If you read this blog regularly you might be aware that I’ve been preparing myself (and my finances) for the possibility of a job change early next year, once I’ve paid off our mortgage. That plan is not 100% certain yet, but I’ve begun working part time on a couple of side hustles in order to lay the groundwork, should the chips fall that way.
Anyway, after using my favorite personal finance tracking software YNAB to track my business income for the first half of the year, I decided it was time for an upgrade. I would like to keep track of my business income and expenses in such a way that it’s not a chore to figure out how to budget next year for my business. While YNAB can do that very easily, it requires keeping a second budget in the same software, which wasn’t ideal for me.
I’d also like to learn best practices for small business accounting so that I’m not struggling to learn that next year, when I’m trying to, you know, make money and stuff. 🙂
My List Of Requirements As A Small Business Owner
- Cloud based – I work in the IT industry and want full-time access to my data, from a laptop, Android phone, and from my Microsoft Surface tablet. I also don’t want to have to upgrade every year for the latest features.
- Easy to use – I’m no business accounting guru, and I’ve helped enough people with QuickBooks issues to understand how complex a full-on accounting solution can be. I also watched a few videos on setting up a small business in QuickBooks and decided it was just going to be too complex for my simple needs.
- Inexpensive – Accounting packages that run on the desktop can range from $250-$500, and I’m not looking to drop that kind of cash into something that will only be handling 10-15 transactions a month for now. $20/month is the upper end of what I’d be willing to fork over!
- Good electronic invoicing – Coming from the world of IT, I think paper invoicing is the worst! I want to be able to seamlessly collect payments via PayPal as well as easily send out email invoices directly from the accounting software.
- Connection to my bank – I don’t want to be manually entering or importing my transactions all the time, I’ve got better things to do. Like running a business!
WOW, are there a lot of options when it comes to cloud-based accounting software for small business! You can find “top 10” reviews on these things until your eyes bleed. Each solution is a little bit different in how it operates; finding the right one really takes trying them out for yourself. The solutions listed below are near the top of every one of those review lists, but I figured some “hands-on” experience might help if any of you are investigating them for yourself. Also, almost all of them have free trials, which is awesome.
Here are the services I ended up trying out:
FreshBooks – $20/month
Right off the bat, let me tell you the FreshBooks is freaking AWESOME. I absolutely love the simplicity and flexibility of their software. Everything seems well laid-out, thought-out, and geared for new users. It didn’t take me long to get some recurring invoices set up for my current customers and connect to my bank to import transactions. The feel of FreshBooks is closer to a personal finance software like Mint.com, but with all the options you need for running a small business.
However, one surprise I found out was that for the free account you can only have ONE client in the system. All the reviews I’d read showed that you could have up to 3 clients on the free account, and I only had 2 at the time. Once the 30-day free trial was over though, my account was disabled, which was disappointing. If I were up and running at full speed already I might have sprung for the full package, but I’m not quite there yet. If YOU are I’d highly recommend checking FreshBooks out. To me they are the front-runner in the online accounting space.
Kashoo – $50/year single-user, $199/year multi-user
It does seem to have a lot of flexibility, but I had a difficult time figuring out how to get it set up for my business needs. It would have been a good, inexpensive choice for only $50/year, but it was a little too accountant-oriented for this small business owner’s tastes.
Wave Accounting – Free (ad supported)
My first thought was “Free? Hey I can deal with a few ads for free”. Unfortunately, after spending a few days playing around with the Wave user interface, I realized that it wasn’t for me. The ads were more intrusive than I thought they’d be, almost like a Spotify where they are large and flashy, instead of a Facebook or Google. Also, it had some “a la carte” upgrade options that were not free, so it was hard to tell how deep the “free” rabbit hole went before requiring real money.
QuickBooks Online Essentials – $10/month
At first I wasn’t too thrilled about the possibility of using the online version of QuickBooks. I mean, I’ve used Quicken before, as well as Mint.com, and like I said above I wasn’t thrilled with the idea of using the local version of QuickBooks due to my limited accounting experience.
But after seeing a promotion earlier this month where they were offering their Essentials package for 30% off for 6 months, I did some further reading, and decided to give it a try. So far, I’m very impressed! From the new business setup wizard to the Android App, the easy electronic invoicing to the quick connection to my bank, everything has been very easy to get going with.
It’s got a simple chart of accounts area I can totally customize and a lot of “Tooltips” that help new users (like me) with getting started. Best of all for me was the lower price and the industry standard data that QuickBooks offers. If I decide to go elsewhere when my business grows, I have that option.
Another nice feature I didn’t think about beforehand (but one that QuickBooks Online provides for free) is access for your CPA to be able to view your accounts. All you have to do is send an email invitation and your CPA is in! I’m doing some work for a friend who is a CPA, so that may come in handy later this year after I really get things going. This feature isn’t that impressive for someone using QuickBooks desktop software, but I could envision some of the other online offerings being confusing to CPAs who don’t have any experience with them.
So there you go, some “ground level” experience you might be able to draw from. Again, I’m not an accounting expert so there may be some limitations or features here that I’ve not run across yet, but I have a feeling that my perspective is probably typical for a lot of new or prospective small business owners.
If money were no object, I’d jump to FreshBooks in a heartbeat. However, I could just as easily jump to Excel and track things that way. I do want to start my small business properly and track things the way they should be, as well as look modern and professional to my customers, so I decided to go ahead and get going with a “real” accounting solution. In QuickBooks Online I think I’ve found just that!
Please let me know if you have any specific questions I can try to answer — I’m happy to do so!