The general ledger is the cornerstone of your business's bookkeeping practices and is key to maintaining accurate and tax-ready finances. It's also essential for growth and ongoing compliance activities. Accurately setting up and maintaining your ledger is time-consuming, detail-heavy work that can be stressful without expert assistance.This comprehensive guide explains what a general ledger is and how it works. However, if you prefer professional support, 1-800Accountant, America's leading virtual accounting firm, is here to help with a tax-deductible, full-service bookkeeping solution powered by real bookkeepers. When your books and general ledger are maintained by professionals on behalf of your business, it provides peace of mind and the confidence to make critical, long-term business decisions based on real-time data provided by our bookkeepers.<h2>Key Takeaways</h2><ul><li>A general ledger is the master financial record of your business, tracking every transaction across assets, liabilities, equity, revenue, and expenses.</li><li>Keeping your ledger accurate and up to date is essential for decision-making, tax compliance, and investor transparency.</li><li>The general ledger differs from journals and balance sheets by providing a complete history of all financial activity, not just a snapshot in time.</li><li>Double-entry bookkeeping (every transaction recorded as a debit and a credit) ensures accounts stay balanced and reduces costly errors.</li><li>A well-maintained ledger makes it easier to generate financial statements, including income statements, balance sheets, and cash flow reports.</li><li>Modern accounting software can streamline ledger management, while <a href="https://1800accountant.com/services/bookkeeping">professional bookkeeping support</a> saves time and adds expertise as your business grows.</li><li>A properly managed ledger helps you avoid IRS penalties by ensuring accurate quarterly, annual, and payroll reporting.</li></ul><h2>What Is a General Ledger?</h2><a href="https://www.investopedia.com/terms/g/generalledger.asp" target="_blank">The general ledger is the master record</a> of every financial transaction you make as part of your business. Every time money changes hands, there should be a record of it.Central to the general ledger is the chart of accounts, which organizes all of the different accounts for your business. Wherever the money goes, you can keep track of it with the chart of accounts.You'll use a general ledger most often for double-entry bookkeeping, which means making two entries for every financial transaction you record. Each exchange affects two subsidiary ledgers in your chart. Every time you make a sale or a purchase, that business transaction should be recorded as a debit and a credit.&nbsp;The recording you do for each transaction is called a journal entry. Because each entry you post to the ledger appears in both debits and credits, it should be easy to balance the accounts and make sure everything adds up later.&nbsp;General ledgers were once primarily documented in physical records, but this has changed over the years, with digital documents becoming increasingly common. Off-the-shelf accounting software might have the features you need to maintain your ledger, or you might consider keeping everything in a spreadsheet form.<h2>General Ledger vs. Balance Sheet vs. Journal</h2>While you may have heard the two terms used interchangeably, a general ledger and a balance sheet are not the same.&nbsp;One of the <a href="https://bizfluent.com/list-7562858-differences-general-ledger-balance-sheet.html" target="_blank">main differences between a general ledger and a balance sheet</a> is the scope. The general ledger is the financial record for the entire life of the business and should include all transactions, dating back to the business's inception. On the other hand, the balance sheet provides a snapshot of your business's financial position at a specific point in time.&nbsp;You'll use a balance sheet to show your business's current assets and liabilities, providing a quick understanding of its current financial position. The general ledger includes all of that information.&nbsp;Similar to a balance sheet, a journal and the general ledger are sometimes used interchangeably. While a journal is chronological, the ledger is a collection of accounts that summarize your business's transactions.&nbsp;Balance sheets and journals are important, and the general ledger is your business's master record.&nbsp;<h2>Why Is a General Ledger Important?</h2>A general ledger is crucial for <a href="https://1800accountant.com/blog/6-easy-bookkeeping-tips-entrepreneurs">easy and effective bookkeeping</a> because it keeps you coordinated and in control of your business's finances. You need one place for everything to be organized so that you can get a clear sense of your financial health at a glance.This is crucial for your own informed decisions as a business owner, including hiring, inventory purchases, and growth planning. But the general ledger is essential for reasons beyond decision-making support.Whenever you need to report on your business's financial situation (income statement, balance sheet, <a href="https://1800accountant.com/blog/cash-flow-management">cash flow</a>), the general ledger will provide the necessary information. Ensuring your ledger is up to date makes creating income statements and financial reports easier, as you won't have to second-guess the accuracy of the data. This also simplifies the tax preparation process, ensures compliance, and empowers you to hit quarterly and annual reporting deadlines.At the end of every quarter, compile a trial balance worksheet as a report of your current account status and cash flows. This allows you to compare financial statements from each subsidiary ledger and ensure that they all balance. If you're always up to date, you won't have to do any extra work when preparing a report for a prospective investor, which is also critical for transparency.&nbsp;<h2>How Does a General Ledger Work?</h2>Every business transaction has its place in the general ledger. Each journal entry is recorded in the appropriate general ledger account, following the principles of double-entry accounting.As transactions are recorded, the general ledger continuously updates the balances of each account. Debits and credits impact the account balance differently depending on the account.&nbsp;Additionally, the general ledger serves as the foundation for financial reporting. By collecting transaction data, the ledger helps prepare key financial statements, including:<ul><li><a href="https://1800accountant.com/blog/bookkeeping-101-what-is-a-balance-sheet">Balance sheet</a></li><li><a href="https://1800accountant.com/blog/bookkeeping-101-what-is-an-income-statement">Income statement</a></li><li><a href="https://1800accountant.com/blog/cash-flow-statement">Cash flow statement</a></li></ul>These statements are included in reports that provide stakeholders with insights into your business's financial health and performance.