How to best keep your books yourself.

For most folks just starting out, we do not recommend setting up professional accounting software if you’re not ready to hire out your bookkeeping. There are a lot of options instead of hiring a bookkeeper, that won’t lead to messy finances or tax season angst.

And even if you’re further along in your business journey, tiny solo service businesses often don’t have the revenue or the need for professional bookkeeping services.

If you’re not hiring a professional bookkeeper, then you may find yourself doing one of two things:

• Avoiding your financials entirely, until around tax time when over an intense three days you dive into confusing bank statements, panicking, to get your accountant everything they need.
• Sign up for complex accounting software like Quickbooks or Xero, attempt to do it yourself; get completely confused and flustered, abandon this software, while still paying for the subscription.

More than avoiding financials entirely, the biggest mistake I see if from folks starting out is setting up Quickbooks or Xero before they’re ready to hire a professional.

Here’s why:

• These platforms need to be customized to your business. The out of the box Chart of Accounts does not work for anyone!
• Because these platforms facilitate complex accounting principals, it’s easy to get overwhelmed and give up. You probably will make mistakes, which compounded over time, can be very challenging to untangle.
• While it might seem like a matter of learning software, to do your own books you’ll need to learn accounting principles at the same time.

What to do instead of setting up Quickbooks:

First, keep your transactions organized and clear. Open a business bank account and, if you need it, a business credit card.

Be rigorous in keeping personal and business finances separate. You want to be confident that only

If you need to use something like Venmo, again, separate your accounts.

Then, pick the best fit for tracking:

If you want something that will sync to your accounts, and you don’t care about sending invoices from the same place:
You Need a Budget.

Yes, the personal budgeting app can be used for your business. As a zero-based budgeting tool, if you set it up well, the app will help you manage cash flow by letting you know when you’ve overspent.

If you have minimal monthly transactions and are good at keeping up with routine tasks:
A really nice spreadsheet will do the trick.

The advantage of a spreadsheet is that you can also plan the future — projections— at the same time as you track your past income and expenses.

Here’s a simple Google Sheet version that offers options for cash flow management (for sticky times!) as well as a simple month-by-month budget.

If you need to integrate invoicing
Use Quickbooks Self-Employed

Quickbooks Self-Employed or Solopreneur is a distinct product geared towards folks with simple service businesses or freelance-style practices. Unlike the full accounting software, it’s easier to learn and manage, and can be a good choice for folks that want to manage their record keeping but don’t need full accounting or have complex financials.

You can upgrade to the full accounting software from Soloprenuer without losing your data. There are other apps like Wave or Freshbooks that solopreneurs often land on first, these can work too! However it’s worth considering whether you might switch to full software in the future; if you think you might, go with a platforms that will more easily support your business growth.

About Wanderwell Bookkeeping?

We are a remote bookkeeping agency that works with creative small businesses. We’re a great fit for folks looking for strategically-minded, ace problem solvers to partner with in thoughtful finance.

Learn more about our bookkeeping services or get in touch!

* Some of recommendation links are referral links; we may earn a commission if you choose to use these tools.