The cheapest way to do bookkeeping for most one-person businesses is a free spreadsheet filled from bank statements once a month, with receipts kept in a free cloud folder. It costs $0 in cash and an hour or two of time. Software or paid help only becomes cheaper once your hours are worth more than their fee.
What is the cheapest way to do bookkeeping for a tiny business?
For a tiny business with one bank account, a card and fewer than about 100 transactions a month, the cheapest way to do bookkeeping is a spreadsheet you update monthly from statements. Nothing to subscribe to, nothing to cancel. The real cost is the hour or two of your time each month.
"Cheapest" has two parts, and comparisons that count only one of them mislead. The first is cash: subscriptions, fees and one-off purchases. The second is time: the hours you spend on the books, valued at what you could earn or would pay someone else for that hour. A free tool that eats five hours a month is not cheap for an owner who bills $60 an hour.
The spreadsheet wins for tiny businesses because both parts stay small:
- Cash stays at zero if you already have Excel, Google Sheets or Numbers.
- Time stays low because the bank statement already lists every transaction in date order with a running balance. You add categories and check the total.
- Nothing locks you in. The file is yours, readable by any spreadsheet program, and easy to hand to a preparer.
The method behind it is usually cash basis: income when received, expenses when paid. That matches the statement row for row. The spreadsheet also gives you a profit figure for free. Profit and loss from bank statements in a spreadsheet shows how to turn categorized rows into a monthly P&L with a few SUMIFS formulas.
Five bookkeeping setups ranked by cash and hours a month
Five setups cover nearly every small business: a typed spreadsheet, a spreadsheet filled from exports or converted statements, a free bookkeeping app, paid accounting software, and a bookkeeper. Ranked by total yearly cost for a tiny business, the filled spreadsheet usually comes first and the full-service bookkeeper last.
The table puts example numbers on each setup for a business with about 60 transactions a month. Cash costs are placeholders, not quotes for any product. Hours are estimates. Your own time is valued at an example $30 an hour.
| Setup (example) | Cash per month | Your hours per month | Yearly cash | Yearly time at $30 | Yearly total |
|---|---|---|---|---|---|
| Spreadsheet, rows from CSV or converted PDFs | $0 to $6 | 1.0 | $0 to $72 | $360 | $360 to $432 |
| Free bookkeeping app with bank connection | $0 | 1.0 | $0 | $360 | $360 |
| Spreadsheet, rows typed by hand | $0 | 2.0 | $0 | $720 | $720 |
| Paid accounting software, low tier | $20 | 0.75 | $240 | $270 | $510 |
| Bookkeeper, monthly fee | $250 | 0.25 | $3,000 | $90 | $3,090 |
Two things stand out. The free app and the filled spreadsheet land close together, so the choice between them comes down to the limits and lock-in covered in free bookkeeping app vs spreadsheet for a tiny business. And typing rows by hand is the only free setup that loses to paid software, because of the hours.
Change the hourly value and the ranking moves. At $10 an hour, typing by hand is cheaper than software. At $80 an hour, a bookkeeper starts to close the gap for a busy business.
The hidden hours in free bookkeeping tools
Free bookkeeping tools hide their cost in hours: typing rows, fixing amounts stored as text, chasing a missing transaction, or re-categorizing after a bank connection drops. None of these show on a price page. They show at the end of the month, when the books take twice as long as you planned.
The biggest hidden hours, in rough order:
- Data entry. Typing 60 rows by hand can take most of an hour, and every typed row is a chance for a transposed digit.
- Cleanup after copy and paste. PDFs pasted into a sheet often split descriptions across lines, drop minus signs or turn amounts into text that will not sum.
- Reconciliation hunts. When the month does not balance, finding the one missing row can take longer than the rest of the work.
- Broken bank connections. Free apps that connect to your bank sometimes stop syncing, and the gap has to be filled from statements.
- Year-end scramble. Months skipped during the year get done in a rush in March, slower and with more errors.
Each one has a cheap fix. Bank CSV exports or a converter remove most data entry. A balance check every month keeps hunts short. A fixed day each month stops the year-end scramble. CheapBankConvert, which is preparing to launch, fits the second fix: it converts one PDF statement to CSV or Excel for an early one-time price of $2.99 for up to 10 pages, with no subscription. The CheapBankConvert homepage has the details.
Is cheap accounting software cheaper than a spreadsheet?
Cheap accounting software is cheaper than a spreadsheet only when it saves more of your time than it costs in fees. For a business with a few dozen rows a month, it rarely does. For one with several hundred rows, invoicing and a bank feed that works reliably, it often does.
Software saves time in specific ways: bank feeds bring transactions in automatically, rules categorize repeat vendors, and invoices sent from the software mark themselves paid. If you do not use those features, you are paying for a spreadsheet with a login.
Ask three questions before subscribing:
- How many rows do I have a month? Below about 100, the time saved is small.
- Do I send invoices? Built-in invoicing that links to payments saves real effort.
- Will I keep paying? Many plans raise prices after an introductory period, and leaving means exporting your data.
Lock-in is the cost that is easiest to miss. Once a year of transactions lives in an app, moving away means exporting reports, rebuilding categories and checking that opening balances carry over. That takes an afternoon or more. A spreadsheet has no exit cost at all, which is worth something even if you never use it.
A full breakdown of yearly software costs, including the add-ons that push a low tier up, is in small business accounting software cost per year.
Part-time bookkeeping help without a monthly retainer
Part-time bookkeeping help without a retainer means paying a bookkeeper by the hour or by the job, only when you need them. The cheapest pattern for a small business is to keep the books yourself all year and pay for one review before the tax return. That buys a professional check for a few hours' fee.
Good one-off jobs to buy:
- A year-end review, where the bookkeeper checks categories, spots missing items and confirms each account reconciles.
- A setup session, where they help you pick categories that match your tax form.
- A catch-up, if you have fallen months behind and need it fixed once.
Pricing a one-off review before you book it
A one-off review is easiest to price when you can tell the bookkeeper exactly what they will receive. Before you ask for a quote, count three things: the number of accounts, the number of months, and the rough number of rows across the year. "Two accounts, twelve months, about 700 rows, already categorized" lets a bookkeeper estimate hours with some confidence. "Can you look at my books?" invites a cautious, padded number.
Ask for the quote as a fixed price for the review, with any extra work billed only after they tell you what it is. That keeps a small job from growing quietly. If the review turns up a systematic problem, such as a category used wrongly all year, ask them to show you one corrected example and fix the rest yourself. Paying for the lesson once is cheaper than paying for the fix every year.
To keep the hours down, hand over a clean package: every statement for the year, the spreadsheet with categories filled in, and receipts named by date and amount. The bookkeeper then spends their time on judgment rather than typing, which is the part worth paying for.
When the cheapest bookkeeping setup costs more at tax time
The cheapest bookkeeping setup costs more at tax time when it skips the work that supports your deductions. A spreadsheet with no receipts, no notes on split expenses, and no balance check can leave you paying a preparer to rebuild the year, or giving up deductions you cannot prove.
The expensive failures are predictable:
- Uncategorized rows. A preparer cannot claim a deduction for a row labelled "misc".
- No receipts for large expenses. A statement shows payment, but not always what was bought.
- Personal and business mixed together, so every row needs a conversation.
- Months missing, because the routine lapsed in the summer.
The fix costs nothing but attention. Keep a deductions view as part of the same workbook, so every deductible row is tagged as you go. A tax deduction tracker spreadsheet you fill from statements gives that view a ready layout. With it, the cheapest setup stays cheap through April.