<h2>Accounts Included in a General Ledger</h2>So what goes into your general ledger? Each of the different accounts in your chart of accounts fits into either assets or liabilities. As you balance your ledger, these accounts should fit together following this basic accounting equation: Assets = Liabilities + Equity. It's foundational to the double-entry bookkeeping system you'll use for your general ledger.We've listed the key accounts you should include as the core of your general ledger's chart of accounts below. You'll likely recognize them as some of the most <a href="https://1800accountant.com/blog/common-bookkeeping-terms">common bookkeeping terms</a>.&nbsp;<h3>Accounts Receivable</h3>Accounts receivable are debits. These are assets that represent the money you are owed. These are often orders for goods or services that have not yet been paid for. You are expecting to receive these payments, but you haven't collected them yet.&nbsp;&nbsp;<h3>Accounts Payable</h3>Accounts payable is the opposite. These liabilities include all the money you owe but haven't yet paid. Whenever you place an order with your suppliers, the payment you owe will be recorded in accounts payable until it is paid in full.&nbsp;<h3>Cash</h3>Cash is the money you have now. This refers to all the funds you have in expense accounts ready to be spent. It's essential to keep track so that you don't end up spending money you don't have.&nbsp;<h3>Inventory</h3>Your inventory is another essential category that requires careful recording. These are assets that you've paid for and are waiting to sell to your customers. You've invested money in this inventory, and you need it to pay off.<h3>Assets</h3>Assets are resources that your business owns that have economic value, including cash, accounts receivable, and inventory. Tracking asset accounts is a crucial aspect of your chart of accounts, as it supports financial reporting and analysis.&nbsp;<h3>Liabilities</h3>Unlike assets, liabilities are your business debts and financial obligations owed to others, including loans and accounts payable. These liabilities are categorized on your balance sheet and may include both short-term and long-term obligations.&nbsp;<h3>Equity</h3>Equity, sometimes referred to as owner's equity, represents a shareholder's interest in the business's assets after all liabilities have been paid. Accounts within the equity category include common stock, retained earnings, and owner's draws.&nbsp;<h3>Revenue</h3>The revenue you record typically includes sales, service income, and other income related to your business's primary operations, although it can also come from different sources. Tracking revenue allows you to monitor financial performance and produce financial statements.&nbsp;<h3>Expenses</h3>The outflow of business funds or the use of assets your business uses to generate income are referred to as expenses. Business expenses may include payroll, rent, and supplies. Tracking expenses helps you monitor your spending and identify potential cost-saving opportunities.&nbsp;<h2>Modern General Ledger Tools for Small Businesses</h2>Although maintaining your general ledger can be tedious and time-consuming, digital tools and cloud-based accounting software, such as QuickBooks, Xero, Wave, and 1-800Accountant's proprietary ClientBooks, make the process easier. The benefits of using these modern tools include:&nbsp;<ul><li>Automation</li><li>Error reduction</li><li>Real-time reports</li><li>Tax filing integration</li></ul>While modern digital accounting tools can be helpful, they're no replacement for 1-800Accountant's full-service bookkeeping solution. Gain time and peace of mind knowing your designated bookkeeper is handling your audit-ready books.&nbsp;<h2>General Ledger and Tax Compliance</h2>Having a well-kept general ledger prevents mistakes, penalties, and IRS red flags, while promoting overall tax compliance.&nbsp;Your general ledger ensures accurate reporting for:<ul><li>Quarterly estimated tax payments (Due by April 15, June 15, September 15, and January 15).</li><li>Annual tax filing (IRS Form 1040, U.S. Individual Income Tax Return, and IRS Form 1120, U.S. Corporation Income Tax Return).</li><li>Payroll reporting (IRS Form 941, Employer's Quarterly Federal Tax Return).</li></ul><h2>Keeping Your Business Running Smoothly</h2>Maintaining consistent bookkeeping and establishing a regular schedule for monthly reconciliations will help keep your business running smoothly. As your business matures and grows, you will likely find it increasingly difficult to maintain this pace, which is when it's time to consider outsourcing.Professional, outsourced bookkeeping from 1-800Accountant saves time, prevents costly errors, and generates the insights you need to make important business decisions. Schedule a free, 30-minute consultation with one of our small business experts today.&nbsp;<h2>FAQs About General Ledgers</h2>Is a general ledger required for small businesses?Establishing and maintaining a general ledger is not a legal requirement; however, you severely diminish your ability to grow and compete without one. While small business owners may strategically cut corners early on, it is always advisable to establish a central record of all your business activities.How often should I update my general ledger?You should update your general ledger regularly, basing the frequency on your transaction volume. Update your general ledger daily or weekly if you're experiencing high volume, and bi-weekly or monthly during slow periods. Regardless of which applies to your business, remember that consistency is key.&nbsp;What’s the difference between a general ledger and a journal?A journal records transactions chronologically, while a general ledger is regarded as your master record. This is the main difference between the two.&nbsp;Can software fully replace a bookkeeper?While accounting software can automate certain functions and support your operations better than no bookkeeper at all, software is not a complete replacement for an experienced bookkeeper. Accounting software is a valuable tool, while an experienced bookkeeper can generate much more value, particularly as your business grows and matures.&nbsp;<h2>Maintaining Your General Ledger</h2>When it comes to accuracy, compliance, and overall business health, it's incredibly important to establish and maintain your general ledger. Creating sustainable growth requires keeping all of these accounts, and there's no better way to do it than with your ledger. This way, bookkeeping won't ever fall off your list of priorities and slip through the cracks.As your business expands, you will see the value in handing off these tasks to a qualified outsourced firm to maintain your business records. When that happens, it's time to talk to the <a href="https://1800accountant.com/services/bookkeeping">bookkeeping</a> and <a href="https://1800accountant.com/services/small-business-taxes">accounting experts</a> at 1-800Accountant. Our affordable, tax-deductible full-service bookkeeping solution maintains your books for you, providing peace of mind and the freedom to focus on your next business milestone.&nbsp;Schedule your free 30-minute consultation today to learn more about the benefits of professional bookkeeping for your business.

