"Allowable deductible expenses?... We have no idea. No one's been keeping track of that." you gulp as you tell your accountant sitting across from you in a small office. He's heard this before from small businesses starting out and then proceeds to give you an estimate for your work that will cost much more than you can afford. That's not an option for you, you'll have to look elsewhere. "Got any other suggestions?"
An accountant may refer you to a bookkeeper to get your books straightened out, because that is what bookkeepers do. Accountants work closely with bookkeepers, usually subcontracting their services out to them from work that they have but do not want to do. How does this work? Let's say in the above situation, you grin and bear the cost and go ahead with the accountant's estimate. CA's are typically not going to do all that work. They will most likely charge you $100 plus an hour and then simply call the bookkeeper they use to do the work for $35 an hour, putting that $65 an hour in their pocket as a "management fee". That's the truth!
So why is it a good idea to hire a bookkeeper from the beginning? A bookkeeper knows the ins and outs of business. They can advise you on which expenses can be written off legitimately and what you should be keeping as far as receipts, invoices, and bills go. It helps a lot to make the first hire a bookkeeper in your company, even if the bookkeeper is an outside bookkeeping service because you are likely not able to hire a bookkeeper right away in most small business situations.
There is always the option of doing the books by yourself, and perhaps that is a good option if you are very organized and careful. Here's the problem with that idea. At the start of your business venture, you are likely not all that busy. Your daily routine will be slower and more geared to finding more business and clients. It's easy to do the bookkeeping at this point. The problem comes when money comes flowing in and with that money comes obligations of doing work. At this point, even the most careful and diligent self employed person does not have time for doing bookkeepers work, so this is typically when a person will hire a bookkeeper. For some, this is already too late because the books are already a mess and the bookkeeping company is going to have to come in and clean up the mess.
If you are in this situation, making the first hire a bookkeeping company can be as easy as picking up the phone, or Googling for bookkeepers in your area.