accounting

Top 6 Fave Bookkeeping Programs

Alright, you're ready. You're ready to take your business to the next level and upgrade your systems. Maybe you're still wearing all of the hats in your business, not quite ready to hire a bookkeeper, but anxious to get a true money game plan in place.

And you think--well, I should get a bookkeeping system. All the cool kids use it.

But, YIKES. Do they really all look like something your grandmother would use? Seriously, who even uses their CD-ROM anymore? And why isn't there an app for that?

Have no fear, my dear. There are bookkeeping programs made for the modern, and creative, entrepreneur. Programs that are beautifully designed, intuitive and make the whole bookkeeping experience that much more delightful.

Check out my top 6 bookkeeping programs and why I dig them.

Please note- in order to be on this list, each program had to offer a 30-day free trial. And have an online version. So you can be the jetsetter entrepreneur that you were always meant to be. 

 

  • Xero
    • With a tagline that says "beautiful accounting software", how could you go wrong?
    • Stand-out features: Design! It's simply gorgeous. Multi-currency capability, integrates with hundreds of applications (like CRM, time tracking, inventory, etc) and they have a wealth of small business guides
    • Drawbacks: Although intuitive, if you are not working with an accountant it may be difficult to set up correctly. It has a lot of reporting capabilities, but some accountants may find it to not be as robust as other tools.
    • This is perfect if you are a business owner that has started to earn money and have different pieces to your business like inventory, time tracking or payroll. If you appreciate great design, Xero is really easy on the eyes.
  • Wave
    • The only accounting option that is completely free! The only thing you pay for is payroll, but if you're just starting your business you probably don't need to worry about this.
    • Stand-out features: I repeat, it's free. Beautiful and simple invoicing features where your clients can pay you immediately on their phone. Personal finance feature with budgeting. Also, if you co-mingle your business and personal transactions it's really easy to separate. 
    • Drawbacks: The reporting can be a little tricky to understand because they use accrual and not cash basis reporting (it's a silly accounting thing). Basically, if you send an invoice in October, but don't get paid until November, your reports will show that income was earned in October. Technically, this is the proper accounting (read: according to accountants), but isn't helpful when you are keeping a close eye on your bank account. Your accountant will know how to deal to with this, but if you aren't ready to hire one this can be confusing.
    • This is perfect if you are a business owner that has been in business for under 3 years or are a strictly service based business. If you find it hard to separate your business and personal expenses, this is the best product for you.
  • Freshbooks 
    • They totally believe that billing a client should be painless. I happen to agree. And you should too.
    • Stand-out features: One of the best invoicing options and seamless integration with capturing receipts and tracking time. Super straight forward tool that cuts through the unnecessary accounting hoopla.
    • Drawbacks: By cutting out the accounting hoopla, accountants may not be able to run comprehensive reports. Depending on your business, this may be ok or your accountant can export your file to Quickbooks.
    • This is perfect if you are a business owner who sends a lot invoices and needs to track your time and expenses. If you are a consultant or coach, this is a fabulous choice.
  • Quickbooks Online
    • Everyone and their grandma has heard of Quickbooks. They are one of the most established companies in the world and the first to move accounting from awful paper ledgers. Thank you, Intuit.
    • Stand out features: Extremely customizable reports and the most robust accounting capability for small business owners. Also, every accountant knows how to use Quickbooks and will be comfortable working with your file once you're ready to hire her. If they don't know how to use Quickbooks Online or the Desktop version, I would give them the side-eye.
    • Drawbacks: While they are actively building their online application to keep up with competition, there still spend a lot of time and money to promote their desktop version. (Quickbooks, I love you. But, please stop this.) While I've always had a pleasant experience with their customer service, sometimes the reps are not as knowledgeable on the online version. And unfortunately, modern business owners still view them as a tool for their grandma.
    • This is perfect if you are business owner with lots of varying accounting transactions and want to use something that's tried and true. If you think your business is going to grow to include a lot of different pieces, and you want to make sure your accountant knows how to use it, QBO is a great choice.
  • Kashoo
    • One of the most innovative teams I have ever met in an any industry. Let alone the accounting industry. 
    • Stand-out features: You can create different projects within the system and track their related expenses. You can complete bookkeeping tasks off-line (super rad!) and if you happen to mess up the setup of your bookkeeping system- no worries! When you do find an accountant to work with, Kashoo has made it super easy for them to fix. And it's optimized to work on your iPad---probably why they are the top downloaded accounting application on the iPad.They also have weekly Thursday webinars where they share tips on how to grow your business. 
    • Drawbacks: It doesn't support inventory or integrate with POS systems.
    • This is perfect if you are a service based business owner that considers your work to be primarily project based. If you are an iPad lover, travel often or your accountant still uses Quickbooks Desktop (they have created a seamless integration), Kashoo is awesome.
  • Sage
    • This product will grow with your business and has the capability of handling corporate-level or enterprise functions.
    • Stand-out features: You can create different projects within Sage and if you scale your business, it will grow with you. With a monthly price that starts at $9 per month and extensive reporting capabilities/accounting functionality, it is a great tool. On a branding note, Sage is super supportive of lady entrepreneurs. Loooooove this!
    • Drawbacks: Without an accounting background, it may be a little intimidating. And as you begin to scale, Sage has some pretty heavy competition with products that provide enterprise functionality.
    • This is perfect if you are a business owner that deals with inventory in various locations and want an all-inclusive product.