The general ledger is the master record of every financial transaction you make as part of your business. Every time money changes hands, there should be a record of it.

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What Is a General Ledger and How Does It Work?

QuickBooks is the most recognized accounting software in the U.S., holding roughly 62% of the overall market share. Despite its popularity, many entrepreneurs, freelancers, and small business owners find QuickBooks features to be overwhelming, pricing too expensive, or simply not the right fit for their needs.Fortunately, the accounting software space offers alternatives that are a better fit for modern small business owners, offering affordability, ease of use, and scalability. At the top of the list is ClientBooks, a solution built specifically for small business owners and integrated with real human accounting and bookkeeping expertise from&nbsp;<a href="https://1800accountant.com" target="_self">1-800Accountant</a>, America's leading virtual accounting firm. &nbsp;This guide will walk through the best QuickBooks alternatives in 2025, highlighting their unique capabilities and helping you choose software that's the best fit for your small business needs.<h2>Key Highlights</h2><ul><li>QuickBooks and QuickBooks Online dominate the market, but many small businesses find them to be too costly and complex.</li><li>ClientBooks&nbsp;leads as the best overall QuickBooks alternative, offering do-it-yourself (DIY) bookkeeping, compatibility with common platforms, and the option to add&nbsp;<a href="https://1800accountant.com/services/bookkeeping" target="_self">full-service bookkeeping</a>&nbsp;powered by your designated bookkeeper for an affordable, tax-deductible fee.</li><li>Other strong QuickBooks competitors to consider include FreshBooks, Xero, Wave, Zoho Books, Sage, and Kashoo—each catering to different business needs.</li><li>Choosing the right solution depends on factors like budget, features, integrations, and overall support.</li><li>The right accounting platform saves time, reduces stress, and helps your small business grow with confidence.</li></ul><h2>Why Look for QuickBooks Alternatives in 2025?</h2>While QuickBooks has long been the default choice for accounting software, it’s not without drawbacks:<ul><li>High costs: Subscription pricing can add up, especially for small or seasonal businesses.</li><li>Complexity: Many entrepreneurs don’t need the advanced features designed primarily for accounting professionals.</li><li>Steep learning curve: Business owners often spend more time trying to figure out QuickBooks than actually using it to help their businesses grow.</li></ul>The rise of new technologies and user-friendly design has paved the way for affordable, intuitive small business bookkeeping software options that better align with the needs of small businesses. In 2025, trends shaping these alternatives to QuickBooks and the overall accounting software market include:<ul><li>Automation: From recurring invoices to automated reminders, reducing manual entry.</li><li>Integrated solutions: Platforms that combine bookkeeping with&nbsp;<a href="https://1800accountant.com/services/small-business-taxes/online-filing">tax filing support for small businesses</a>.</li><li>Accessible support: Increasingly, entrepreneurs are demanding software backed by real human expertise, not just self-service tools.</li></ul><h2>The Best QuickBooks Alternatives in 2025</h2><h3>1. ClientBooks (Best Overall for Small Businesses)</h3>ClientBooks is built with the over 100,000 small businesses we've served in mind—not accountants. When it comes to ClientBooks vs. QuickBooks, ClientBooks combines simple DIY bookkeeping software with the option to upgrade to&nbsp;full-service support, including a dedicated bookkeeper, through 1-800Accountant.Key strengths:<ul><li>DIY software with optional professional bookkeeping.</li><li>Flat-rate, affordable pricing—no hidden fees.</li><li>Tax-ready reports with seamless integration into 1-800Accountant services for maximum efficiency.&nbsp;</li><li>Real human professional support available.</li><li>Scales with your business, whether you’re a freelancer or a growing startup.</li></ul>Best suited for: Freelancers, startups, and small businesses seeking flexibility and peace of mind.👉 Start your journey with&nbsp;<a href="https://clientbooks.com" target="_self">ClientBooks bookkeeping software</a>&nbsp;today.<h3>2. FreshBooks (Best for Freelancers and Service Businesses)</h3>FreshBooks is well-known for its easy invoicing (some plans support unlimited invoices) and expense tracking. It’s a cloud-based solution and integrates with popular payment processors, making it a favorite for freelancers and service-oriented businesses.<ul><li>Excellent for billing clients and tracking expenses.</li><li>Strong reputation for customer support.</li><li>Best suited for small service businesses and independent professionals.</li></ul><a href="https://www.freshbooks.com" target="_blank">Learn more at FreshBooks</a>.<h3>3. Xero (Best for Growing Startups)</h3>Xero has gained global popularity, especially with startups. It integrates with over 1,000 apps, from payment processors to customer relationship management (CRM) tools.<ul><li>Feature-rich and scalable.</li><li>Affordable entry-level pricing.</li><li>Best suited for businesses planning to grow quickly and requiring robust integration options.</li></ul>Visit&nbsp;<a href="https://www.xero.com" target="_blank">Xero</a>.<h3>4. Wave Accounting (Best Free Alternative)</h3>For entrepreneurs just starting, Wave is hard to beat—it’s entirely free for bookkeeping and accounting tasks.<ul><li>Ideal accounting system for side hustlers or very small businesses.</li><li>Downsides: charges for payroll and payment processing, and customer support is limited.</li><li>Still, the free, full-featured accounting software makes it a great entry point.</li></ul>Explore&nbsp;<a href="https://www.waveapps.com" target="_blank">Wave Accounting</a>&nbsp;and its free plan.<h3>5. Zoho Books (Best for Automation &amp; Ecosystem)</h3>Zoho Books is part of the broader Zoho suite, making it a great choice if you already use Zoho apps, rather than a separate system.<ul><li>Budget-friendly and packed with automation (recurring professional invoices, reminders).</li><li>A strong fit for businesses seeking CRM integration, email, and a financial management solution.</li></ul>Check out&nbsp;<a href="https://www.zoho.com/books" target="_blank">Zoho Books</a>.<h3>6. Sage Accounting (Best for Established Businesses)</h3>Sage is one of the most established accounting platforms worldwide due to its intuitive accounting software features.<ul><li>Substantial compliance and reporting features.</li><li>Trusted by more established small to mid-sized businesses.</li><li>Known for its reliability and global recognition.</li></ul>Discover&nbsp;<a href="https://www.sage.com" target="_blank">Sage Accounting</a>.<h3>7. Kashoo (Best for Simplicity)</h3>Kashoo is designed for solopreneurs and freelancers who value simplicity above more advanced accounting features.<ul><li>Straightforward interface, minimal learning curve.</li><li>Affordable pricing.</li><li>Great for self-employed professionals managing their own books.</li></ul>Learn more about&nbsp;<a href="https://www.kashoo.com" target="_blank">Kashoo</a>.<h2>How to Choose the Right QuickBooks Alternative</h2>Selecting the best QuickBooks replacement comes down to your business’s specific needs:<ul><li>Budget: How much can you invest in software each month?</li><li>Business size: Freelancers may need fewer robust features than a growing startup.</li><li>Integrations: Do you need software that connects with your existing tools?</li><li>Support: Is access to real CPAs, bookkeepers, and accounting professionals vital to your operations?</li></ul>While many of the tools highlighted offer affordable accounting software,&nbsp;ClientBooks has innovated in the space by combining DIY bookkeeping with the option to upgrade to professional, full-service help when you need it most. This flexibility ensures your software can scale with your business, with consistency at every stage.<h2>Choosing Your Accounting Software</h2>QuickBooks may be the biggest name in accounting software, but it’s not the only option—and it’s not always the best bookkeeping software for small businesses. In 2025, entrepreneurs have a wealth of choices, from free platforms like Wave, with its intuitive interface, to automation-friendly Zoho Books and the globally trusted Sage.For most small businesses, however,&nbsp;ClientBooks stands out as the best overall QuickBooks alternative. With its affordable flat-rate pricing, seamless tax integration, and access to real accountants and bookkeepers through 1-800Accountant, it offers the perfect balance of simplicity and support.👉 Ready to simplify your bookkeeping? Try&nbsp;<a href="https://clientbooks.com" target="_self">ClientBooks bookkeeping software</a>&nbsp;today and spend more time growing your business, not managing spreadsheets.

