Now that you’ve started your small business and you’re earning money, it’s time to create a reliable system to record your transactions and get yourself organized. Why bother?

  1. Keep a handle on your costs and your profit: Many small businesses don’t know their true costs and whether they are actually making money in the business, but with your accounting system, you can stay ahead of the game and in control of your finances.
  2. Flexibility and adaptations to the market: Regularly looking at your profit and loss can help you navigate a changing business environment and help you make changes as promotions and trends evolve. Did that sales promotion or one day partnership lead to a jump in sales, as you’d hoped? Is the new online ordering system yielding more profits or is it more trouble than it’s worth? How are my customers liking the new food delivery service that is saving me money? Looking at your profit and loss frequently helps you make changes in real time and keeps you current on your customers’ changing needs.
  3. Helping reduce preparation costs. We all have to pay taxes, but we don’t have to pay an arm and a leg to get our tax information organized, IF we stay organized throughout the year. Added bonus: your conversations with your accountant can be more productive if you are organized, looking at trends, and planning for the future with your numbers in hand.

So, you’re convinced, but not sure of the right accounting solution for you. Here are some of the systems currently on the market, and some guiding questions to help you determine which one is right for you:

  1. How many online transactions are you doing per year and do you use point of sale software (especially popular for food service)?
    1. Kashoo.com has a product specifically geared toward the “Truly Small” business that has less than 500 transactions per year. It is a free product at www.kashoo.com, and is scalable as your business grows. Larger companies with more transactions will pay a monthly fee.
      1. Kashoo.com can also link directly to your business bank account and automatically categorize your income and expenses to create financial statements quickly, using machine learning. You have the ability to correct/change its classifications in an easy to use display with customer service assistance through live chat with a representative. The Truly Small product can produce online invoices and receive payments, track sales tax, and categorize income and expenses according to IRS categories – for free.
      2. Kashoo.com Truly Small business plans are single entry, so do not require understanding of double entry accounting. Your accountant/bookkeeper can make adjusting entries, but they are less likely to be familiar with this software to begin.
  • Kashoo.com Classic for $30/mo can integrate with Square to document point of sale transactions as well as linking with your business bank account.
  1. Kashoo.com has a payroll module included within the $30/mo plan. Not available to the free Truly Small business plan, but it has the ability to upgrade plans as your business grows.
  1. com is a free service with true double entry accounting that the WBC offers training and support to help you get started. Wave has an online chat bot that can also answer simple questions and direct the user to blog posts and descriptions of services.
    1. Wave can prepare online invoices for all your customers and accept online payments from credit cards, apple pay, and checking accounts.
    2. A third-party app can integrate Wave with Square for point of sale systems within the free version.
  • A payroll module is available for $25/mo.
  1. Wave looks a lot like QuickBooks and allows double entry adjustments, so is easy for your accountant/bookkeeper to learn.
  1. QuickBooks is the most popular online accounting system, and it is a preferred vendor for Square, integrating easily. The free version allows downloads from business checking accounts and account reconciliations online.
    1. Most accountants are familiar with QuickBooks, as it is the standard within the accounting and bookkeeping community. This system is true double entry and allows adjusting entries.
    2. Payroll module requires a $39/mo fee on top of a monthly subscription. Not available in the free version of the app, but can range from $12 to $65/mo for the subscription version.
  2. Will you have employees and do you need to run payroll in your accounting system?
    1. All of the products outlined above have a payroll module. Note that all of the payroll modules require upgrading to the paid version of the apps, other than Wave. Also note that all of the systems allow seamless integration when upgrading to the paid version. That is, you are able to get your system up and running before paying for the monthly fee.
    2. While QuickBooks is the most expensive solution, it has been in use for the longest period, and is the most widely used system.
  3. Are you familiar with accounting and prepared to spend time learning the system?
    1. If you are not familiar with double entry accounting, the only system currently using single entry is Kashoo.com.
    2. If you are willing to learn double entry accounting, it is the industry standard, and allows for account reconciliations. The WBC can help you get started.