Community Q&A
Common bookkeeping and accounting questions, answered
A curated library of 86 questions about bookkeeping, payroll and tax in the US, UK, Australia and Canada — with concise summaries, detailed explanations and official sources.
86 questions
Warranty replacement asset records · AU
What bookkeeping is needed when business equipment is replaced free under warranty?
Keep the warranty documents and link the replacement to the original equipment record. Do not record a purchase payment that never occurred. Update identifying details and ask your accountant whether the replacement requires any asset, depreciation or tax adjustments.
Non-cash business exchanges · AU
How should an Australian business record a barter exchange when no money changes hands?
Document and record both sides of the exchange rather than leaving it out because there is no bank payment. Agree a supportable value, identify what each party supplied and use a documented settlement process. Ask your adviser to confirm valuation, recognition and GST treatment.
Employee-paid business purchases · AU
How do I record an employee reimbursement without counting the expense twice?
Record the approved business purchase once, with an amount owed to the employee. Match the reimbursement payment against that amount rather than recording another expense. Keep the supplier receipt, business purpose, approval and payment reference together.
Hiring
How much does a bookkeeper cost per month?
Outsourced monthly bookkeeping for a small business typically costs $300–$1,500 per month (about £250–£1,200, A$450–A$2,200 or CA$400–CA$2,000). Price depends mainly on monthly transaction volume, the number of bank and card accounts, payroll and how much reporting you need.
Hiring
Should I outsource my bookkeeping?
Outsource when bookkeeping takes you more than a few hours a month, your books are behind, or you need reliable reports for tax, lenders or investors. Compare the full cost and scope with an in-house hire; savings vary by business and provider.
Hiring
Can I hire a remote accountant in another country?
Yes. We support remote accounting and bookkeeping in QuickBooks Online, Xero, Odoo, Nexusaifirst and Zoho, subject to your software setup and secure access arrangements. Choose a provider who knows your country's rules (sales tax, VAT, GST/HST or BAS) and who works alongside your local CPA, chartered accountant or tax agent for filings.
Hiring
What is included in monthly bookkeeping services?
Monthly bookkeeping normally includes transaction categorisation, bank and credit-card reconciliations, accounts payable and receivable tracking, a month-end close and monthly financial statements.
Hiring
Is it cheaper to hire an accountant or a bookkeeper?
A bookkeeper is cheaper for day-to-day recording and reconciliations; an accountant costs more but handles tax planning, statutory accounts and advice. Most small businesses use a bookkeeper monthly and an accountant or tax preparer at year-end.
Hiring
What should I look for when hiring a bookkeeping firm?
Look for experience in your country and industry, certification in your accounting software, fixed monthly pricing, a clear month-end deadline, references, and documented data-security practices.
Hiring
How do I switch bookkeepers without losing data?
Give the new bookkeeper user access to your accounting software, request the prior bookkeeper's reconciliation reports and working files, and switch at a month-end. Keeping your own subscription helps preserve access, but check exports, attachments and opening balances during the handover.
Hiring
Do I need a bookkeeper if I use accounting software?
Software automates data entry but doesn't check it. Bank feeds miscategorise transactions, duplicates slip through and reconciliations get skipped. A bookkeeper reviews and corrects the data so your reports and tax returns are accurate.
Hiring
How many hours a month does bookkeeping take?
A small service business with under 100 transactions a month needs roughly 3–6 hours; businesses with 300+ transactions, payroll or inventory often need 10–20 hours. Specialists are usually faster than owners doing it themselves.
Hiring
Is it safe to give a bookkeeper access to my bank account?
Bookkeepers don't need your bank login. Use authorised bank feeds and named software accounts with suitable permissions. Check access rights and keep payment approvals under your control.
Hiring
What is a virtual bookkeeper?
A virtual bookkeeper works remotely using cloud accounting software, secure document sharing and video calls. The service is the same as a local bookkeeper, often at a lower cost and with faster turnaround.
Hiring
When should a small business hire an accountant?