Do you use any of these programs?  Leave a comment and tell me about it.

Danetha Doe is the author of a Simple Guide to Accounting and Financial Strategy for New Entrepreneurs. She is the founder of Danetha Doe Consulting, a business development agency based in San Francisco. Connect with her on Twitter, @danethadoe.

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The first thing you need to do to have a successful business

Heyyy rockstar entrepreneur. So, let's chat a little about your accounting today, shall we? I can already hear you falling asleep, so I'll keep this short. But, I really want to take a little bit of time to share why paying attention to your monies is important. I mean if you want to be rich and famous, you're going to have to keep an eye on your money. Right?

Got a question about accounting?  Ask me here  and you may be featured on my daily podcast, Money and Mimosas™. 

Got a question about accounting? Ask me here and you may be featured on my daily podcast, Money and Mimosas™. 

One of the questions I hear often from sparkly new business owners, is whether or not they need to use an accounting (please not I use accounting and bookkeeping interchangeably in this post) program. Usually when we first start a business, funds are tight and we can't afford to hire professionals like accountants.

So the question becomes should you use an accounting program before you hire an accountant or should you wait?

My rule of thumb is the moment you spend your first dollar on your business, you should start using a program to track your expenses and the money you will start bringing in.

If you recently launched a business and plan on making this a way to support your lifestyle, setting up a bookkeeping program helps you establish a frame of mind that says "this for real" and the cash you earn is to be taken seriously. Otherwise, you run the risk of maintaining a "this is just a hobby" mode which will affect the way you present your service or product to others.

And ultimately how much money you make and can spend on new Tieks shoes. (if you haven't heard of Tieks, they are seriously the best shoes EVER).

In addition to mindset, there are three "practical" reasons to use an accounting program.

  1. To secure financing- If you are looking to get a loan or get funding from an investor, they will want to see comprehensive financial reports that are as accurate as possible. A bookkeeping program allows you to run these programs easily and shows that you are "serious" about your business.
  2. End of year tax filing- At some point you're going to want to hire a professional . The more difficult it is for them to gather the data from different sources like Excel to bank statements to Etsy accounts- the more time it will take them and the more money it will cost you to work with them.
  3. Creating a financial plan- a bookkeeping program keeps all of your information in one place so you can figure out ways to grow your business and create an actual financial plan. Especially when you're ready to expand and offer a new service/product this information is especially helpful.

I want to hear from you! Do you use an accounting program for your business? If so, which one? If not, when do you plan on setting one up? Leave a comment below and let me know.

Danetha Doe is a product launch strategist and total geek about cloud accounting. Her consulting practice helps companies develop a comprehensive financial plan for rolling out new products and services. She has worked with brands such as Google and Neutrogena.

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Stay glamorous,

Danetha


Why you're doing your accounting wrong

Money and Mimosas™, my weekly bookkeeping date, is now a daily podcast covering everything you need to know about accounting! Sign up for my newsletter (in the Tiffany blue box above) to be the first to hear about its official launch on iTunes and Stitcher.

Money and Mimosas™, my weekly bookkeeping date, is now a daily podcast covering everything you need to know about accounting! Sign up for my newsletter (in the Tiffany blue box above) to be the first to hear about its official launch on iTunes and Stitcher.

Oh, the wonderful world of accounting. Numbers and reports for days on end. While this sounds like a chocolate covered dream to me, if you're like most small business owners accounting doesn't exactly light you up inside.

Sure, we all know that it's important but why? What exactly is accounting? And are you doing it wrong? There are a lot of applications out there that do a good job of adding up different financial numbers within a business, but are they really doing the accounting work for you?

Many small business owners fall into the trap of thinking that accounting is only good for filing taxes. But, there are bajillion other reasons why you need accounting to make sure you stay in business and continue to grow your profits. 

For more reasons why accounting is good for business, other than just filing taxes ,be sure to read my post, " What your CPA isn't telling you."

So what exactly is accounting and what should you look for in the software you use? Rob Maurin, VP of Brand Engagement at Wave did a fabulous write-up explaining what double entry accounting means and why you need it for your business. Wave is an absolutely fabulous cloud accounting tool (I use them for my business and adore them!). Their support staff is top-notch and always willing to help with any tech and/or accounting related issues. Read below about their take on the importance of accounting for all businesses.

Danetha Doe is a business strategist and cloud accounting expert. Her consulting firm helps businesses launch new apps, services and products with ease and has worked with companies like Google and Audi. Contact her directly at danetha(at)danethadoe(dot)com.

Original Post is by Rob Maurin, VP of Brand Engagement at Wave-click the link to read

If you look at online reviews lately, the term "accounting software" gets applied to anything capable of adding two numbers together. So expense trackers, invoicing applications and other lightweight software in the cloud get lumped in with real, double entry accounting applications like Wave. It drives me nuts.

But is that bad?

