There are so many things to keep track of in your business, financially speaking. When you’re first starting your business (and, frankly, for years after) you may find yourself overwhelmed. The best thing you can do is implement a few financial tools from the beginning (or as soon as you can) and you’ll set yourself up for success for years to come.
Top Tools for Saving Receipts
I’ve talked about whether you should keep physical receipts before, but let’s talk about the practicalities of keeping them – and not keeping them. If you choose to keep physical receipts, make sure you keep them well organized. Ideally by month, but at least by quarter (and very least by year!). But the best option these days is to digitize them. There are many options, but one of the easiest is an app like Evernote. It’s free (up to a certain point) and easy to use. Just take a photo of the receipt and make any additional notes you need to, like who you ate dinner with and why. There are plenty of other options like Dropbox or even within your accounting software. Whatever you use, be consistent.
Top Tools for Tracking Mileage
You know you should track your mileage (it’s one of the secrets to minimizing your self-employment tax, remember?) but you tend to forget to write everything down. That’s ok- using a paper and pen just isn’t working for you. It’s time to implement a tool to help. Apps like Mileage Expense Log, MileIQ, and TripLog are fantastic options. They typically have a monthly fee associated with them, but it’s minimal (less than $10 a month though most are less than $5). If you’re driving more than one trip a month, they will more than pay for themselves over time by keeping accurate records for you.
Top Invoicing Software
There are dozens of invoicing apps available and most of them are able to handle most small business owner’s invoicing needs. There are free ones available, like Due and Zoho, but the free platforms tend to limit things like the number of customers or transactions. If you’re willing to pay for software like Freshbooks or Harvest, you have more options for add-ons and customization. Keep in mind that whatever software you choose, if you want clients to pay online you will be subject to transaction fees. (And no, you can’t directly charge your client for those fees! But you can deduct them as a cost of doing business.)
Top Accounting Software
Accounting software and invoicing software can often be confused. Some invoicing software has some basic bookkeeping abilities, but most businesses also need a true accounting software to be able to grow their businesses. My ultimate choice is Quickbooks Online – it does everything you need including emailing and tracking invoices, receiving and processing payments, capturing receipts, storing documents, and, of course, actually keeping up with your books. Other options include Xero, Wave, and ZipBooks. Keep in mind that you will be paying for a quality accounting software but it will be more than worth it.
There’s really only one option here – you should be using EFTPS to pay all your federal taxes. EFTPS is the system to make secure and convenient payments. Plus you can schedule payments up to a year in advance, so you don’t have to worry about missing a tax payment ever again. If you’re not too sure about EFTPS, talk to your accountant – she probably uses it already.
Once you have your financial tools in place, you’re ready to think about the next steps in your business. In the coming months, we’ll cover things like hiring subcontractors, the importance of hiring a bookkeeper, tips for billing, and what to include in your New Client Welcome Kit. Of course, if you want a partner to help you get started on the right foot, contact me through our online form.
Deb Howard Greenleaf, EA, CEO and Principal, of Greenleaf Accounting Services provides virtual accounting and bookkeeping services and specializes in financial management to consultants, coaches, solo professionals, and other small business owners across the US. Deb is an Enrolled Agent (EA)—an IRS-licensed tax professional—and specializes in small businesses and entrepreneurs filing Schedule C or as an LLC. As an Advanced Certified QuickBooks ProAdvisor, Deb spends her day in QuickBooks Online and specializes in providing QBO support.