Bookkeeping is an absolutely vital, but time-intensive task. Recently, we’ve seen many new online bookkeeping services which are designed to take most bookkeeping activities off of your plate, so you can focus on running your business.
In this article, we’ll cover all the pros and cons of Merritt Bookkeeping so you can make an educated decision: Is Merritt the right bookkeeping service for your business?
Merritt Virtual Bookkeeping
Merritt Bookkeeping is a virtual bookkeeping service, meaning that all bookkeeping tasks are done remotely by a bookkeeper on Merritt’s team. You won’t meet your bookkeeper in person; all communication is via phone and email.
The internet has enabled virtual bookkeeping as a cost-effective option for small businesses that don’t want to — or simply can’t — manage their own bookkeeping. Both in-house and contracted bookkeepers typically charge by the hour, so you never know exactly what you’ll pay each month.
With Merritt’s virtual bookkeeping service, you pay a flat fee every month, which makes your expenses very predictable.
Keep in mind, virtual bookkeeping services won’t give you the same depth of personalization and customer service as you would have with a traditional bookkeeper. But if you know what you are looking for, chances are you can find a virtual service that completely satisfies your bookkeeping requirements.
Company History
Merritt is headquartered in San Diego, California, though its clients are located across the United States.
Since the company’s start in 2009, Merritt has been featured in Chamber of Commerce, Fit Small Business, Business.org, and the San Diego Business Journal. They consistently appear on lists of top virtual bookkeeping services, though their rank has fallen with the ever-growing competition from new services.
Merritt has grown slowly but steadily over the last decade by only accepting a limited number of new clients every month. They have maintained quality as demonstrated by their excellent customer feedback and an A+ rating from Better Business Bureau.
How Does Merritt Work?
Merritt Bookkeeping is run by a small team in San Diego. The company outsources the actual bookkeeping to an unspecified number of overseas contractors. The San Diego-based team monitors quality and is available to answer client questions.
The bookkeepers manage your financial data using QuickBooks. Read-only versions of bank statements import into the QuickBooks platform automatically.
When you sign up, a Merritt employee will help you connect your bank and merchant accounts.
Every month, one of the bookkeepers will categorize your transactions into the appropriate chart of accounts, reconcile Quickbooks with your bank statements, and then send you PDF reports of your financial data including:
- Balance Sheet
- Income statement, detailing yearly comparison over the last three years
- Profit and Loss Statement, detailing monthly comparison over the last twelve months
- Graphical representation of income and expenses over the last twelve months
You will also receive a cloud-based spreadsheet that details all of your transactions.
Unlike many virtual bookkeeping services, Merritt does not provide you with access to the bookkeeping software. Keep this in mind if you want real-time financial reports.
Merritt only charges you once your account has been categorized, reconciled, and sent as reports. Of course, this means that Merritt is only doing your bookkeeping once per month. Consequently, your books will only be completely up to date once per month.
Merritt does not file taxes, but you can share a link to your Merritt interface with your CPA when tax season rolls around.
How Merritt Stands Out
Merritt offers an extremely simple service, but it has some good things going for it. Here is why Merritt might be a bookkeeping solution to keep on your radar.
Merritt Uses QuickBooks
Merrit uses QuickBooks software, which is a positive quality for a number of reasons. QuickBooks is one of the most popular bookkeeping softwares because of its extensive list of features.
Even though you won’t be interacting with the QuickBooks software, Merritt bookkeepers will have a thorough knowledge of the platform and will use it accordingly to manage your books.
One of the best features of QuickBooks is the ability to track by class and project. If you would like to analyze the profit and loss of different business initiatives, you can have Merritt set up class tracking for you.
Data stored in QuickBooks is easy to transfer, should you choose to stop working with Merritt. Data is transferrable to external data storage or to another QuickBooks account.
And with QuickBooks being one of the most popular bookkeeping softwares in the world, chances are that most bookkeepers you choose to hire in the future will know how to use the platform as well. This translates to easier switching costs.
No Software Learning Curve
Not having personal access to your data QuickBooks is an upside for some businesses, and a downside for others. As an upside, there’s no software learning curve.
So how do you access your information? Merritt has developed a proprietary “interface,” which is actually a very simple client portal that links to your summary reports. You provide your CPA with a link to the interface so that they can gather data needed to file your taxes.
Fixed Pricing
Unlike a lot of other bookkeeping services with variable rates, Merritt charges a flat rate of only $250 per month. The price is the same regardless of the size of your business or the number of transactions, accounts, monthly expenses, or number of employees.
