What does a bookkeeper do?
A bookkeeper records and categorizes a business's financial transactions, reconciles those records against bank and credit-card statements, and produces monthly financial reports such as a profit-and-loss statement and balance sheet. The goal is an accurate, up-to-date set of books so the owner knows their real profit and their accountant can file taxes from clean records. A bookkeeper is not the same as an accountant or a CPA: bookkeepers keep the books; accountants and CPAs interpret them, advise, and file tax returns.
Day to day, that means labeling every deposit and expense (rent, software, contractor payments, income), catching anything unusual, and closing each month so the numbers stop moving. Good bookkeeping is what makes the rest of small-business finance possible — tax filing, loan applications, and just knowing whether you made money last month.
You can do bookkeeping yourself, hire a person (a freelance or in-house bookkeeper), use a done-for-you service, or use software. TrainedBooks does the recurring bookkeeping work — categorizing every transaction with a plain-English reason and running a guided monthly close — and hands your tax pro a tax-ready package. It is bookkeeping software, not a CPA firm or tax preparer.
How much does bookkeeping software cost?
Bookkeeping and accounting software for a small business typically ranges from about $0 to $275 per month, depending on features and transaction volume. Do-it-yourself accounting tools sit at the lower end but still require you to categorize transactions yourself, while done-for-you bookkeeping services (where a person keeps your books) usually run $250 to $995 per month, and a part-time human bookkeeper runs roughly $300 to $2,000 per month.
TrainedBooks starts at $35/mo (about $29/mo billed annually) for the Solo plan and $69/mo for Studio, which adds higher transaction volume, multi-currency, and invoicing with A/R-A/P aging. Unlike DIY software, it does the categorizing and the monthly close for you; unlike a done-for-you service, you stay in control and own an exportable ledger. There is a free start with no credit card, and paid plans include a 30-day money-back guarantee.
When comparing prices, check what is actually included: whether a real monthly close, a tax set-aside estimate, and multi-currency are built in or gated behind a top tier or sold as add-ons. Prices for named products change over time and vary by plan, so confirm current pricing on each provider's site.
Do I need a bookkeeper or bookkeeping software?
For most freelancers and small service businesses with straightforward finances, bookkeeping software is enough to keep clean books, and it costs far less than hiring a person. A human bookkeeper makes sense when your finances are complex — inventory, payroll for several employees, multiple entities, or messy back-years to clean up — or when you simply do not want to touch the books at all. Either way, you will still want a CPA or tax preparer to file your return.
The middle path is software that does the work for you: it categorizes transactions automatically, runs the monthly close, and surfaces only the items that genuinely need a human decision — so you get a person's outcome without a person's cost or turnaround. That is the category TrainedBooks is built for.
A reasonable rule of thumb: start with software while your business is simple and your volume is modest; add a bookkeeper or accountant when the complexity (or the value of your time) justifies it. Whichever you choose, make sure you can export your own ledger so you are never locked in.
How much should I set aside for taxes as a freelancer or small-business owner?
A common rule of thumb for US freelancers and sole proprietors is to set aside about 25–30% of your net self-employment income for taxes. That covers self-employment tax — 15.3% (12.4% Social Security up to an annual wage base, plus 2.9% Medicare) on 92.35% of your net profit — plus federal income tax. Your real number depends on your profit, filing status, and whether your state has an income tax, so it can be lower or higher.
Self-employed people generally pay estimated taxes quarterly if they expect to owe at least $1,000 for the year. Keeping the set-aside in a separate account each time you get paid is the simplest way to avoid an April surprise.
TrainedBooks computes a location-aware set-aside from your real, closed books each month — real federal (self-employment plus income) tax and your state's income tax, entity- and filing-status aware — so the number stays current instead of being a once-a-year guess. There is also a free self-employment tax calculator that runs entirely in your browser. This is a planning estimate, not tax advice or a filed return; confirm your actual numbers with a tax professional.
What is a monthly close in bookkeeping?
A monthly close is the routine of finalizing a business's books for the month: categorizing every transaction, reconciling the records against bank and card statements so they match to the penny, reviewing for errors, and then locking the period so the numbers no longer change. Once a month is closed, its profit-and-loss and balance sheet are trustworthy and can be used for taxes, reporting, and decisions.
