Taking the Book out of Small Business Bookkeeping

In an ideal world, we could focus all of our energy on growing and improving our small businesses through strategic initiatives and creative thinking. But in reality, there are logistics and administrative tasks that can get in the way of focusing on what you do best. One such task is bookkeeping. With web-based apps and software packages, bookkeeping is no longer a paper-based, manual process. But with that comes a new challenge: investing in the right technology to support the changing needs of your business. Successfully tackling the burdensome but necessary process of bookkeeping means developing a solid plan and maintaining an approach that’s right for you.

To Outsource or Not to Outsource

The first accounting decision small business owners need to make is whether they want to do their bookkeeping in-house or if they want to outsource this function. There is no right or wrong answer, although some experts advise not outsourcing at the beginning; this gives you an opportunity to gain some foundational knowledge of bookkeeping practices.1

Assuming you decide to manage your bookkeeping in-house, the next decision you’ll need to make is what accounting software or online application you’ll use. Choosing the most frugal option is most likely a priority. But a common mistake is equating “frugal” with price alone.

Devil in the Details

While some accounting software might be free, it can cause disastrous revenue decline and hinder profitability if it’s not the right program for your particular needs. Mike Budiac, who runs FindAccountingSoftware.com (a website designed to help small businesses choose the right accounting packages), knows how important it is to choose the right one. An expert in this area, he has seen how “it can make the difference between businesses that are profitable versus not profitable.”

This is why it’s important to avoid making decisions based on price alone. The most frugal option might be one that’s a higher investment upfront but provides a stronger ROI over time. Keeping that in mind, there are a few overarching categories to choose from: 1) free programs 2) paid accounting packages and 3) web-based applications.

Free Bookkeeping Programs

If your business needs are simple and you don’t need much help as far as tutorials go, there are some credible programs out there that will cost you absolutely nothing to use. Some of the free programs available include:

  1. Zoho Invoice – very simple, basic invoice software meant for small businesses and freelancers
  2. Outright – accounting and bookkeeping application designed for small businesses with no need for payroll or inventory
  3. Wave Accounting – online software for help with invoicing, accounting and payroll

Top 3 Paid Small Business Accounting Packages

  1. Sage 50 (formerly Peachtree): this desktop application includes basic bookkeeping functionality and the expertise and reassurance that Sage offers as a world-leading supplier of accounting and business management software

Price: $369 (1 user)

  1. AccountEdge: available as both a desktop application and a mobile app, AccountEdge lets users manage their small business finances from pretty much anywhere. It is available in both a basic edition and a pro edition, depending on how many features are needed

Price: $99.00 (Basic Edition) / $299 (Pro Edition)

  1. Quickbooks Premier Edition: easily the most recognizable brand name in this category, Quickbooks offers advanced reporting and accounting tools tailored to your business

Price: $399.95

Top 3 Web-Based Applications

Last but not least, here’s how the top web-based applications rank (according to cio.com):

  1. Freshbooks ($19.95/month): a simple, cloud-based application that lets small businesses access their data from virtually anywhere and guides them through various accounting tasks with step-by-step wizards
  2. Quickbooks Online Simple Start ($12.95/month): performs basic accounting functions such as creating invoices, tracking sales/expenses, downloading banking transactions, etc and allows some flexibility through add-ons such as the Quickbooks “Payroll Bundle”
  3. Kashoo ($16/month): another simple accounting application that lets users access their data from multiple places (phone, iPad, web browser). There is also a free version of this available but it limits a user’s transactions to 20 per month

Work Smarter, Not Harder

Just like bookkeeping itself, selecting the right program requires attention to detail and a firm grasp on the unique needs of your business. Few people will tell you bookkeeping is fun but choosing the right accounting method will at least make it easier to work smarter and not harder.

Angie Picardo is a staff writer for NerdWallet. Her mission is to help consumers stay financially savvy, and save some money with the best bank cd rates.

1 http://hubpages.com/hub/10-Dos-And-Donts-On-Small-Business-Accounting-Practice

Game-Changers that Your Small Business Can’t Afford to Miss

Innovations to watch in the next year

Even in a challenging economy, small business ownership has never been more exciting: the technology and organizational resources available to small business owners is unmatched in history, giving them the ability to reach a global audience and compete with heavy hitters. Here are a few of the biggest innovations that will change the way your small business operates in 2013.

1. Cloud-based storage and team management

Especially if you have remote workers, you can’t afford to integrate your business via email attachment: duplicated effort, miscommunication, and scheduling conflicts are inevitable. You can seriously tighten up your operation by sharing files, schedules, and goals in the cloud.

If you’re looking for stress-free, small-scale cloud storage, Dropbox is the obvious choice, with a simple drag-and-drop interface and automatic syncing. However, if 2 GB of free storage doesn’t sound like much room to you, you might want to look elsewhere; Dropbox’s paid plans aren’t cheap. If you’re comfortable with a slightly less user-friendly interface, Google Drive is your best bet.

2. VoIP service

Internal calls can be a serious waste of money, especially if you have mobile workers or telecommuters reporting in frequently. Get all your employees signed up for Skype Mobile or a similar VoIP provider, so all your internal calls are free.

Video teleconferencing also makes it easier to hire and manage remote workers, which gives your business the freedom to hire from a much broader talent pool. One-on-one video chat is generally free, while video conferencing goes for about $5 a month.

3. Mobile payment

If you do any face-to-face business, you can’t afford to stay cash-only. Not only does accepting credit cards demonstrate professionalism and security, but it also allows you to strike while the iron is hot with your customers, instead of waiting for them to run to an ATM or dig up a checkbook.

Most mobile credit card processing services will send you a card reader and mobile app free with your merchant account, and then simply deduct their processing fee (around 2.75%) from the sale price. Giving your team the green light to accept secure payments on-site will increase your sales and reduce customer headaches.

4. Cheap tablet computers

If you do any kind of pitch for clients or prospective customers, a brief interactive Prezi on a tablet can do wonders to impress and persuade. A presentation that your customers can actually play around with and flip through themselves puts forth an air of professionalism and authority—and with less expensive tablets finally falling below $100, it’s a tool you might be able to provide for your entire team.

Tablets are also a solid medium for delivering invoices and estimates, taking inventory, or filling out requests and applications—you no longer risk misplacing loose papers, and you can post information directly to your database without a data-entry middleman.


Shawna Davies is a staff writer for Going Cellular. She has a talent for organization and helping people navigate new technology. She’s a confessed gadget freak, but when she gets out of the house, she loves spending time at the lake with her husband and young son. They live in Beaumont, Texas.