This pricing structure is about as simple as it gets. And this price makes it one of the more affordable bookkeeping pricing packages available.
Of course, larger businesses are likely to require a deeper level of financial reporting than a small business. Because Merritt’s service is so basic, it is designed to fulfill the needs of small businesses.
No Need to Upload Documents
Merritt gets its information through bank feeds, so they do not require you to upload any receipts, invoices, or documents. It should be noted that you should still hold on to receipts and financial documentation should you get audited by the IRS.
If you want to store documents, you may be frustrated by the fact that even though QuickBooks has a receipt scanning app, you won’t be able to take advantage of it. If you want to personally keep track of your receipts, you can download a free receipt-scanning app like Genius Scan.
Excellent Customer Support
The online community highlights Merritt’s professional and responsive customer service. We decided to test it for ourselves, and found that email response time generally falls within two hours. Responses are thorough and thoughtful, and fully answered every question.
Merritt can also be contacted by phone during regular business hours. Other virtual bookkeeping services put a lot of effort into increasing the number of ways that support can be contacted. Merritt sticks to the basics with everything – from means of contact to financial reporting.
90 Day Money Back Guarantee
Of all the virtual bookkeeping services, the 90 day money-back guarantee is the longest that we have encountered. Although Merritt does not offer a free trial, you can test Merritt out for three months with zero risk.
If you try Merritt and decide that it’s not the right option for you, you must submit a money-back request via email to the support team before 90 days from the day you receive your first full set of financial reports.
We highly recommend that you try Merritt out, even if just for a month. Merritt is one of the more affordable virtual bookkeeping solutions, and if the basic services they provide work for you, then it could save your business a lot of money in the long run.
Where Merritt Bookkeeping falls short
For all of Merritt’s positive reviews, it isn’t the right virtual bookkeeping solution for every business. If one of the following shortfalls could cause an issue for your business, explore some alternatives to Merritt.
No Customization
Merritt does not let you customize any features beyond the chart of accounts and a handful of financial reports.
QuickBooks has a limited API, but Merritt takes limits a step further by not allowing you to take advantage of the third party apps that QuickBooks will connect with.
Through Merritt, you cannot connect to any third party apps that automate bookkeeping activities. As an example, Gusto is a popular payroll service that syncs seamlessly with most bookkeeping software. If you are a Merritt client, you can still use Gusto, but you will have to manually upload your payroll information, although it could be synced automatically.
No Sub-Accounts
Speaking of the chart of accounts, Merritt does not utilize sub-accounts. For example, if you are in the real estate business and one of your accounts is titled “Property Related Expenses,” you cannot break property related expenses down into maintenance, materials, utilities, etcetera.
Merritt explains that they don’t use the sub-accounts feature for two reasons. First, because sub-accounts make the monthly reports look messy and hard to read. Second, because of a QuickBooks export limitation which doesn’t show the parent account of the sub-accounts.
Buth the lack of sub accounts can make it difficult to really understand where your money is going. The default chart of accounts in QuickBooks is extremely broad. Without sub accounts, you’re missing out on some important financial data…. even if your chart of accounts is appropriately customized.
No Accrual-Basis Accounting
Merritt uses cash basis accounting, rather than accrual basis accounting because they only have access to your bank statements.
With cash basis accounting, a transaction is only recorded when money changes hands. For example, an invoice would not be recorded in the ledger until it gets paid. Most small businesses default to cash basis accounting because it is a simpler accounting method and gives a better picture of the actual cash on hand.
But for businesses that do a lot of invoicing or have outstanding payments, your business will need accrual accounting to get a true picture of the financial position. Accrual accounting is recognized in the GAAP (Generally Accepted Accounting Principles) while cash basis is not.
In turn, the lack of accrual basis accounting means that Merritt will not track your accounts payable, accounts receivable, or inventory.
And although QuickBooks software does allow you to toggle between cash and accrual basis accounting, you can’t take advantage of this feature. If you want to maintain an accrual system, you will have to provide Merritt with those balances yourself and have them make adjustments.
No Dedicated Bookkeeper
Merritt’s team coordinates work, so you will probably have a different bookkeeper working on your account every month. Merritt says that this is because of inevitable employee turnover, and they don’t want only one bookkeeper trained per account.
The downside to this is that the bookkeeper will not really know your business and how you operate. Bank statements don’t always provide a lot of information regarding what a transaction actually is. So without familiarity with your business, the bookkeeper can easily mis-categorize a transaction.
