Regardless if you have started your business or not, if you are writing checks for business expenses out of your personal checking account, stop whatever you are doing right now, and go to your bank and open up a business checking account. ALWAYS keep business and person expenses and revenues separate. Come tax time you and your accountant will be very gratefull! Now that we have that out of the way lets talk about how your can organize and automate your booking tasks and ways you can create financial report that you will need for your own use and for any lending you might plan on.
The big kahuna in the world of small business accounting software is Quickbooks. I have personally used Quickbooks for my businesses for over 20 years and I love it. I find it easy to use, intuitive and feature rich. Once the system is setup you merely write your checks or record your revenue and other info such as vendors into the system and Quickbooks takes care of all the booking chores seamlessly. The system allows you to create invoices, keep track of vendors, maintain employee payroll and provide all the financial reports you will ever need. There are two ways you can acquire it. The online version that keeps your data on the Cloud has an entry level price of under $10/mo. Or you can purchase Quickbooks Pro for about $150 and install it on your computer. Either way works fine.
Almost every CPA or bookkeeper in the U.S. is familiar with and uses Quickbooks. Come tax time each year I merely backup my company files to a thumb drive and hand it to my accountant and that’s it. If you decides to use Quickbooks for your business (or most any small business accounting software) I highly recommend that you have your accountant setup what’s call The Chart of Accounts in the beginning before you try to use it. Think of the Chart of Accounts as the foundation of your business. If a house is build on a crooked foundation the entire project will eventually have to be scraped and started over again. The same is true if you try to use Quickbooks if your Chart of Accounts has errors or omissions. Once this is done, you’re good to go, and everything else will seem easy after you’ve become accustomed to it.
While Quickbooks is hard to beat in my book, some may find it to be overkill for their needs and want something a bit simpler. If you are a shoebox bookkeeper on a shoe string budget, take a look at Wave Accounting . The system performs accounting, invoicing, and has a reporting feature to help you put together Profit and Loss and Balance Sheet reports which you will need for a loan. The company does not charge for their basic system, but does charge for additional plug-ins such as payroll and payment processing.
Another really slick cloud-based accounting system is FreshBooks. FreshBooks has a very user friendly interface and you can use it from your mobile device as well as a desktop. It’s strengths include its strong invoicing and billing capability and time management features. The system is based on “single entry” bookkeeping principals meaning there are no debits and credits to keep up with like traditional double entry systems. The system is definitely targeted toward the small business owner with no accounting background and needs a simple way to keep track of revenue and expenses and perform other tasks, especially if you are on the go. Users speak very favorable about the customer service. The company offers a free trial which you enroll in at their website. The licensed version is about $12/month.