Despite its popularity, many entrepreneurs, freelancers, and small business owners find QuickBooks features to be overwhelming, pricing too expensive, or simply not the right fit for their needs. Fortunately, the accounting software space offers alternatives that are a better fit for modern small business owners, offering affordability, ease of use, and scalability.

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Best QuickBooks Alternatives for Small Businesses (2025)

It's critically important to understand accounts receivable, an essential aspect of your<a href="https://1800accountant.com/blog/common-bookkeeping-terms"> business's finances and payment terms</a>. Accounts receivable are legally enforceable claims for payment held by a company for goods supplied or services rendered that customers or clients have ordered but haven't yet been paid for. Typically, the average accounts receivable records the amount due by customers or entities.<h2>Key Takeaways:&nbsp;</h2><ul><li>Understand the difference between accounts payable and receivable.</li><li>Learn where to find accounts receivable and if it's considered revenue.&nbsp;</li><li>Consider the strategic interpretation of accounts receivable for forecasting and late payments.</li><li>Weigh other types of receivables, including notes receivable.&nbsp;</li></ul><h2>What is Accounts Receivable?</h2>Accounts receivable are goods, money, or services<a href="https://www.investopedia.com/terms/a/accountsreceivable.asp" target="_blank"> owed to a business</a>. The accounts receivable process doesn't happen immediately. Instead, a small business will receive the goods or services after the transaction occurs. You'll find accounts receivable in the assets section of a balance sheet because it represents future cash inflows.&nbsp;Accounts receivable is considered part of a company’s working capital, with payments expected to be made in short-term periods. The total amount of accounts receivable your business anticipates collecting after factoring in uncollectible receivables and discounts is called a net receivable.&nbsp;<h2>What is the Difference Between Accounts Receivable and Accounts Payable?</h2>Accounts payable and accounts receivable have<a href="https://keydifferences.com/difference-between-accounts-receivable-and-accounts-payable.html" target="_blank"> several differences</a>.<a href="https://1800accountant.com/blog/accounts-payable">Accounts payable is</a>:<ul><li>A liability.</li><li>Considered cash outflows and credit card purchases.</li><li>Money received by a company in the future for goods or services from suppliers on credit.</li><li>Relevant to bills payable and collectors.</li></ul>Accounts payable example: If your business purchases $1,000 worth of office supplies with a payment due in 30 days, it should be recorded as accounts payable. You would do this because it's the amount of money your business owes that has yet to be paid.Accounts receivable is:&nbsp;&nbsp;<ul><li>An asset.&nbsp;</li><li>Considered cash inflows and credit sales.</li><li>Money received by a company in the future for goods or services rendered to customers on credit.</li><li><a href="https://1800accountant.com/blog/chart-of-accounts">Relevant to bills receivable and debtors</a>.</li></ul>Accounts receivable example: If your business provides $1,000 in services to a client who agrees to pay you in 30 days, it should be recorded as accounts receivable. You would do this because it's money to your business for services you've delivered but have not yet been compensated for.&nbsp;<h2>Strategically Interpreting Accounts Receivable</h2>Helpful information can be gleaned from your business's accounts receivable. If you're exploring a potential sale of your business, accounts receivable can determine value by analyzing:&nbsp;<ul><li>Your company’s balance sheet impact.</li><li>Cash flow (Accounts receivable is a component of your business's overall cash flow projections.).</li><li>Revenue and profitability.</li><li>Quality of receivables.</li></ul>Accounts receivable turnover ratio and days sales outstanding (DSO) ratio are used to evaluate the efficiency with which your business collects outstanding customer payments. It's important that your business has a lower DSO or turnover ratio, a key indicator of a positive collection process, cash flow management, and liquidity.&nbsp;Maximize the strategic impact of your accounts receivable with<a href="https://1800accountant.com/services/business-tax-advisory"> 1-800Accountant's year-round tax advisory solution</a>.&nbsp;<h2>Is Accounts Receivable Revenue?</h2>Your accounts receivable balance<a href="https://smallbusiness.chron.com/accounts-receivable-revenue-33895.html" target="_blank"> is revenue</a>, depending on how you construct your balance sheet.