Hire an accountant when you register a company, take on employees, register for sales tax/VAT/GST, raise finance, or when tax and compliance start taking time away from running the business.
Problems
How do I fix unreconciled bank transactions?
Start from the last month that reconciled correctly. Match each bank line to a recorded transaction, create missing entries, remove duplicates and investigate differences. If several months are affected, a catch-up bookkeeping project is usually faster than fixing it line by line.
Problems
How do I catch up on six months of bookkeeping?
Collect bank and card statements, sales invoices, bills and receipts for the period, then reconcile month by month starting with the oldest. A specialist catch-up service can typically complete six months in one to three weeks.
Problems
What happens if my business accounts are not up to date?
You risk late-filing penalties, missed deductions, inaccurate tax returns, cash-flow surprises and difficulty getting loans or investment. Up-to-date books are also needed to file sales tax, VAT, GST/HST or BAS accurately.
Problems
How do I prepare financial statements for my business?
Reconcile every bank, card and loan account, record accruals and depreciation, review the balance sheet for errors, then run the profit & loss, balance sheet and cash-flow reports from your accounting software.
Problems
How do I manage accounts payable and receivable?
Record every bill and invoice in your accounting software, set payment terms, review aged payables and receivables weekly, chase overdue invoices promptly and schedule supplier payments around your cash position.
Problems
Why doesn't my balance sheet balance?
Usually because of manual journals posted to the wrong account, deleted reconciled transactions, or incorrect opening balances. Software normally forces a balance, so the real problem is often wrong figures in accounts like 'uncategorised' or 'suspense'.
Problems
How do I separate personal and business expenses?
Open a dedicated business bank account and card, pay yourself through salary, drawings or dividends, and record any personal spending on business accounts as owner drawings or a director's loan.
Problems
What records do I need to keep for my business and for how long?
Keep sales and purchase invoices, receipts, bank statements, payroll records and tax returns. Retention depends on country, tax, entity and record type. US income-tax records commonly have a three-year period with exceptions; UK, Australian and Canadian requirements also vary. Check the specific rule before deleting records.
Problems
How do I improve cash flow in a small business?
Invoice immediately, shorten payment terms, take card or direct-debit payments, chase overdue invoices weekly, negotiate longer supplier terms and keep a rolling 13-week cash-flow forecast.
Problems
What is a month-end close?
A month-end close is the routine of reconciling all accounts, recording accruals and adjustments, reviewing reports and locking the period so the month's numbers are final and reliable.
Software
Which is better for small businesses, Xero or QuickBooks?
Both are excellent. QuickBooks Online is the most common choice in the US and Canada; Xero is very popular in the UK and Australia. Choose based on what your accountant uses, the integrations you need and local tax features.
Software
Can an accountant manage my Xero account remotely?
Yes. Invite the accountant as a user with Advisor or Standard permissions. They can reconcile, report and prepare tax-ready data without needing your bank passwords.
Software
Can I outsource my QuickBooks bookkeeping?
Yes. Invite your bookkeeper as an accountant user in QuickBooks Online. They can manage bank feeds, reconciliations, invoices and reports while you keep ownership of the file.
Software
What is the best accounting software for a small business?
There is no single best platform for every small business. Compare QuickBooks Online, Xero, Odoo, Nexusaifirst and Zoho against your country requirements, invoicing, inventory, reporting and budget. Expert Bookkeeping Services supports all five, with the scope agreed for your edition and setup.
Software
How do I migrate from QuickBooks Desktop to QuickBooks Online?
Clean up and reconcile the desktop file, use Intuit's built-in migration tool, then review opening balances, open invoices and bills, and reconnect bank feeds. Migrating at a month- or year-end makes checking easier.
Software
Should I use spreadsheets instead of accounting software?
Spreadsheets work for the first few months of a very small business, but they don't reconcile automatically, are error-prone, and need compatible or bridging software with the required digital links for UK Making Tax Digital VAT filing. Move to accounting software once you have regular transactions.
Software
What apps integrate with Xero and QuickBooks for receipts?
Popular options include Dext, Hubdoc and the software's own receipt capture. They extract receipt data and attach the image to the transaction, which makes audits and tax claims easier.
