Still deciding
You have QuickBooks. Do you still need a bookkeeper?
Software categorises. It does not verify, and it will produce a confident, tidy, completely wrong set of books without ever telling you.
Reviewed by Darren Lim, US CPALicence CPA.742536028 min read
It connects to the bank. It categorises automatically. It produces a P&L on demand. The marketing is not lying about any of that.
The question is not whether the software works. It is what "working" means, and there is a specific gap between what it does and what you are relying on it for.
The five-minute test
Before any argument, run this on your own file. It settles the question faster than anything written here.
- Open your last completed month's bank reconciliation report.
- Compare the ending balance on it to the ending balance on the bank statement for the same date.
Three possible outcomes:
- They match, and you can find the report. Your file is probably in decent shape. The rest of this article is optional.
- They do not match. Every number in your file is unverified, including the ones your tax return was built on. There is a method for finding the difference.
- There is no reconciliation report, because nobody has been reconciling. This is by far the most common result, and it means the software has been categorising transactions without anyone ever checking that the set is complete and correct.
That third outcome is the whole point. The software will happily produce a confident, tidy, professional-looking P&L from a file nobody has verified, and it will never once mention that fact.
What the software genuinely does
Credit where it is due — this is real work it does well:
- Imports transactions from the bank and card feeds
- Suggests categories, and learns from corrections
- Produces reports instantly, on any date range
- Handles invoicing, payments and sales tax mechanics
- Stores receipts against transactions if you photograph them
For a sole operator with one bank account, one card and forty transactions a month, that genuinely can be enough — provided somebody reconciles it. That is a real scenario and if it is yours, you do not need to hire anyone yet.
What it does not do, and does not tell you
It does not verify completeness. The feed missing three days is invisible. A closed account nobody reconnected is invisible. The software reports on what it has, and cannot know what it does not have.
It does not know a truck from an expense. A financed vehicle posted to "equipment expense" is accepted without complaint. It should be an asset and a loan, and the difference runs through your balance sheet, your depreciation and your tax return for years.
It guesses at categories, confidently. The auto-categorisation is a suggestion built on the payee name. A supply house charge that was actually a personal purchase, a transfer that looks like income, a refund booked as revenue — all accepted silently. Small errors, repeated four hundred times, produce a P&L that is wrong in a consistent direction.
It does not separate what a contractor needs separated. Install against service. Insurance against retail. Per truck, per route, per crew. That requires a chart of accounts built for the trade and job-level discipline, and no software does it out of the box.
It does not close a month. Accruals, prepayments, depreciation, payroll ties, loan splits between interest and principal — none of it happens by itself.
It does not tell you what any of it means. This is the largest gap and it never appears in a feature list. A P&L that says gross margin fell four points does not say why, and the answer — material prices, a crew, a customer, a category of work you priced two years ago — is where the money is.
The honest answer
If your books are simple and someone reconciles monthly, the software plus your own discipline is genuinely enough. Do not let anyone tell you otherwise to sell you a service.
If nobody reconciles, you do not have books. You have a categorised list of transactions that resembles books, which is more dangerous than an obviously messy shoebox — because a shoebox does not fool anyone, and a tidy P&L built on an unreconciled file fools everyone including you.
Once there are crews, subs, trucks and jobs, the questions you need answered stop being questions the software can answer at all. Which jobs made money is not a report you run. It is a consequence of how transactions were coded when they arrived.
What actually changes when someone does it
You keep the software. That is worth saying plainly, because contractors often assume hiring help means a migration and a new system to learn. It usually does not, and it should not.
What changes is that every account gets reconciled, the categorisation gets checked by someone who knows what a contractor's books should look like, the month gets closed properly, and someone tells you in a paragraph what the numbers say. The file you already have gets more reliable rather than replaced.
Related
How we do this
We build this into your books. Starting with a month that costs you nothing.
We work inside the software you already have rather than moving you somewhere new, and the monthly close is the part the software cannot do: reconciling, verifying, and telling you what the numbers mean.
- Every transaction categorized, accounts reconciled, the month closed
- Reviewed and signed by Darren Lim, US CPA — licence CPA.74253602
- The Two-Day Guarantee: Your first month back in two days, or the next month is free.
There is a five-minute check in this article that tells you whether your file is reliable. If it fails, the fix is one properly closed month — and the first one is free.