How to Set Up a Business Bookkeeping System that You Can Manage Yourself
Accounting software may not be the first thing that enters your mind when starting a company. However, after you’ve gotten started, and your finances are completely unorganized – you may think again.
You can hire an accountant or bookkeeper to handle the accounting tasks for you, but if you are on a budget, there are software programs that help you easily manage business accounting yourself.
FreshBooks is one of the latest cloud accounting programs on the market. People love it because it is super simple, plus you can do things like send professional invoices, accept credit card payments and more. It makes the bookkeeping aspect of business much quicker and much less work, so you can get back to doing other stuff you enjoy more.
If you are new to business accounting, you may not have any idea of what to do or what software to get. I was in this situation myself, thinking excel spreadsheets were doing just fine. Little did I know what I was missing. Just know that no matter what program you decide to go with, something is better than nothing.
I ended up meeting with a tax accountant who turned me on to Quickbooks Pro, and his assistant took an hour to help me set up my business and learn the software on my computer. It took me a couple of weeks to feel fully comfortable with it – simply because there are so many things you can do with it (checks, payroll, multiple repost, etc.) that is was easy to get distracted.
In the end, I am extremely happy with my decision. The software has saved me a lot of time, I feel much more organized financially, and when tax time comes I can quickly print out the annual profit-loss statement and other reports to give me the numbers I need to enter into my business tax returns.
The Downside of Quickbooks Pro
Quickbooks Pro comes with so many features and capabilities, it is easy to become overwhelmed. My suggestion is to stick with the basics. Keep it simple and carry out only the tasks you need to (ie. inputting income and expenses and running year-end reports). I’m sure you could spend weeks learning all of the crazy cool stuff the software does, but don’t scare yourself with it.
This is a great piece of software for small businesses – however, you don’t need to invest in the latest version. Save yourself some money and get a version that is a year or two old. It’s not that different.
Something to note is that you can purchase software you can install on your computer, or you can use their cloud version and pay a monthly subscription.
If you plan on upgrading your program every couple of years, the cost end up being about the same. If not, the online version can be the more expensive option but more convenient because you don’t have to upgrade it – and it’s accessible on more devices since it’s in the cloud.
Of course, getting paid is a large part of accounting – and of course running a business. Whether you bill your clients online or invoice them in person or via the mail, invoicing software can make your business life a lot easier.
Not only does invoice software create professional invoices that you can submit to your customers, it keeps track of your paid and unpaid bills neatly in a database that you can access and review anytime you want.
This takes a lot of the work off your shoulders as a business owner – and for some people it may be the difference between having to hire a bookkeeper or not. Having the ability to quickly and easily invoice clients is a nice option to have, since it can turn into a huge cost savings.
Let’s look at some of our options.
Cloud-Based Accounting Programs:
There are accounting programs that you can use completely online where you don’t have to download any software. They are designed for small businesses, so they are affordable (around $20/month) and easy to use. Because of this, they don’t usually have lots of features, but you probably don’t want them or need them anyway.
Freshbooks (mentioned above) includes invoicing. It can format your invoices for you and submit them to your clients, and it can help with items like sales taxes, recurring payments and late payment reminders. Xero is another option as well as LessAccounting.com.
Keep in mind that many of these cloud-based programs let you track your entire business bookkeeping, letting you print reports at tax time, track business mileage, compose proposals/estimates for jobs and more. This means you don’t need to purchase separate accounting software for business record-keeping.
A third option is to simply download and print an invoice form and use that. This is the cheapest alternative, but does not software that tracks payments, clients, etc… If you are just starting your business or need to invoice a few clients, you can download a free sample invoice and add your company logo/stamp or label in the upper left-hand corner of the document. Microsoft Office also has some templates you can use (for Microsoft Office users).