Software
How do I connect Shopify or Amazon to my accounting software?
Use a connector such as A2X, Link My Books or the native app to post summarised sales, fees and refunds per payout. This keeps e-commerce books accurate without importing every individual order.
Pricing
What is the difference between bookkeeping and accounting?
Bookkeeping records and organises financial transactions. Accounting interprets that data: preparing financial statements, tax returns, analysis and advice. Good accounting depends on accurate bookkeeping.
Pricing
Are virtual bookkeepers reliable?
Reputable virtual bookkeepers are as reliable as local ones and often more transparent, because all work is documented in cloud software. Check experience, software certifications, references and security practices.
Pricing
How much do accounting firms charge small businesses?
Small businesses typically pay $150–$400 per hour for a CPA or chartered accountant, or $1,000–$5,000+ per year for year-end accounts and tax returns, depending on complexity and location.
Pricing
What is the average cost of outsourced bookkeeping?
Most small businesses pay between $400 and $800 per month for outsourced bookkeeping, with simple businesses below that and complex ones above. Fixed monthly packages are now the most common pricing model.
Pricing
Fixed monthly fee or hourly billing: which is better for bookkeeping?
Fixed monthly fees are easier to budget, reward efficiency and avoid surprise invoices. Hourly billing can suit one-off or very irregular work.
Pricing
How much does catch-up bookkeeping cost?
Catch-up bookkeeping is usually priced per month of backlog, often $150–$500 per month caught up, depending on transaction volume and the condition of the records.
Pricing
What is a fractional CFO and how much does one cost?
A fractional CFO is a senior finance leader who works part-time for several businesses, handling budgeting, forecasting, fundraising and strategy. Typical cost is $2,000–$8,000 per month depending on involvement.
Pricing
Is bookkeeping a tax-deductible expense?
Yes. Bookkeeping and accounting fees for running your business are generally a deductible business expense in the US, UK, Australia and Canada.
Local · US
Do I need a CPA or a bookkeeper for my small business?
Most US small businesses need both: a bookkeeper to keep monthly books accurate and a CPA or enrolled agent to file taxes and advise. Using a bookkeeper lowers CPA fees because your records arrive clean.
Local · US
What is a 1099 and do I need to file one?
Form 1099-NEC reports qualifying nonemployee compensation. The general threshold is $2,000 for payments made in 2026, compared with $600 before 2026; exceptions apply. Check current IRS instructions for the applicable threshold and adjusted filing deadline, and collect vendor W-9s early.
Local · US
How do I handle sales tax for my online store in the US?
Sales tax is set by state. After the Wayfair decision, you may need to collect tax in states where you exceed economic nexus thresholds. Use software like your marketplace's collection tools or Avalara/TaxJar and reconcile filings monthly.
Local · US
Should my LLC elect S-corp status?
An S-corp election can reduce self-employment tax once profits are high enough to justify a reasonable salary plus payroll costs, but there is no universal profit level that makes it worthwhile. Discuss with your CPA.
Local · US
When are quarterly estimated taxes due in the US?
Federal estimated taxes are generally due April 15, June 15, September 15 and January 15. Accurate monthly books help you calculate payments and avoid underpayment penalties.
Local · UK
What is Making Tax Digital in the UK?
Making Tax Digital (MTD) requires VAT-registered businesses to keep digital records and file VAT returns using compatible software. MTD for Income Tax is being phased in for self-employed people and landlords from April 2026.
Local · UK
When do I need to register for VAT in the UK?
You must register when your VAT-taxable turnover exceeds the threshold (£90,000 over a rolling 12 months) or you expect to exceed it in the next 30 days. You can also register voluntarily.
Local · UK
Do I need an accountant for self assessment?
Not legally, but many sole traders and landlords use one to avoid errors and penalties, claim all allowable expenses and handle payments on account. Clean bookkeeping makes the return quick and cheap.
Local · UK
What does a limited company need to file each year in the UK?
