Bookkeeping guide

The small business bookkeeping guide: the basics, the monthly routine, and what changes by industry.

Good bookkeeping is not complicated, but it has to happen every month. This guide covers the basics every US business needs, the routine that keeps the books accurate, and the extra rules that apply in specific industries, with links to our detailed guides.

Book a free 30-minute call The basics

The basics

Five Things Every Business Needs

Separate business accounts. One bank account and one card for the business, never mixed with personal spending.
A clear chart of accounts. A short, consistent list of income, expense, asset and liability accounts that matches how you look at the business.
Cash or accrual, chosen on purpose. Cash basis records income when money arrives. Accrual records it when it is earned. Most growing businesses, and anyone with a lender or investor, need accrual reports.
Support for every entry. Receipts, invoices and bills attached to the transaction in the software.
One owner of the books. A named person or firm responsible for closing each month on time.

The routine

The Monthly Bookkeeping Routine

Categorize bank and card transactions at least weekly.
Enter vendor bills and send customer invoices as they happen.
Follow up on overdue invoices and schedule bill payments.
Record payroll and reconcile the payroll liabilities.
Reconcile every bank, card and loan account at month-end.
Post accruals, prepaid and depreciation entries, and review the balance sheet.
Produce the profit and loss, balance sheet and cash flow report, then lock the month.

The full list is in our month-end close checklist. For who does this work, see what a bookkeeper does and what a full-charge bookkeeper is.

The software

QuickBooks Online or Xero

Most US small businesses run on QuickBooks Online or Xero. Both handle the monthly routine well. The better choice depends on your industry, your accountant, the apps you need and how many entities you run.

We compare them in Xero vs QuickBooks for US businesses. If you are still on QuickBooks Desktop, read what the Desktop changes mean for you.

Industry guides

Industry-Specific Bookkeeping

The routine above applies everywhere. Some industries add their own rules on top of it:

Industry	What is different
Construction and contractors	Job costing, progress billing, retainage and work in progress.
Law firms	Client trust (IOLTA) accounts with three-way reconciliation. In QuickBooks, see trust accounting in QuickBooks Online.
Nonprofits	Restricted and unrestricted funds, grant tracking and functional expenses. In Xero, see restricted funds in Xero.
SaaS and subscriptions	Deferred revenue, recognizing annual plans monthly, and metrics like MRR.
E-commerce	Marketplace payouts net of fees, inventory and cost of goods sold, and sales tax by state.
Real estate and property	One set of books per property or entity, tenant deposits, and owner statements.
Professional services	Time and project tracking, retainers, and work in progress.
RIAs and wealth managers	Advisory fee revenue, compliance-ready records, and separating firm and client money.
Groups of companies	Intercompany balances and consolidation. With foreign entities, see multi-currency bookkeeping.

Getting help

When to Get Help

Most owners get help when the books fall more than a month behind, when a lender, investor or CPA asks for reports they cannot produce, or when the owner is spending evenings on bookkeeping instead of the business. Our guides on when to hire a bookkeeper and what bookkeeping services cost cover the decision.

Where we fit

Monthly Bookkeeping in QuickBooks and Xero

Logiframe keeps the books for small and midsize US businesses in QuickBooks Online and Xero. We follow the routine in this guide every month, apply the rules for your industry, and deliver closed, reconciled books and monthly financial statements on a set day. We run payroll only in QuickBooks Workforce and Gusto. Your CPA keeps tax returns and tax advice.

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Questions

Common Questions

What are the basics of small business bookkeeping?

Separate business accounts, a clear chart of accounts, a deliberate choice of cash or accrual basis, support attached to every entry, and one person or firm responsible for closing each month.

How often should a small business do its bookkeeping?

Categorize transactions at least weekly, and reconcile every account and close the books monthly.

What is industry-specific bookkeeping?

The extra rules some industries add to the standard routine, such as job costing in construction, trust accounting for law firms, restricted funds for nonprofits, and deferred revenue for SaaS businesses.

Should I use QuickBooks Online or Xero?

Both handle small business bookkeeping well. The choice depends on your industry, your accountant, the apps you need and how many entities you run.

When should a small business hire a bookkeeper?

Usually when the books fall behind, when lenders, investors or a CPA need reports you cannot produce, or when bookkeeping is taking the owner away from running the business.

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13+ years in practice Across accounting outsourcing, ERP and accounting software work.

Where to Go Next

Guide Month-End Close Checklist The close steps, in order. Guide What Does a Bookkeeper Do? The work, week by week. Comparison Xero vs QuickBooks Which fits a US business. Service Bookkeeping Packages What is included, and what it costs. Cost guide What Bookkeeping Services Cost Typical pricing models and ranges. Insights All Insights Guides on bookkeeping, software and costs.

Want the books kept for you?

Tell us your industry, which software you use and where the books stand. We will tell you what monthly bookkeeping would look like.

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Insights

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