<a href="https://1800accountant.com/blog/small-business-accounting-cash-vs-accrual">If you use cash basis accounting</a>, you shouldn’t include accounts receivable in the accrued revenue calculations of<a href="https://1800accountant.com/blog/bookkeeping-101-what-is-a-general-ledger"> your general ledger</a>. Cash basis accounting uses the cash itself to determine when a transaction is recorded.However,<a href="https://1800accountant.com/blog/small-business-accounting-guide"> if you use accrual basis accounting</a>, you can include payments as revenue after transactions involving goods or services are complete. You'll record accounts receivable as revenue on your balance sheet for accrual basis accounting. Accrual basis accounting uses the actual act of exchanging a product or a service to determine when a transaction is recorded.Learn more about these two essential accounting methods in our blog,<a href="https://1800accountant.com/blog/small-business-accounting-cash-vs-accrual"> Cash Basis Accounting vs. Accrual Basis Accounting – What’s the Difference?</a><h2>Where Can I Find Accounts Receivable?</h2>You can find your accounts receivable on<a href="https://www.thebalancemoney.com/accounts-receivables-on-the-balance-sheet-357263" target="_blank"> your balance sheet</a>. You'll list it as a current asset on the balance sheet or a long-term asset, depending on when the transaction occurred. This is a manual process that you can automate with accounting software.<h2>What Are the Other Types of Receivables?</h2>There are at least four types of receivables most business owners use to help with outstanding invoices, collect payments, and streamline operations. They are:<ul><li>Interest receivable.</li><li>Nontrade receivable.</li><li>Notes receivable.</li><li>Trade receivable.</li></ul><h3>Notes receivable</h3>Notes receivable, like accounts receivable, is an amount owed to your business. However, customers will sign a promissory note to provide proof of their debts, hence the name. As a business owner, you can use a promissory note for legal purposes if the debt remains unpaid for a period of time.&nbsp;Notes receivable can either be a current asset or a long-term asset.&nbsp;<ul><li>If notes receivable are due within a year or less, they are considered a current asset.&nbsp;</li><li>If notes receivable are due in more than one year, they are considered a long-term asset.</li></ul><h3>Other receivables</h3><a href="https://1800accountant.com/blog/different-types-accounting">Other receivables</a> can be helpful<a href="https://1800accountant.com/blog/small-business-bookkeeping-basics"> for your bookkeeping needs</a>:&nbsp;<ul><li>Interest receivable.&nbsp;&nbsp;</li><li>Nontrade receivable.</li><li>Trade receivable.</li></ul><a href="https://www.wisegeek.net/what-is-an-interest-receivable.htm" target="_blank">Interest receivable</a> is the amount of interest owed to a company. Like notes receivable, interest receivable is an asset on a balance sheet.Interest receivable payments aren't payments that a company has received. However, they have a later due date. Recording interest receivable on your financial statements can help you determine the amount of interest owed to you.Trade receivables refer to amounts owed for goods and services, encompassing both accounts receivable and notes receivable. Nontrade receivables are amounts outside of business transactions that comprise:&nbsp;<ul><li>Advances to employees.</li><li>Claims for losses or damages.</li><li>Dividends.</li><li>Interest receivable.</li></ul><h2>What If Receivables Are Not Paid?</h2>While proactive collection policies are helpful, such as the implementation of late fees, there may be times when receivables go past due and remain unpaid, which can significantly impact your business<a href="https://1800accountant.com/blog/cash-flow-statement"> and its cash flow</a>, as well as other critical metrics. When a debt is deemed uncollectible, it is recognized as a bad debt expense for financial reporting purposes.Businesses will offer accounts receivable discounts, which can be in the form of favorable credit terms if paid within a shorter timeframe, incentivizing early payment options. These discounts are used to improve business cash flow while minimizing the risk of unpaid invoices and bad debt.&nbsp;<h2>Work with the Pros</h2>Recording accounts receivable is a crucial<a href="https://1800accountant.com/blog/small-business-bookkeeping-best-practices"> aspect of small business bookkeeping</a>. This task,<a href="https://1800accountant.com/blog/small-business-bookkeeping-basics"> and bookkeeping more generally</a>, can be tedious and time-consuming, diverting your attention away from critical pro-growth projects. When this happens, it's time to consider professional support from the experts at 1-800Accountant, America's leading virtual accounting firm.&nbsp;Working with expert bookkeepers,<a href="https://1800accountant.com/services/bookkeeping"> such as those who power 1-800Accountant's full-service bookkeeping solution</a>, can seamlessly address bookkeeping tasks, including accounts receivable, ensuring compliance and peace of mind with error-free work. 1-800Accountant’s CPAs and tax professionals routinely advise businesses,<a href="https://1800accountant.com/services/business-tax-advisory"> via year-round tax advisory services</a>, to help them make strategic business decisions.Don't wait - speak with 1-800Accountant today. Schedule a quick consultation – typically 30 minutes or less— to learn more and get started.