Annual accounts and a confirmation statement with Companies House, a Corporation Tax return (CT600) with HMRC, plus VAT returns and payroll (RTI) submissions if applicable.
Local · UK
How much does an online accountant cost in the UK?
Online accountants for sole traders typically charge £30–£80 a month; limited companies usually pay £80–£250 a month including year-end accounts, depending on turnover and services.
Local · AU
What is a BAS and who can prepare it in Australia?
A Business Activity Statement reports GST, PAYG withholding and other taxes to the ATO. Owners can lodge their own BAS. Paid external BAS services can require BAS-agent or tax-agent registration, including preparation that involves applying BAS rules.
Local · AU
When do I need to register for GST in Australia?
You must register for GST when your GST turnover reaches A$75,000 (A$150,000 for non-profits). Taxi and ride-share drivers must register regardless of turnover.
Local · AU
What is Single Touch Payroll?
Single Touch Payroll (STP) requires employers to report salary, PAYG withholding and super to the ATO each time they pay employees, using STP-enabled software like Xero or MYOB.
Local · AU
How often do I lodge a BAS?
Most small businesses lodge quarterly. Businesses with GST turnover of A$20 million or more lodge monthly, and some small businesses can choose annual GST reporting.
Local · AU
Do I need a bookkeeper or a tax agent in Australia?
A bookkeeper keeps your books and prepares BAS records; a registered tax agent lodges income tax returns and advises. Many small businesses use a bookkeeper monthly and a tax agent annually.
Local · CA
Do I need to charge GST/HST in Canada?
For most businesses, exceeding CA$30,000 in worldwide taxable supplies in a single calendar quarter or over four consecutive calendar quarters can trigger GST/HST registration. Timing differs between the tests, and special rules apply.
Local · CA
What is an input tax credit (ITC)?
An ITC lets GST/HST registrants recover the GST/HST paid on business purchases. Keep receipts showing the supplier's GST/HST number to support every claim.
Local · CA
When is a Canadian corporation's T2 return due?
The T2 corporate return is due six months after the end of the tax year. Any balance owing is generally due two or three months after year-end, so books need to be ready early.
Local · CA
Do I need a CPA for my Canadian small business?
Corporations commonly use a CPA for year-end financial statements and the T2 return. A bookkeeper keeps monthly records clean, which reduces CPA time and fees.
Local · CA
How do payroll remittances work in Canada?
Employers deduct CPP, EI and income tax from wages and remit them to the CRA, usually monthly for small employers. T4 slips are filed by the end of February.
Industries
What is different about e-commerce bookkeeping?
E-commerce books must reconcile platform payouts to gross sales, fees, refunds and chargebacks, track inventory and cost of goods sold, and handle sales tax or VAT across regions.
Industries
How should construction companies do bookkeeping?
Construction firms need job costing, retention tracking, progress billing and subcontractor compliance (such as CIS in the UK or 1099s in the US) so they can see profit per project.
Industries
What bookkeeping do consultants and agencies need?
Service businesses mainly need clean invoicing, time-to-cash tracking, expense categorisation and project profitability reporting. Fixed-fee monthly bookkeeping fits them well.
Industries
How do startups handle bookkeeping before raising investment?
Use accrual accounting from the start, keep a clean cap table, reconcile monthly and produce investor-ready monthly reports. Due diligence goes much faster with tidy books.
Industries
Do restaurants need special bookkeeping?
Yes. Restaurants should reconcile POS sales and tips daily, track food and labour costs as a percentage of sales, and manage frequent supplier invoices and inventory counts.
Problems
How do I record a customer deposit before the work is finished?
A customer payment received before you earn it may be a liability rather than immediate revenue under accrual accounting. Track the deposit separately and recognise revenue as the agreed goods or services are delivered.
Problems
How should I record loan repayments in my bookkeeping?
Split a loan payment between principal, interest and any applicable fees. Principal reduces the loan liability; interest is usually recorded separately as an expense, subject to the relevant accounting and tax rules.
Problems
How do I handle refunds and chargebacks in my accounts?
