3 Easy Tools to Manage Small Business Finances

If you are one of the almost 18 million solopreneurs in the United States, you have to deal with managing your small business finances one way or another. This is one of the least liked, but most important aspects of running your business. After all, making money is what makes it a business, rather than a hobby. There are many variables involved in business accounting, but at the end of the day, (or month, or year), you’ll want to know:

• How much you made (a)
• How much you spent (b)
• Your profit (a) – (b)

Even if you don’t want to know, the IRS does! Keeping track of your income and expenses on a regular basis is essential in order to accurately pay your quarterly estimated income taxes. If you are just starting out and don’t have the resources to hire a bookkeeper, using a modestly priced financial management software tool or app can make accounting a lot less painful. In addition, using a separate credit card for your business expenses is critical. You are NOT your business – your personal and business expenses should be kept separate, especially as far as the IRS is concerned.

What to look for:

In choosing a financial management tool, you may want to consider the following features:

• Cloud-based (i.e. your information always backed up and available from any device)
• Logs expenses and/or income by automatically syncing with credit cards and bank accounts (so you don’t have to enter transactions manually)
• Categorizes expenses and income for tax purposes
• Tracks sales tax and estimated taxes due
• Has a mobile phone and/or tablet app
• Generates accurate reports like balance sheets, sales tax reports, A/R and A/P for yourself, your accountant or your investors.
• Can generate a Schedule C for year end taxes

My recommendations:

Following are a few of my recommended favorite tools for online accounting and small business financial management:

Freshbooks

• Provides integrated invoicing with PayPal
• Logs expenses by syncing with credit cards and bank
• Tracks project time by client and task
• Tracks sales tax due by state
• Apps available for IOS and Android
• Starts at $25 per month

GoDaddy Bookkeeping

• Automatically imports data from bank, credit cards, PayPal, eBay, Etsy and Amazon
• Tracks income and expenses and sorts by category
• Creates reports such as P&L, spending and best customers
• Creates and sends customized invoices
• Creates tax worksheets and reports including annual summary, Schedule C, sales tax and estimated taxes
• $9.99 a month

QuickBooks Online

• Basic version avalailable at $13 per month
  • Creates invoices and estimates
  • Tracks sales and expenses
  • Applies sales tax and creates reports
  • Prints checks
• Advanced versions have:
  • Payroll capabilities and can generate 1099s
  • Inventory tracking for product based businesses

Any of these, and many other online accounting and financial management tools that are currently available, will go a long way towards making managing your small business finances a quick, easy and relatively painless task!