It's critically important to understand accounts receivable, an essential aspect of your business's finances and payment terms. Accounts receivable are legally enforceable claims for payment held by a company for goods supplied or services rendered that customers or clients have ordered but haven't yet been paid for. Typically, the average accounts receivable records the amount due by customers or entities.

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Accounts Receivable: Everything You Need to Know

Outsourced bookkeeping saves time and keeps you compliant while generating important insights that aid in informed decisions about your business. These services are increasingly popular with small business owners due to their cost-effectiveness, time savings, and flexibility.

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Top 8 Outsourced Bookkeeping Services for Small Businesses (2025)

Top 8 Outsourced Bookkeeping Services in 2025

Learning bookkeeping tips and basics is vital whether you've been handling your books for a while or just starting. Use this excellent article to learn the five small business bookkeeping basics you can't ignore […]

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5 Small Business Bookkeeping Basics You Can’t Ignore

5 Small Business Bookkeeping Basics You Can't Ignore

Bookkeeping probably wasn't a priority when you started your business, which is understandable. No one wants tedious, time-consuming administrative tasks dulling the excitement of a successful launch […]

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10 Tips and Best Practices for Small Business Bookkeeping

Bookkeeping is essential for Amazon sellers because it helps organize your small business's financial transactions and keep them that way. There are several benefits to bookkeeping that can save your business money and time […]

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Amazon Seller Accounting and Bookkeeping Guide

Small business owners wear many hats and have a lot going on as they build their businesses. So, it's understandable that some tasks and priorities are pushed to the side in favor of what they deem to be more pressing aspects of their work. Typically, accounting and financial tasks are among the priorities relegated to the sidelines, but they shouldn't be. You should always prioritize tax and financial considerations, as they can significantly impact your liabilities owed to the IRS. That's why we created this handy list of<a class="link" href="https://1800accountant.com/blog/year-end-accounting-tips"> accounting tips for your small business</a>. These tips touch on some of the most critical accounting tasks and processes you should be aware of, helping to give you vital financial insights and an edge over competitors.&nbsp;&nbsp;



<h2 class="wp-block-heading">9 Small Business Accounting Tips</h2>



<ol>
<li>Expenses. While it isn't mandatory, separating personal and business expenses has numerous advantages. Instead of rushing and stressing during tax season, which takes away from your core business activities, you'll be organized and ready to<a class="link" href="https://1800accountant.com/blog/9-things-small-business-owners-forget-to-claim-on-their-taxes"> claim every deduction</a> your business is entitled to at tax time. As you begin the separation process, business bank accounts, business credit cards, and phone lines are great areas to focus on.&nbsp; </li>



<li>Budgeting. If you've just established your business, it's understandable that you have yet to create a budget. However,<a class="link" href="https://1800accountant.com/blog/budgeting-tips-small-business-owners"> creating a budget</a> detailing your business revenue and expenses for a certain period should be prioritized as soon as possible. You always want to have a firm grasp of your business's financial health, and budgeting helps you achieve that goal. </li>



<li>Bookkeeping. Another method to better understand your business performance is to track all of your income and expenses,<a class="link" href="https://1800accountant.com/blog/6-easy-bookkeeping-tips-entrepreneurs"> which is called bookkeeping</a>. You'll need a high attention to detail and a lot of time to do your own books. Bookkeeping can give you the real-time data you need to make important business decisions when done correctly. Make a mistake, and it throws off everything that depends on your bookkeeping system,<a class="link" href="https://1800accountant.com/blog/manage-small-business-finances"> including financial forecasts</a> your accountant is tasked to generate. You might be able to handle your books initially. Still, as your business grows, the process becomes more complex and time-consuming, which is why so many owners and entrepreneurs outsource this work to professional bookkeeping services. </li>



<li>Business records. Recordkeeping's scope goes beyond bookkeeping’s narrower focus. Recordkeepers document and store financial records, contracts, and legal documents, among other types of records. If you're just starting out, focus particularly on tracking your expenses, gross receipts, and fixed assets. You should store these records for a minimum of three years. </li>



<li>Accounting methods. You can choose to track your transactions using one of the two accounting methods: cash or accrual. Use accounting software to help manage and automate whichever method you choose. If you use the cash method, you will add revenue when your business receives cash and deduct expenses when your<a class="link" href="https://1800accountant.com/blog/calculate-small-business-taxes"> business pays an expense</a>. While the cash accounting method is more straightforward, it has a downside. This method doesn’t include accounts payable or accounts receivable. If you use the accrual method, each business transition matches its expenses and revenue. You’ll list your business expenses and revenues as they occur, meaning you’ll list expenses when paid and revenue when earned. While the cash<a class="link" href="https://www.asbn.com/fund-your-business/finance/25-accounting-terms-every-business-owner-should-know/" target="_blank" rel="noreferrer noopener"> accounting method</a> doesn’t use accounts payable or accounts receivable, accrual accounting does. This gives you a more complete view of your business's financial standing. </li>



