Bookkeeping is the practice of organizing, classifying and maintaining day-to-day business financial records.

A bookkeeper records daily transactions and creates financial statements that help inform a company’s budget, forecasts and strategic decisions. Bookkeepers may manage accounts payable, accounts receivable, payroll, tax prep and other core functions.

Bookkeeping services help businesses manage their finances with the help of an independent bookkeeping professional. These services can help you with some or all of your bookkeeping needs, as is the case with a full-charge bookkeeper.

With outsourced bookkeeping, businesses can hire a remote professional through a talent marketplace. This eliminates the effort required to post a full-time job listing, conduct multiple hiring rounds and train the professional. It also eliminates full-time employment costs. The bookkeeper and the company align on a statement of work, and the business pays the bookkeeper as a 1099 employee either directly or through their marketplace platform.

When outsourcing with Paro, we match your business with the best-fit expert via our proprietary AI matching tool. Then, we support you in your project’s success and assist from kickoff to project completion with touchpoints from account management along the way.

Most small business and startup founders will either handle financial record keeping themselves or hire a bookkeeper for their business during their initial stages. However, as the business grows and finances become more complex, executives can benefit from an accountant that quickly takes the tax and financial work off their hands and offers helpful insight into the company’s core strengths and weaknesses.

Bookkeeping helps you keep your business in line with tax and legal regulations while also allowing you to get a deeper understanding of your financial management. By recording and categorizing transactions and building the appropriate reports, you can see if you’re spending too much money and where you have opportunities to improve profitability.

A bookkeeper plays a lead role in organizing daily financial processes, producing important financial statements and presenting data for future uses like budgeting or fundraising. They may also provide the foundation for a more robust finance team once strategic analysis and forecasting become a priority.

At a high level, accounting professionals' main goal is to keep and interpret financial data to help management make informed business decisions. Unlike bookkeeping, whose focus is on collecting, organizing and recording financial data, accounting analyzes the data to make recommendations for overall business strategy. In addition, some accountants will work seasonally to prepare company tax returns and ensure taxes are paid accurately and on time.

Accounting reports provide visibility into key performance metrics, the cost of goods, cash availability for reinvesting or expanding and more. Well-informed decisions rely on studying the company's financial status through accurate reporting.

Small businesses must especially pay close attention to their cash flow in order to fund their daily operations. At this stage, bookkeeping is important to get visibility into the company’s revenues and expenses through basic financial statements and reporting. Accounting and bookkeeping services can help small business owners with back-office tasks and provide information on how their cash is flowing in and out of the business.