Actually, yes, it is. And not just because I like promoting Wave. When small business owners use a "lite" software tool to do their accounting, it can cost them money and hurt their business.

If you're running a business, you need to use a double entry accounting system. (What's double entry and how do you recognize it? See the end of this post.) The good news is that you don't even need to know what double entry is! The double entry work happens behind the scenes, and sets you up for better success, with more money in your pocket, without requiring any special work from you.

But don't take my word for it. I asked some independent small business accountants for their perspective on whether double entry accounting matters. Here are some of the reasons they gave:

Reason 1: Double entry accounting will minimize your income tax.

Deductions and proper reporting can make a huge difference to any business. “It matters for every small business, even little ones that sell things on Etsy,” says William Lopez, Partner at TropezCPA and Founder of AdvisorFi in West Palm Beach, Florida. “I tell them, ‘You use a computer to log onto Etsy? OK, that’s a fixed asset we need to depreciate to save you money'."

"For bigger businesses, I tell them about a client whose tax bill I chopped from $150,000 to $30,000 just by flipping the accounting method and utilizing the double entry side of things. Without double entry, I can’t do that.”

Reason 2: You have a business loan. Or you might want one some day.

"Without real double entry accounting, you might not be able to get a loan in the first place,” says Anna Abbruzzese, president of Actium Consulting Inc. in Toronto, Ontario. “Lenders want to see a balance sheet,” and you can only get a balance sheet with double entry.

Think of the stuff you need in order to get a personal loan or mortgage: The bank wants to know your assets like cars, property, investments and so on. Same goes for your business loan. A balance sheet will provide the right info. An expense tracker or income/invoice tool will not.

Once you have the loan, you need to track it properly, too, and you can't do that without double entry. “Invoicing applications might track your income and expenses. However, a loan isn't income,” says Maggie Geiser, an accounting and bookkeeping advisor in Vancouver, British Columbia. “The interest that you pay on that loan is an expense, but the principal you pay is not. How do you track that without proper double entry?”

Reason 3: You want to be awesome.

“Research shows those who use full double entry accounting are more confident and have a better understanding of what they need and what they can do to make their business more of a success,” says Abbruzzese.

Reason 4: You want your business to grow.

“If you think your business is going to grow at all, and you want to develop good business habits,” Geiser says, “double entry is absolutely the way to go because it will discipline you and get you looking at the reports you ought to be looking at.”

Reason 5: Business decisions matter to you.

“You can’t make accurate decisions without having a complete financial picture,” says Andrew Wall, CPA, CMA, a partner at Wall & Associates in Toronto. “And without double entry accounting and without a balance sheet, you don’t know the financial position of the company.”

Lopez adds, “Within the balance sheet I derive a lot of intelligence, like: How efficient is your company? Are you even aware that it takes you 40 days to get paid from an invoice?” 

“Especially with small businesses where things are changing — and changing rapidly — people need to be able to make informed decisions quickly and accurately,” Wall concludes.

 

There's more, of course. Anna Abbruzzese told me, "We would never work with a single entry accounting system. Ever.” But ask your own accountant and form your own opinions. 

 

When is it OK to not use double entry?

There used to be 3 good reasons to avoid old-school double entry accounting software:

  1. It was too hard to use.
  2. It was too expensive.
  3. It took too much time.

That's no longer the case, especially with Wave. So today, in the same time and with the same effort it would take you to do it wrong with "lite" software, you can do it right with a double entry accounting system in the cloud.

"Lite" software may have its purpose — some of it is pretty great at its intended purpose, like invoicing or expense tracking. But don't confuse it with accounting, or you could wind up paying for it, now and down the road.  

 

How do I know if my software is real accounting or "lite" accounting?

Here's what you need to look for, or ask for:

  • Simply asking if something is double entry is usually enough. A real double entry application will tell you that's how they crunch your numbers. 
  • If the software doesn't give you a Balance Sheet, or only has a work-around solution to get you close to a Balance Sheet, then it's not real double entry. A Balance Sheet is a critical report that any accountant will need to save you money. And as you get more experienced, you'll be able to learn from it, too.
  • A proper accounting application allows you to create Journal Entries or Journal Transactions. This is the old-school way of entering info into an accounting application, and it illustrates what double entry means. In each Journal Transaction there are two offsetting entries. It allows you to track where money came from and where it went, and a whole lot more. If your software doesn't allow you to use Journal Entries/Transactions, it's not real accounting.

If the software you're considering covers these 3 bases, you're probably looking at a real, double entry accounting application. Of course, Wave offers all these features and then some.

As I mention above, the great news is that you don't actually need to know what's happening under the hood of a double entry system. What's important is that it is a double entry system, and that those powerful tools and reports are available for you and/or your accountant when you need them.

So next time you see someone say "accounting software" when what they mean is "expense tracking" or "invoicing tool," please join me in sending them the graphic at the top of this post! You can get it any time from http://bit.ly/REALaccounting .

Danetha Doe is a business strategist and cloud accounting expert. Her consulting firm helps businesses launch new apps, services and products with ease and has worked with companies like Google and Audi. Contact her directly at danetha(at)danethadoe(dot)com.

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