<li>Maintaining cash flow. Maintaining the health of your business and creating sustainable growth requires careful cash flow management. You have to spend money to make money, which means ensuring you have funds available when you need them. That’s where your cash flow statement comes in. It is a document collecting all of your business data from day-to-day operations to report on your liquidity and financial health at any given moment. </li>



<li>Investments and credit. How you manage your financial information can impact your access to investment capital, loans, and credit. Before you're fortunate enough to receive additional funding, individuals and institutions will want details about your business's financial health before they invest. They will most certainly want to see your books, among other documentation, providing further incentive to maintain accurate and detailed financial materials at all times.&nbsp; </li>



<li>Tax compliance. Your business should always strive to remain tax-compliant to avoid penalties and increased IRS scrutiny.<a class="link" href="https://www.business.com/articles/business-taxes-matter-all-year/" target="_blank" rel="noreferrer noopener"> Business owners who handle</a> their own financial work risk tax non-compliance, which includes claiming the wrong<a class="link" href="https://1800accountant.com/blog/small-business-tax-deductions-checklist"> tax credit or tax deduction</a>, among other issues non-compliance can impact. A simple mistake can lead to numerous headaches, which is why so many businesses work with financial experts to remain compliant. This peace of mind allows owners to focus on building aspects of their businesses while their financial experts handle the rest. </li>



<li>Financial forecasts. Financial forecasting helps you predict future business performance based on past financial information. It can also assist you with predicting your budget and revenue. There are two types of financial forecasting: qualitative forecasts and quantitative forecasts. If your small business lacks historical data, you may prefer qualitative forecasts. You may prefer quantitative forecasts if you need to examine extensive historical data to figure out patterns or trends. Financial forecasting is one area where a dedicated accountant or CPA can make a sizable impact.&nbsp;</li>
</ol>



<h2 class="wp-block-heading">Work With Small Business Accounting Professionals</h2>



These accounting tips provide you with a foundational understanding of essential financial<a class="link" href="https://1800accountant.com/blog/bookkeeping-for-independent-contractors-6-tips-to-keep-in-mind"> tasks like bookkeeping</a>, business practices, and tax compliance. Without them, your business is unlikely to reach its full potential, which is why so many owners and entrepreneurs work with 1-800Accountant, America’s leading virtual accounting firm for small businesses.



Whether it's<a class="link" href="https://1800accountant.com/services/small-business-taxes"> business tax preparation</a>,<a class="link" href="https://1800accountant.com/services/business-tax-advisory"> tax advisory</a>, or any of our professional accounting services, we have the affordable pricing solutions you need to ensure your business remains compliant. Schedule a quick consultation – usually 30 minutes or less – to learn more.

Small business owners wear many hats and have a lot going on as they build their businesses. So, it&#8217;s understandable that some tasks and priorities are pushed to the side in favor of what they deem to be more pressing aspects of their work. Typically, accounting and financial tasks are among the priorities relegated to [&hellip;]

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9 Accounting Tips to Safeguard Your Small Business

