up for taxes, this is your most economical option. Our focus will be efficiency, so we’ll try to solve questions categorically rather than individually. Also if you’ve been using your accounting software for invoicing or bills, but are then having us separately do the bookkeeping, we’re not going to reconcile your receivables or payables unless you specifically ask us to, as it’s not needed for cash basis taxes. This is our simplest and most cost-effective service. Generally no reports are provided, we’re just getting things in order for taxes.
Quarterly bookkeeping - $ Fixed agreement, typically $300-500/M If you know you’ll need your books in order by the end of the year but would like us to look at it on a regular recurring schedule, or need that bookkeeping done for estimated tax planning, this is your best option. We’ll agree on a regular interval, and similar to the above, no reports will be provided unless specifically requested, but we’ll usually end up chatting about the profit because this generally goes hand in hand with regular tax planning services as well.
Quarterly accounting - $ Fixed agreement, typically $500-750/M If you need reports on a quarterly basis and/or have POS system to tie out, Inventory, accruals or other situations where just the bank feed activity won’t give us the picture we need, then this is the next level of service that will address those needs. Clients get a quarterly financials package generally by the end of the month following the close of the quarter.
Monthly accounting - $ Fixed agreement, typically $1K-3k/M In addition to the regular accounting, our monthly clients also receive a customized report package based on the metrics we’ve agreed to track, and for most we also prepare budgets and forecasts for both cash and profitability depending on the clients needs. Monthly clients also have a regularly scheduled meeting in the second week of the month to review financial performance, check on the overall health of the business and review the upcoming forecasts and budgets to anticipate issues.
Cash Management - $ Fixed agreement, typically $2.5k-6K/M We only take on a select number of clients for cash management services who are either funded startups or businesses who keep healthy operating reserves. Our cash management services include everything in the monthly accounting package, plus weekly cash/AR/AP reporting, paying bills, and in some cases vendor management and AR management. This is a highly customized service for the needs of the business.
Great, so which one is right for me?
Freelancers - If you’re ready to move on from google sheets and scrambling at the end of the year, QB online is a great starting point. Having us do your books like be a little overkill, but if you decide to do your accounting yourself, here are the things we look for to determine if you’ve got good books.
Owner operated S-corps and Partnerships - This is the level where bookkeeping becomes a bit more important. Whether we do your books or not, we’d recommend using a proper accounting software like Quickbooks that can reconcile accounts and generate basic financial statements. For clients looking to use our services, we typically recommend a minimum of a quarterly bookkeeping relationship for service based businesses, or a quarterly accounting relationship for ecommerce or other more involved business types.
Established business with revenue or funding of 1MM and higher - At this level, you’re not just getting taxes done, you’re looking for insights into your business, so we’d recommend a monthly accounting relationship. We’ll work with you to develop appropriate forecasts and budgets and have a monthly meeting to discuss business performance against targets and overall strategy. In certain cases, we can also discuss cash and AR management, but we’re very selective about taking those clients on.
Can I still work with you if I get my books done by another service?
Of Course! There are a number of ways to get your books done, and we know what we don’t always have the availability to take on new bookkeeping clients so we’ve put together a page explaining what we look for in a good set of books, with a few options on ways to get that accomplished.
Hopefully that helps you get a clearer sense of what you might need to keep your books in order and how we can help! Still not sure? Send us a message and we can discuss your options!
Ben & Team