Link refunds and chargebacks to the original sale, separate processor fees and review any tax adjustment. Do not simply classify every deduction from a payout as a new business expense.
Problems
What should I do when a customer will not pay an invoice?
Confirm the debt is valid, follow a documented collection process and assess whether it is recoverable. A write-off, impairment or tax bad-debt claim requires the appropriate evidence and local treatment.
Problems
How do I record equipment purchases and depreciation?
Equipment used over several periods may be a fixed asset rather than an immediate expense. Track the purchase cost and depreciation separately; tax deductions may follow different rules from accounting depreciation.
Industries
How do I calculate inventory and cost of goods sold?
Cost of goods sold reflects inventory sold during the period, not simply every stock purchase paid for. Accurate opening stock, purchases, adjustments and closing inventory are essential for a reliable gross margin.
Problems
How do I record subscriptions paid for a year in advance?
Under accrual accounting, a material annual payment may be recorded as a prepayment and expensed over the covered period. Cash-basis and tax treatment can differ, so use an agreed accounting policy.
Problems
Why is my business profitable but my bank balance is falling?
Profit and cash measure different things. Unpaid customer invoices, inventory, loan principal, capital spending, taxes and owner withdrawals can reduce cash without being expenses in the same period.
Software
How can I prevent duplicate transactions from bank feeds and receipt apps?
Use one agreed entry workflow and match bank-feed lines to existing invoices, bills or expenses. Adding a new expense for a payment already recorded by a receipt app can double-count the cost.
Software
What should I check before automating bookkeeping with AI?
Automate document capture and routine suggestions only with review controls. AI can misread receipts, invent classifications or miss local tax rules; it should not make unreviewed payments or decide complex tax positions.
Hiring
What documents should I send a new bookkeeper?
Provide entity details, recent statements, prior closing reports, unpaid invoice and bill lists, payroll records and tax registrations through a secure channel. Keep ownership of your records and use invited software access rather than shared passwords.
Hiring
How often should I review reports with my bookkeeper?
A monthly review is useful for many businesses, with more frequent cash reviews where money is tight. Discuss profit, cash, overdue balances and unresolved items instead of only checking that reports were delivered.
Local · US
What business expense evidence should I keep for the IRS?
Keep records showing the amount, date, payee and business purpose, with invoices, receipts or other support where required. A bank or card statement alone may not prove what was purchased or why it was a business expense.
Local · US
How do I reconcile payroll tax liabilities to deposits?
Compare payroll registers, liability accounts, filed returns and payment confirmations for the same period. Payroll tax expense and unpaid tax liabilities are different balances, and filing a return does not itself make the payment.
Local · UK
Can I reclaim VAT on every business purchase?
No. Input VAT recovery depends on registration, the business use, valid evidence and restrictions. Exempt activity, private use and some spending categories can limit recovery even where a cost is business-related.
Local · UK
How should I record money I lend to my limited company?
Record a director's contribution as a liability owed by the company where it is genuinely a loan, not as sales. Keep a director's loan account and distinguish lending from salary, expenses, share capital and dividends.
Local · AU
How do I check my BAS against my accounting records?
Reconcile the reported GST, PAYG and other relevant labels to supporting reports and control accounts before lodgment. A successful software submission does not prove that tax codes, periods or adjustments are correct.
Local · AU
What is the difference between GST-free and input-taxed sales?
Both can involve sales without GST charged, but their treatment of related GST credits differs. Eligible costs connected with GST-free sales can generally support credits; costs connected with input-taxed sales are generally restricted, subject to specific rules.
Local · CA
What is the difference between zero-rated and exempt GST/HST supplies?
Zero-rated supplies are taxable at 0%, while exempt supplies are generally outside GST/HST collection. The distinction matters because eligible input tax credits may be available for costs supporting zero-rated supplies but generally not exempt activities.
Local · CA
Do I need to deal with provincial sales tax as well as GST/HST?
Possibly. Provincial sales-tax systems and Quebec's QST can create obligations separate from federal GST/HST. The applicable registration and collection rules depend on where you operate, what you sell and where customers are located.