9 Important Accounting Tips to Safeguard Your Small Business

Of all the financial tasks small business owners must address, bookkeeping might be one of the most consequential and time-consuming.<a class="link" href="https://1800accountant.com/blog/bookkeeping-101-keep-good-financial-records"> Do your books right</a>, and you'll gain important insights into your finances that will help you make critical, time-sensitive business decisions. Do them wrong, and it might hinder your ability to compete in the marketplace and ultimately lead to closure. If you've<a class="link" href="https://1800accountant.com/blog/create-simple-bookkeeping-spreadsheet-business"> run into issues while doing the books</a> for your business, it might be time to look to professionals for help. A professional bookkeeper will save you time and money, but identifying the right one for your business needs can be a challenge. Use this guide to learn all you need to know about evaluating and hiring<a class="link" href="https://1800accountant.com/blog/6-easy-bookkeeping-tips-entrepreneurs"> the right bookkeepe</a>r for your business.&nbsp;<h2 class="wp-block-heading">Essential Bookkeeping Tasks</h2>Some bookkeepers are generalists, while others are more specialized. Whichever you choose, ensure they can deliver the following basic bookkeeping tasks.<ul><li>Payroll</li><li>Expense tracking and classification</li><li>Account reconciliations</li><li>Managing vendors and accounts payable/receivable</li><li>Paying bills</li></ul><h2 class="wp-block-heading">How Much Does a Bookkeeper Cost?</h2>When it comes to using a professional bookkeeper, you have the option to hire or outsource. The cost of bookkeeping will differ depending on your needs.<ul><li>Part-time bookkeeper. Typically, a<a class="link" href="https://1800accountant.com/blog/freelance-bookkeeping"> part-time bookkeeper</a> or freelance bookkeeper will work less than a full-time counterpart and have fewer day-to-day responsibilities, such as focusing mostly on accounts receivable or data entry, that aren't as complex. A part-time bookkeeper could start at an hourly rate of $20 and up.&nbsp;</li><li>Full-time bookkeeper. Hiring an in-house bookkeeper can be a great decision if your business has more intricate bookkeeping needs. There are two major drawbacks to bringing on a full-time bookkeeper. They're only one person, so you might have to audit their work from time to time as a precaution to ensure it's correct. They'd also become a full-time employee,<a class="link" href="https://www.allbusiness.com/small-business-finances-bookkeeper-costs-120795-1.html" target="_blank" rel="noreferrer noopener"> with all associated costs</a>, such as healthcare and other benefits that you would need to cover. That's on top of an average salary of $50,000 per year.&nbsp;&nbsp;</li><li>Outsourced bookkeeping. Outsourcing involves<a class="link" href="https://1800accountant.com/blog/how-to-find-a-virtual-bookkeeper"> a qualified external firm</a> handling your business's bookkeeping needs. They might offer different pricing tiers, sometimes as a monthly fee, with a basic plan costing the least and a more fully featured plan costing the most. They might also be able to tailor a plan to your precise needs. An outsourced bookkeeper is usually as qualified as a full-time in-house bookkeeper but is more cost-effective. And they might also have a team backing them up and checking their work to ensure it's error-free. Because outsourced bookkeepers are typically offsite, you lose the immediate access of someone working onsite.&nbsp;</li></ul>If hiring a bookkeeper isn't currently in your budget, but you have employees, consider using an outsourced payroll service for now.<h2 class="wp-block-heading">Bookkeeper Cost Variations</h2>There are cost variations to keep in mind when it comes to selecting the best bookkeeper for your business. For example, location will make an impact if you're interested in hiring a full-time bookkeeper. The salary and benefits required to hire a full-time bookkeeper in Kansas will likely be less than hiring a full-time bookkeeper in New York City. This is one issue to keep in mind during the evaluation process, but there are other considerations and questions you should be asking. Do specific educational requirements or certifications matter? That might cost more. Are you looking for a generalist or a bookkeeper with a particular focus? That might also cost you.Regardless of the variations in cost, there are many scenarios where you can get the expertise you require while staying within budget.&nbsp;&nbsp;<h2 class="wp-block-heading">Hiring a Bookkeeper vs. Bookkeeping Service</h2>If you feel as though you're in over your head or aren't moving the needle as effectively as you had hoped, perhaps it's time to hire a bookkeeper. But<a class="link" href="https://www.business.com/articles/should-you-hire-a-bookkeeper/" target="_blank" rel="noreferrer noopener"> which is best</a> for your business? If you're torn between hiring a full-time in-house bookkeeper and outsourcing to a qualified film, consider the following comparison.<figure><table><tbody><tr><td></td><td>Outsourced bookkeeper</td><td>Full-time bookkeeper</td></tr><tr><td>Cost-effective</td><td>✔</td><td></td></tr><tr><td>Specialized team&nbsp;</td><td>✔</td><td></td></tr><tr><td>Onsite</td><td></td><td>✔</td></tr><tr><td>Licensed and certified&nbsp;</td><td>✔</td><td>✔</td></tr><tr><td>Tailored price tier</td><td>✔</td><td></td></tr></tbody></table></figure><h2 class="wp-block-heading">Bookkeeping vs. Accounting: What’s the Difference?</h2><a class="link" href="https://1800accountant.com/blog/bookkeeping-vs-accounting">Accounting and bookkeeping are processes</a> that businesses use to ensure their financial information is accurate and complete. CPAs and bookkeepers both work with financial data and require a basic knowledge of accounting practices. Because of this, you might think they’re the same, but they're not.&nbsp;Bookkeeping and accounting can be used in conjunction. For example, businesses can use both to generate financial statements. A financial statement serves as the backbone of your business’s financial reporting. These statements, including the income statement, cash flow statement, and balance sheet, are crucial in understanding your business’s performance, liquidity, and overall financial health. Bookkeeping provides the data necessary to create these statements, while accounting ensures their accuracy and completeness. Often, bookkeepers and accountants work closely with each other. Without properly maintained books, accountants wouldn’t have the data they need to create financial models.<figure><table><tbody><tr><td>&nbsp;</td><td>Accounting</td><td>Bookkeeping</td></tr><tr><td>Skills</td><td>Requires the ability to quickly absorb technical information and analytical thinking.</td><td>Requires attention to detail and in-depth financial knowledge to execute the position.</td></tr><tr><td>Objective</td><td>Analyzing the financial situation of a business in order to make projections and suggestions.</td><td>Keeping thorough financial records for businesses by identifying and recording transactions.</td></tr><tr><td>Advisory</td><td>Advising businesses on their best tax strategies and creating financial projections.</td><td>Bookkeepers do not provide advisory for businesses, as their role is recording more than analysis.</td></tr><tr><td>Tasks</td><td>Analyzing and interpreting financial data to provide advice and support to businesses of all sizes.</td><td>Recording and updating financial information in a general ledger.</td></tr><tr><td>Certifications&nbsp;&nbsp;</td><td>Accountants can become CPAs or Enrolled Agents (EA) when they pass the appropriate exam.</td><td>Bookkeepers can become Certified Bookkeepers, but it is often not required.</td></tr></tbody></table></figure><h2 class="wp-block-heading">Why Should You Hire An Expert For Bookkeeping?</h2>Hiring the right bookkeeper to fulfill your business needs can be a decisive advantage over the competition. But you can't just pick anybody to keep accurate records and save your business money. You need small business professionals intimately familiar with your state's and industry's inner workings. You need the full-service bookkeeping experts at 1-800Accountant, America's leading virtual accounting firm for small businesses. Whether it's<a class="link" href="https://1800accountant.com/services/bookkeeping"> bookkeeping</a>,<a class="link" href="https://1800accountant.com/services/small-business-taxes"> small business tax preparation</a>, or <a class="link" href="https://1800accountant.com/services/payroll">payroll</a>, we have the solution you need at a price that fits your budget so you can get back to building your business. Schedule a quick consultation – usually 30 minutes or less – to learn how we can handle your books.

Of all the financial tasks small business owners must address, bookkeeping might be one of the most consequential and time-consuming. Do your books right, and you&#8217;ll gain important insights into your finances that will help you make critical, time-sensitive business decisions. Do them wrong, and it might hinder your ability to compete in the marketplace [&hellip;]

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How Much it Costs for a Small Business Bookkeeper

How Much It Costs to Hire a Bookkeeper for Your Small Business

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