Updated: Oct 15, 2019
Tracking your business so you can understand the profit, costs, how much tax to pay and so on is a necessary part of any business. There is no doubt that you can start a business with some pretty basic tools to track income and expenses such as Excel. In the end you will probably want something a little more robust than this.
What you are looking for is a system that allows you (at a minimum) to:
Track and categorize (e.g. consulting, reimbursement) income
Track and categorize (e.g. marketing, travel, etc.) expenses
Download data from your business bank account so you don’t have to enter all the data manually
Generate and track invoices
General accounting reports such as a General Ledger so you can complete taxation filings
There are two basic tools you should look into:
The cheap Quickbooks: The granddaddy in small business accounting tools is Quickbooks. The only real downside of this tool is the fact that it costs to use, say about $10 a month for a one person business.
The free WaveApps: If you are worried about spending money WaveApps offers similar capabilities for free. FiveWhyz folks also use this
FiveWhyz folks use either of these tools to good effect. If your accountant has a favorite tool, then the best bet is to go with that tool.
By Way of Context ...
You are looking at a part of a series of blog posts. The series looks like:
And remember, I am not an accountant. I am not a lawyer. You will want to get help from these experts and should defer to their opinion in the event that what you read on this page differs from their opinion.