If you hire Merritt because you want to be hands-off, you will certainly still need to review where your transactions are to be sure they have been categorized correctly. Merritt concedes that they use their “best guess” when categorizing your transactions, and it is your responsibility to make sure that your transactions end up in the correct account.
No Personal Access to QuickBooks Files
You already know that Merritt won’t let you see your QuickBooks file. This may not be an issue for some businesses. But not being able to see the behind-the-scenes management of your monthly financial reports can make it difficult to track down fraudulent transactions and catch an inaccurate transaction.
And one of the major benefits of QuickBooks Online is that you can see your financial position at-a-glance, at any time, anywhere. With Merritt, you have to wait for next month to get an updated report.
Additional Services provided by Merritt
Merritt sticks to very basic bookkeeping, but the company has a few additional offerings that make its virtual bookkeeping service more comprehensive.
File 1099’s
The only tax filing that Merritt will take on are 1099’s. Every contractor you spend over $600 on per year must complete a 1099 form.
Merritt charges $75 to prepare a 1099 form for the first contractor, and $8 for each additional one. So if you need eight 1099’s issued, it will cost you $131.
Of course, you will still be in charge of collecting the W-9 forms from your contractors. All Merritt does is take information from the W-9’s and populate it into the QuickBooks 1099 filing platform.
If you filed 1099’s yourself in QuickBooks, it would cost you $14.99 to e-file your first 1099, and an additional $3.99 for every contractor thereafter.
Each January, Merritt will send you an email asking if you want them to prepare your 1099’s. If you decide to take this route, Merritt will send a follow-up email requesting your W-9 forms.
Merritt also provides you with detailed information regarding how to independently file your 1099’s without using QuickBooks. If you do not have a personal QuickBooks account and do not want Merritt to file your 1099’s for you, this is a good but time-consuming option.
Catch Up Bookkeeping
Some businesses haven’t followed our tips and kept up with their books. If that sounds like you, Merritt can bring your messy historical records up-to-date.
If you haven’t used QuickBooks before, or if you don’t have any organized bookkeeping records, Merritt will charge $140 (a 25% discount) for each month that you are behind.
The good news is that if you have a QuickBooks file and your records are mostly up to date- but you’re only missing a few transactions- Merritt will charge only $50 for each month that you’re behind.
Alternatives to Merritt
There are a lot of virtual bookkeeping services available. Merritt differentiates itself with simplicity on every level, which is both a positive and a negative. Pricing is easy and predictable, your books are mostly accurate and updated, and you get good good customer service.
This is exactly what many small businesses need. However, Merritt likely isn’t comprehensive enough for businesses that want scalability and the ability to easily reference their finances.
Here are a few viable alternatives to Merritt, for businesses that are looking for a deeper level of financial reporting.
1. Maxim Liberty Bookkeeping
Established in 2005, Maxim Liberty Bookkeeping Services is a reputable full-service virtual bookkeeping service provider catering to businesses and accounting firms. Known for top-quality service at a very affordable price, Maxim Liberty supports all widely used bookkeeping software. Maxim Liberty also provides tax preparation and filing services.
Over the many calls I had while interviewing their CEO, I was happy to learn that they provide flexibility through options to cancel or suspend services and they also reassure clients with a 100% money-back guarantee on the first payment. Their high rate of client retention speaks to the service they provide.
When you work with Maxim Liberty you’ll have a dedicated supervisor available to help answer any questions that come up. Also notable, Maxim Liberty supports cash or accrual accounting on all plans and offers options for monthly, weekly, or daily updates.
Maxim Liberty Features
- Dedicated supervisor and named bookkeeper(s)
- Regular, customizable updates
- Data Entry and Catch-up services
- Bank Reconciliations
- Accounts Payable/Billing Management
- Accounts Receivable/Invoicing Management
- Tax Preparation
- Tax Filing
- Payroll Processing
- Financial Reporting
Maxim Liberty Downsides
Maxim Liberty Bookkeeping’s use of international team members may be a concern for some business owners as other services hype having all staff in the U.S. However, Maxim Liberty is incorporated in the USA and been around since 2005. They perform background checks on all their bookkeepers and train them on the importance of security, privacy, and integrity.
Having a team in India allows Maxim Liberty to offer very competitive pricing, which particularly benefits small to medium-sized businesses.
While the idea of a bookkeeper working in another country may initially seem concerning to some, Maxim Liberty has demonstrated that with proper management and safeguards in place, it can be a valuable and secure option for businesses seeking efficient and cost-effective bookkeeping services.
Maxim Liberty Value
Maxim Liberty presents flexible, no-lock-in plans, complemented by a 100% refund policy on the initial payment if you aren’t fully satisfied.