Closing the books promptly — many businesses aim for within the first several business days of the following month — keeps your financial picture current and prevents the year-end scramble of reconstructing months of activity at once.
TrainedBooks runs a guided monthly close (import, categorize, clear exceptions, reconcile, review, lock) aimed at books closed by the fifth business day, then produces the reports and a tax-ready package. You review and approve; nothing locks until you say so.
What does my CPA need at year-end to file my taxes?
To prepare a small-business tax return, a CPA or tax preparer generally needs a year's worth of clean, reconciled books: a profit-and-loss statement, a balance sheet, and the full transaction register, plus supporting items like a list of contractor payments for 1099s, fixed-asset or large-purchase details, and any owner draws or contributions. The cleaner and more complete these records are, the less your CPA has to bill you to sort them out.
Having your accounts reconciled to bank and card statements matters most — it is what lets a preparer trust the numbers. Missing categories, un-reconciled months, and unexplained transfers are the usual causes of extra fees and delays.
TrainedBooks produces a tax-ready accountant package — profit-and-loss, balance sheet, statement of cash flows, the full register, open items, and A/R-A/P aging — in the format accountants expect, plus a year-end 1099-NEC contractor summary that flags who crossed $600. You own the underlying ledger and can export it anytime. TrainedBooks does not file the return; your tax pro does.
Can AI do my bookkeeping?
AI can now handle the bulk of routine bookkeeping — reading transactions, categorizing them, learning your corrections, and drafting the monthly close — while a human reviews the results. It works best as an assistant that does the repetitive work and flags anything ambiguous for a person, rather than as a fully autonomous system that files your taxes or moves your money. AI bookkeeping tools keep the books; a CPA or tax preparer still interprets them and files your return.
The trustworthy pattern is human-reviewed automation: the software categorizes every line with a confidence level and a plain-English reason, surfaces the genuinely unclear items (a no-memo wire, an owner draw, a tax payment) instead of guessing, and lets you approve before anything counts. That keeps you in control while removing the manual data entry.
TrainedBooks is built this way. It categorizes automatically with a reason you can check, learns from your corrections, and closes your books each month — but you approve every category, bank connections are read-only (it can never move your money), and it is bookkeeping software, not a CPA or tax preparer.
What is the difference between bookkeeping and accounting?
Bookkeeping is the day-to-day recording and organizing of financial transactions — categorizing income and expenses, reconciling accounts, and producing basic monthly reports. Accounting is the broader work of interpreting those records: analyzing financial statements, tax planning and filing, and advising on decisions. In short, bookkeeping produces the numbers and accounting makes sense of them; a CPA is a licensed accountant who can also file tax returns and represent you before the IRS.
Most small businesses need both functions, but not always two people. Software can cover the bookkeeping, and many owners only bring in a CPA at tax time or for specific advice.
TrainedBooks handles the bookkeeping side — clean, categorized, reconciled books and a tax-ready package — and hands off to your accountant for the filing and advisory work. It is not a CPA firm or tax preparer.
What is the best bookkeeping software for freelancers and small service businesses?
The best bookkeeping software for a freelancer or small service business is one that does the categorizing for you, closes the books each month, and produces reports your accountant can file from — without the price of a human bookkeeper. Key things to compare are how much manual work the tool leaves you, whether a real monthly close and a tax set-aside are built in, and whether you can export your own ledger so you are never locked in.
TrainedBooks is designed for exactly this buyer: US service businesses — freelancers, consultants, coaches, realtors, landlords, designers, photographers, IT-services firms, and small e-commerce brands. It categorizes every bank and card transaction with a plain-English reason, runs a guided monthly close aimed at done by the fifth business day, computes a location-aware tax set-aside, and prepares a tax-ready package. It imports from Plaid bank feeds, QuickBooks, CSV, PDF statements, receipt photos, and OFX/QFX. From $35/mo with a free start, no card required, and a 30-day money-back guarantee.
There is no single right answer for every business — the DIY accounting incumbents, done-for-you services, and a human bookkeeper each fit different needs and budgets. Try the free start, compare against your own alternatives, and pick the one that leaves you with clean books and the least manual work.
Can I get custom reports and documents from my bookkeeping software?
