Written by: Jennie Stowe, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise
“You mean all my bookkeeping up until this point hasn’t actually been proper bookkeeping?” All too often, the answer I have to give prospective clients is an honest, “No.” Without a doubt, there are many bookkeeping software options available for a small business owner. So, how do you know which one you should actually use?
The startup business may appreciate the free and cheap software options (Wave, Freshbooks, Zipbooks, etc.). That's okay. We've all been there, and saving money is important at the beginning! These options can sometimes be sufficient to get you started, but they're nearly always missing important aspects of proper bookkeeping. You have to recognize that higher quality comes with a correspondingly higher price tag. This means many of the free/cheap software options are generally lacking the features of their high-end cousins. In planning your business's future, be prepared to upgrade as soon as you can afford the monthly subscription of quality software.
Are you using a CRM (Client Relationship Management) software to cover all your business needs? HoneyBooks, Zoho, My Music Staff, etc. can track invoices and sometimes even track your expenses, but that’s not enough to qualify as “bookkeeping.” These CRM’s won’t allow you to customize your chart of accounts or reconcile your bank accounts; both of which are essential to real bookkeeping. Yes, your CRM does keep some records, but it’s not enough!
So now to the real question: What counts as quality bookkeeping software? Most accounting professionals agree that Xero and QuickBooks Online are the best options currently available in the US. With the proper knowledge, you can use these tools to keep your own books or outsource to a professional who will be able to customize your books to suit your business.
Of the two, QuickBooks Online is my personal favorite. It’s customizable, easy to use, and covers all your bookkeeping bases. It can be used to manage receipts and - if you set up QuickBooks Payments - clients can pay their invoices online or set up recurring direct deposits. Setting aside all the technical info, the best part is that all these records automatically sync within your books to keep your bookkeeping simple!
In summary, if you’re a new business owner trying to minimize expenses, go ahead and use free or cheap bookkeeping software to get started - it’s better than nothing! But, once your business is running profitably, consider upgrading to Xero or QuickBooks Online. Whether you plan to keep your books yourself or hire a professional bookkeeper, understanding your business's financial health is vital. Don’t underestimate the necessity of solid bookkeeping!
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Jennie Stowe, Executive Contributor Brainz Magazine
Jennie Stowe lives in Tennessee with her husband and son. She is a Certified Bookkeeper and QuickBooks ProAdviser who helps female service providers with their bookkeeping so they can focus their time on booking more clients and making more money. Solid bookkeeping is vital for a business's success, so Jennie offers resources for every budget! Those small businesses that can't yet afford a bookkeeper are covered by her online course: Keep Your Own Books - The Entrepreneur's Guide to Small Business Accounting.