Each plan comes with a dedicated supervisor along with a named bookkeeper. The supervisor acts as the main point of contact for the clients and oversees the work of the bookkeeper, ensuring quality.
All Maxim Liberty plans include:
- Cash or accrual accounting
- Unlimited accounts
- Data entry
- Categorization
- Bank reconciliation
- Financial reporting
- Catch-up and clean-up bookkeeping
| Maxim Liberty Plan | Features | Monthly Price | Additional Hours |
|---|---|---|---|
| Monthly Updates | Up to 5 hr/mo | $60 | $12/hr |
| Weekly Updates | Up to 10 hr/mo | $120 | $12/hr |
| Daily Updates | 20 hr/mo, AP/AR, Sales Tax & Payroll | $240 | $12/hr |
| CPA Plan | 30 hr/mo, Unlimited Clients | $270 | $9/hr |
For a limited time, Maxim Liberty is offering a one-month free trial of their bookkeeping service.
Maxim Liberty Add-on Services
Maxim Liberty’s selective offering of add-on services aligns with their area of expertise. This focused approach delivers superior value at competitive prices, reflecting their dedication to excellence in their core practices.
- Tax preparation & filing
- 1099 filing
- CPA support
- Payroll*
- AP / AR*
- Sales tax*
* Standard on the Daily Updates plan
2. Bookkeeper360
Bookkeeper360 is a full-service accounting platform developed for business owners. You can choose to monthly or weekly reconciliation and, like most virtual bookkeeping services, the pricing is based on your business’s monthly expenses and whether you use cash basis or accrual accounting.
With many add-ons, the Bookkeeper360 platform is highly customizable and can take on most of your back office duties. Notably, Bookkeeper360 is the only provider on our list that offers HR and Payroll services themselves (other providers may offer the service, but outsource the work to other companies).
Bookkeeper360 Features
- You can choose to use QuickBooks or Xero software.
- Bookkeeper360 integrates with popular platforms including Shopify and Expensify, making it a good option for businesses that sell products and services online.
- The service handles monthly reconciliation of bank statements.
- Full-service payroll is available for as low as $45 per month.
- Add-on service can include an outsourced HR department.
- Customer service can be contacted via phone, email, and online chat.
- All staff is based in the USA.
Bookkeeper360 Downsides
The base price for Bookkeeper360 is slightly higher than some other services, so if you’re looking for the lowest cost possible you may want to consider Maxim Liberty.
Bookkeeper360 Value
Bookkeeper360 is easily scalable and is a good choice for medium-sized, growing businesses that want to outsource their bookkeeping, accounting, HR, and payroll with a single provider they trust.
| Bookkeeper360 Service | Features | Pricing From |
|---|---|---|
| Bookkeeping | Cash or accrual bookkeeping, monthly or weekly reconciliation | $399/mo |
| Controller | Bookkeeping, advanced reporting, annual budget, KPIs | $1,149/mo |
| Catch-up Bookkeeping | Create & restructure chart of accounts | $1,000 |
| Tax | Business & individual taxes | $350 |
| Payroll Administration | Time tracking, payroll processing | $200/mo |
| Sales Tax | Monthly or quarterly filing, state registrations, nexus studies | $125/mo |
| Back-Office | AR / AP, inventory management, expense management | $150/mo |
| CFO Advisory | Projections, forecasts, financial plans, strategic growth & vision | $1,500/mo |
* Annual billing will save you 10%.
Bookkeeper360 Available Add-Ons
- Comptroller / CFO Advisory
- Tax Prep and Planning
- Back-Office
- HR and Payroll Solutions
- Revenue Recognition
- Category Tracking
- Inventory Management
- Multi-Entity Reporting
Final Word on Merritt Bookkeeping
Merritt Bookkeeping is one of the most limited virtual bookkeeping services. It offers a very basic service and openly acknowledges that the team is “mainly just sorting your transactions.”
Merritt’s trademarked tagline, “Never worry about bookkeeping again” is slightly misleading, as you will need to review your transactions to look out for mistakes. And without a designated bookkeeper, you cannot be sure that any of their bookkeepers really feel accountable for mistakes.
However, for businesses that just want to have updated books with some level of accuracy, Merritt can be a good solution. It will provide simple businesses with just enough information to make informed business decisions. Also, Merritt’s responsive customer service is not something to be taken for granted.
The best way to determine if Merritt Bookkeeping is the best solution for your business is by testing it out and taking advantage of their 90 day money-back guarantee period.
