You can't have an accounting solution if you haven't identified your accounting problems. The problems encountered will vary by region, number of employees, type sales/services offered, volume of sales/services, and billing structure, among other things. But, in general:
All businesses need to keep track of income and expenses for purposes of:
- Keeping track of expenses and deductibles for tax purposes
- Not overspending, over-paying employees, or over-drawing income
- Identifying and maximizing profits
Further problems you might want solved by your accounting program:
- Online banking integration
- Import and analyze cash flow and account information from your bank account(s)
- E-commerce integration
- Import sales and expenses from eBay, Amazon, Etsy, etc.
- Service estimates
- Overdue payment follow-up with customers
- Automatically track payments, and notify overdue customers automatically by email
- Direct deposit for employees
- Credit card services
- Accept credit card payments
In an ideal situation, small business accounting starts before a single sale is made. Before you do anything else, make sure your business makes sense by completing a cash projection.
- Look at this sample cash flow and input your business' information to create your own.
Working with a spreadsheet program and your bank statements, it's possible to take care of your accounting needs. Just like that, you've taken care of basic accounting needs for free.
But, building your own spreadsheet may require a great time investment and expertise that you might not have. Thankfully, there are various programs and online services that simplify business accounting. Here are a few services that we think are worth a small business' consideration:
A note: don't skimp on accounting services. Time spent on accounting is time you could spend on repair. With that in mind, it might make sense to buy accounting software or pay a monthly service fee to use cloud-based accounting services.
FreshBooks is built around its invoicing features. You will spend more time on billing than any other accounting issue, so building an accounting solution around billing clients is ideal. If you do not have an accounting solution and are willing to pay a reasonable rate, start with FreshBooks.
Aside from the invoicing features, FreshBooks has features to receive credit/debit payment, connect to your bank, integrate online payment gateways (PayPal, Dwolla, Stripe, Authorize.Net, and others) track expenses, and view bookkeeping reports like profit/loss and cashflow.
- FreshBooks' invoice features are very, very cool.
- Integration of banking, credit/debit, and accounting services.
- Free 30-day trial.
- Must be online to use.
QuickBooks provides a range of products and services that work online and/or offline. These products can be more expensive and take a greater time investment to learn than many other entry-level programs, but also provide more comprehensive business tools. Online-only options are inexpensive and the interface is simplified.
- Works online and offline, depending on the service you choose.
- Has a solution for every accounting problem a small business may have: invoicing, sales estimates, business tax support, sales tax accounting, payroll support, online payment options, check printing, and cashflow reports.
- Large user base with excellent support.
- Free trial account for QuickBooks Online.
- Online interface isn't as streamlined as simpler programs.
- Offline software is more expensive than other entry-level accounting solutions.