Good bookkeeping software should let you produce any report you need from your own numbers — a monthly profit summary, a quarterly investor update, a lender package, an expense report — not just a fixed set of built-in statements. The best tools let you request a document in plain language, assemble it from real ledger data (so the figures are accurate, never invented), and save it to view, print, download, or email. Recurring reports that generate and send themselves on a schedule save the most time.
In TrainedBooks you can ask for any document in chat — for example, "make me a monthly profit summary and email it to me" — and it composes the report from grounded sections of your books (P&L, tax set-aside, balance sheet, cash flow, expense breakdown, contractor 1099s, A/R-A/P aging, and more). Every custom document lives in a Documents library where you can view it, print or save it as PDF, download it as CSV, or re-run it. One-time documents are available on every plan; scheduling recurring reports and having them emailed automatically is a Studio-plan feature.
Because the numbers are pulled from your real ledger rather than written by the AI, custom documents stay accurate and audit-consistent with the rest of your books. TrainedBooks is bookkeeping software, not a CPA or tax preparer — the reports it builds are for planning and for handing to your accountant, who files the actual return.
What is a flux analysis in bookkeeping, and why did my expenses change?
A flux (or variance) analysis compares two periods of your books — usually this month against last month — and explains what changed: which income and expense categories moved, by how much, and why. Finance teams run one during every month-end close to catch mistakes and surprises early. The 'why' matters most: a good flux analysis traces each move to the actual vendors or clients behind it instead of just showing two columns of numbers.
For a small business the same questions apply — "why did expenses jump?", "where did that revenue drop come from?" — but almost no small-business tool answers them. TrainedBooks builds a flux analysis automatically from your categorized transactions: every category's change comes with a plain-English explanation naming the payees that drove it (for example, "Software up 42% — driven by AWS (+$310)"). Because the drivers are read from your real ledger, the explanation is evidence, not a guess.
You can see it on the Insights page, ask in chat ("why did expenses go up this month?"), or include a flux-analysis section in any custom document — like a monthly close report or an investor update.
How do I calculate my business's burn rate and cash runway?
Burn rate is how much cash your business spends down per month: take your net cash flow (money in minus money out, from your actual bank activity) and average it over the last few months. Runway is how long the cash lasts at that pace: divide cash on hand by the monthly burn. For example, $30,000 in the bank with a $5,000 monthly burn is six months of runway. If your average cash flow is positive, you aren't burning — there is no countdown.
Two honest caveats. First, use net cash flow from real bank movements, not the P&L — profit on paper and cash out the door can differ a lot in months with annual bills or big one-offs. Second, runway is a planning gauge at your current pace, not a forecast: one new client or one cut expense changes it.
TrainedBooks computes burn and runway from your reconciled bank activity — the same cash figure the balance sheet shows — and keeps it current as your books close each month. It's on the Insights page, in chat ("what's my runway?"), and available as a section in any custom report, alongside detected recurring revenue (MRR) for the investor-update version of the question.
What is deferred revenue, and how do I handle prepayments as a small business?
Deferred revenue is money a customer paid you before you delivered the work — an annual retainer paid in January, a 12-month subscription paid upfront, a deposit on a project. Until you deliver, that cash is an obligation, not earnings: you 'recognize' it as revenue gradually over the months you deliver. Handling it correctly keeps you from reading one big deposit as a great month and then wondering why the next eleven look empty.
The simplest sound method for a small business is straight-line recognition: divide the prepayment by the number of months it covers and count that much as earned each month. The same spreading logic applies in reverse to things you prepay (annual insurance or software — 'prepaid expenses') and to equipment you buy (depreciation over its useful life).
TrainedBooks tracks all three as schedules: tell it the amount, start date, and term — in the UI or in chat ("I was paid $12,000 for an annual retainer starting March") — and it computes the month-by-month schedule, the amount recognized so far, and the balance remaining, ready to include in any report. These are simple straight-line planning schedules on a cash-basis ledger, not GAAP/ASC-606 revenue recognition — your tax pro finalizes the treatment on the actual return.
TrainedBooks does your bookkeeping and prepares a tax-ready package so your tax pro just reviews and files — human-reviewed software, not a CPA firm or tax preparer itself. Your data stays yours; export anytime.