Seting up an accounting system now, makes life much easier than tracking down your expenses at tax time etc. Pouring through old receipts and bank statements for 3 days makes taxes unbearable and may hinder an opportunity for funding.
It’s similar to creating the budget, and actually you can use the same software.
You need an accounting system for:
- Tracking expenses
- Monitoring spending
- Watching revenues come in
- Making financially smart decisions
Your accounting system is the tool that makes the budget possible. The accounting system also lets you do one more important thing
- Prepare and pay your taxes!
So there is really no way to avoid an accounting system, unless you plan on putting all of your receipts into a shoe box and handing them over to an accountant at year end.
Having an accountant is one viable solution to your accounting needs. But I promise, they do not like shoe boxes and they are expensive.
Your best and most affordable option is to set up your own accounting system using one of the many, many accounting software packages that are available. In our discussion on business software we talked about the basics for what you need to do your accounting,
There are literally hundreds of different accounting software packages that you could use. A great accounting package is a must have. It will track your expenses and revenues, calculate profits (which hopefully you will have a lot of) and even get your tax information ready for you.
Inuit and Freshbooks offer a number of different accounting software packages. You can purchase simple software for the individual and really small business all the way to complex packages for businesses large and small.
Freshbooks is a great alternative accounting software for small business owners. It’s easy to use, and doesn’t require much accounting skills. It allows you to track your time, easily create invoices, record your expenses from banks and credit cards, tie in credit card processing. In fact, you can even create a credit card payment button right on an invoice.
QuickBooks can be had for as little as $12.95 for the really small business with very basic needs. Inuit offers accounting solutions for small businesses that have more accounting needs and for medium sizes businesses too. These run up to $1,000 in price.
*Note, the online version is only available while you are paying, if you cancel your subscription, you lose your files…so the Desktop version may make more sense if you can afford the $199 for the desktop version
If you are an accountant or entrepreneur, QuickBooks has a software package designed just for you.
Setting up Quickbooks
It’s critical to set your books up right, you don’t want to lose money with simple mistakes. When you purchase Quickbooks, you get unlimited phone support. There is also a network of consultants you can use to help with the setup.
Public companies have very strict accounting standards that they must comply with. If your company is public, you no doubt are aware of these standards and are already work with an accountant.
Accounting standards are much less rigorous for private companies. In fact, as long as you pay your quarterly taxes and file your taxes once a year, there are no accounting standards beyond what the Internal Revenue Service requires to justify what you filed.