BlogBookkeeping tips to help you build a solid financial foundation for your business. |
One of the best ways to streamline your invoicing process is to setup your Products and Services list in QuickBooks Online. Here's how:
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There are so many accounting software options for small business owners it can be overwhelming. Your hands are starting to sweat and your brain is spinning just thinking about it. I completely understand and want to help you make a more informed decision by using these questions: Do you want to pay a small monthly fee or a larger one time cost? Cloud-based systems charge a monthly fee, while desktop-based systems are a large upfront cost. However, cloud-based provide automatic updates, while most desktop options will charge for that. Bottom Line: Monthly fee or one-time cost? Do you prefer a cloud-based system with access available from literally anywhere or desktop software? If you plan to hire an accountant or bookkeeper in the future it may be best to go with a cloud-based system. This will enable them to access your books remotely, saving you the hassle of dropping off your records at their office (or the cost of them coming to you). Plus, you get to choose a bookkeeper you connect with not a random person who happens to live nearby. Bottom Line: Cloud-based or desktop? Are you looking for a basic accounting software or one that is more expensive but has additional features? The more bells and whistles you need, the more expense will be added. Bottom Line: Basic or Complex? How many people do you need to have access to it? The more users (employee, accountant, bookkeeper), the more expense. Bottom Line: Number of users needed? What financial reports do you need it to provide? Some accounting software options do not offer a full range of financial reports. At the very least you need a profit and loss (income) statement and balance sheet. Without these reports your software will be useless. Bottom Line: Be sure the software will supply you the reports you need. Do you need to track inventory? If your business is product-based, you may also need an inventory tracker and purchase order assistance. Bottom Line: Inventory tracking or no? Now you probably thinking, "Just tell me exactly which software should I choose! I still don't know which one!!!" Well, I love and use QuickBooks Online. The Simple Start plan has the features most small businesses need and allows you to upgrade when your business grows. *This post contains affiliate links, but I only promote products I actually use and love.
Tracking business expenses is important because they ultimately become tax deductions which means saving money (and who doesn't want to save money!). But where's an entrepreneur to start? Here is a quick overview to get you on the right track.
Advertising. Includes any materials you use for marketing (e.g. bridal guide magazines, Facebook ads, and email services like Flodesk or Mail Chimp. Unbranded gifts, such as books, are not considered advertising (they are considered "other expenses" though!). Contract Labor. Payments you make to independent contractors (e.g. freelancers you hired for additional project support: virtual assistant, second shooter, intern...). This is NOT the same as wages which are paid to employees which are deductible on the "Wages" line of Schedule C. Independent contractors are people you have "the right to control or direct only the result of the work," not when and how will be done (IRS.gov). Insurance. More specifically, business insurance such as general liability insurance or equipment insurance. Legal & Professional Fees. Accountants, tax preparers, lawyers, bookkeepers... Yes, the fees to have someone take care of your bookkeeping is deductible on your taxes! That's a win-win! Supplies. This includes any supplies that are used in your business: pens, printer ink, paper clips... any supply you use and replace in your business. Website designers may also deduct digital supplies such as stock photography or website plugins. Other Expenses. Continuing education, bank or credit card fees, membership dues, client gifts, industry subscriptions, etc. The IRS says anything that is "ordinary and necessary" for running your business is deductible. So, graphic designers, you cannot deduct chocolate while chocolatiers may... Want a handy little reference sheet so you can remember these categories and others? I thought so. Click the photo below and sign up to receive your free cheat sheet. |