Spreadsheet fatigue, checking account strain, chronic bouts of “Now, where did I put that receipt?” All symptoms of inefficient bookkeeping.

If small business finances are eating up hours and stressing you out, it’s time for a change. Here’s how to handle bookkeeping in the most efficient way possible — so you spend less time crunching numbers, and more time helping your business thrive.

What is bookkeeping?

Bookkeeping is the day-to-day process of tracking money as it enters and leaves your business. 

That means you do two things:

  1. Record and categorize transactions

  2. Create financial reports that tell you the state of your business

When you’re on top of your bookkeeping, you can keep tabs on exactly how much cash you have to work with, plan for the future, and file taxes quickly, accurately, and on time. 

Bookkeeping vs. accounting

Bookkeeping tracks your finances both day-to-day and month-to-month. Accounting looks at the big picture — think yearly. A qualified accountant helps you plan for the future of your business, and make adjustments to help you save money.

To get help from an accountant, you need good bookkeeping records. The more comprehensive, organized, and up-to-date your bookkeeping is, the easier it is for your accountant to help you out. And fewer hours of work for them means less expensive accounting for you.

Bookkeeping options

Ready to kick off your bookkeeping journey? You have three options.

  1. Accounting software helps you do your own bookkeeping, with help from a program.

  2. A traditional bookkeeper will take care of your bookkeeping for you for an hourly rate.

  3. Online bookkeepers like Bench charge a monthly flat rate, handling your bookkeeping for you while giving you intuitive software to track and manage your finances.

We’ll cover all three options below.

How to handle bookkeeping

The three bookkeeping options — software, a traditional bookkeeper, and online bookkeepers — each come with their own strengths and weaknesses. The table below gives you a quick overview. 


Dollar cost

Time cost

Pros and cons

Accounting software

$9 - $70 per month



  • Low dollar cost

  • Good way to learn bookkeeping hands-on


  • High time cost

  • Learning curve

  • Potential errors

  • No personal support

Traditional bookkeeper

$20 - $40 per hour, usually with a minimum monthly cost



  • Fairly low time cost

  • Face-to-face interaction

  • Protection from errors

  • Good with paper records


  • May need you to deliver bank statements, etc. by hand

  • No software interface

  • Variable monthly rates

  • May be hard to contact during busy season

Online bookkeepers

From $119/mo.



  • Automatically imports bank and credit statements

  • Intuitive online interface

  • Monthly financial reports

  • Protection from errors

  • Bench offers tax filing


  • Doesn’t work well with paper recordkeeping

  • May feel unfamiliar if you’re not used to using online services

Accounting Software

With accounting software, you enter your business transactions and categorize them yourself. The software separates them into different sections, and can automatically generate financial reports for you.

While accounting software streamlines DIY bookkeeping, it doesn’t handle it for you — meaning you’ll still need to spend time every month entering and categorizing transactions. And, if you make any mistakes, they’ll result in inaccurate books.

Dollar Cost

Xero, one of the most popular software options, ranges from $9 to $70, depending on the complexity of your books and which features you opt for.

Time Cost

The amount of time you spend bookkeeping will depend on how many transactions you need to enter each month, and how complex your business is. For a simple solo business, you should expect to spend at least several hours every month. 



Who It’s Best For 

Accounting software is a good choice if you’re just getting your business off the ground, and you need basic bookkeeping functions to help you stay on track until you can hire a professional. 

Traditional Bookkeepers

A traditional bookkeeper is a local professional who does your bookkeeping for you. They may work independently as a freelancer, in partnership with other bookkeepers or accountants, or as part of a large national firm.

One benefit of hiring a local, traditional bookkeeper is that you can meet them in person. So, if your business relies on a lot of paper financial documents, that makes it easier to share them with your bookkeeper.

Dollar Cost

Most bookkeepers charge between $20 and $50 per hour, often with a set monthly minimum. The amount of time they need to spend on your books each month will depend on the complexity of your business.

Time Cost

With any bookkeeper, you should be prepared to spend a couple of hours each month—in case they need more information before categorizing transactions, or you need to deliver hard copies of transaction records.



Who It’s Best For 

Small businesses ready to have their bookkeeping handled professionally. Traditional bookkeepers are especially suited to businesses with lots of paper records.

Online Bookkeepers

For this example, we’ll be using Bench, the largest bookkeeping service in North America.

Bench gives you a team of bookkeepers who do all your bookkeeping for you. They automatically import transactions, categorize them, and prepare monthly financial statements for you. You can track your finances and communicate with your team through the Bench app.

Dollar cost

Bench starts at $119 per month (Starter), ranging up to $299 (Corporate.)

Time cost

Your team categorizes your transactions for you. But, if an unusual transaction shows up, they may ask you to categorize it in the Bench app. You should expect to spend less than one hour per month categorizing stray transactions. The longer you’re a client, and the more familiar your team becomes with your books, the less likely they’ll need to ask your opinion.



Who It’s Best For 

Bench is a good choice for any business that’s grown beyond the just-a-hobby phase. It’s especially suited to business owners already familiar with handling banking and other back office tasks online.