If you’re running your own business, you NEED to keep track of your revenue and expenses. I can’t tell you how frustrating it was for the first two years of running my business, hunting down transaction after transaction in a crappy bank website.
If you’re going to take the time to build a business, you need to do it the right way, from the start. Keeping track of your expenses not only makes tax-season easier; it also keeps you informed of how your business is performing. Accounting software will show you your YTD profits at any point in time. This is a great report card for your business.
What to Use?
I have done research on a couple of accounting software programs, but in the end, I decided to use a combination of Harvest and QuickBooks. The two pieces of software integrate with each other, but my needs don’t call for that integration, so it’s just a nice bonus.
The main competitor in my search for accounting software was FreshBooks. There were a couple things that QuickBooks did better that led me to ultimately choosing it. The main reason I initially chose it was that I thought since QuickBooks and TurboTax were both Intuit products, my tax information would simply be imported from QuickBooks to Turbotax.
Although that (unfortunately) isn’t the case for QuickBooks Online, it’s still great software, and it makes it very easy for me to track my business expenses (internet, phone bill, software purchases) and send my clients invoices that they can pay with a credit card online.
My choice is obviously QuickBooks, but the software you use is not as important as JUST KEEPING TRACK OF IT, period. If you think using a paper accounting journal will be easier than managing software, by all means, do it! But if you want a piece of software to do the mental heavy-lifting for you, search out the best program for your needs.
Is it Worth it to Use QuickBooks?
I have been using QuickBooks for about a year and a half now, and I absolutely love it. I can create quotes in the program, send out invoices, keep track of expenses, and generate profit and loss reports to see how my business is doing. In fact, since I’m self employed, I had to generate a PNL report to apply for the apartment we currently live in (I haven’t had a W2 since 2011). And hey, it worked!
I’ve recently upgraded from the cheapest tier (Simple Start) to the next one up (Essentials), so I could send out recurring bills for the web hosting I provide some of my clients. It’s definitely worth the extra cost to not have to remember to send out a hosting bill at the beginning of each month. It’s nice to know that the software is working for me, silently in the background.
What’s Your Favorite?
Are you a Freshbooks fan? Perhaps another software not mentioned here? Sound off in the comments below about your favorite small business accounting software.