Accounting for small business/freelance

All,


I'm in the process of starting up a tiny company. This will be like freelance video -- I can do anything but weddings. No weddings! Too high stakes, and I'd take an angry CEO over an angry bride any day.

Now, I'm wondering what I need to do, to get the accounting started off on the right foot from day 1. I have GNUCash installed, and I was going to use that...but I've used FreshBooks in the past and really love it.

FreshBooks will let me manage 3 clients (So myself and 2 others) for free. Past that it's going to be $14 a month, but by the time I have 2 paying clients, I should be able to swallow the $14 a month.

Only thing is Freshbooks only does 3 things...it does them well, but still, it only does:
• Invoicing
• Estimates
• Expenses

Is that all I need at this point? I know GNUCash can do a lot more...and while I'd like to think that I'm going to track everything perfectly, amortize, depreciate, etc. -- truly I just want to make sure that I'm tracking the right stuff to make my taxes relatively pain free when that time comes.


Ok ready...set...school me!

Hi, I really have mixed opinions about lower end accounting software. A lot of the decisions depend on how complex of a business you have (1 user or many), and just how automated you want the process to be.

I looked at what it would take to have multiple users in multiple locations running from a synchronized database, with services, parts, and manufactured items, and came to the conclusion that one of the best is Great Plains, which is owned by Microsoft.

At the lower end, with less synch features, was MYOB, but still quite a step up from software like Quicken / Quickbooks, etc.

For my current business, which is entirely consulting related, I ended up going down an entirely different path, as money was tight.

Quotes, Invoices, and POs
- I have a 2 page form that I built in excel.
- The forms are identical in every way except for those three words - Quote, Invoice, PO.
- I just make the changes as needed for each client, convert it to a PDF, and email it to them.
- I put a number on the forms to allow tracking to each other

Payments made to others
- Our bank has a very decent electronics payment setup
- We pay nearly everything with either a credit / debit card, or electronically from this account
- We have learned the hard way not to ever pay anyone with a check from our bank account - one of our checks was forged and it caused quite a mess to clean up. Now when we pay with a physical check, we have the bank issue the check from their account, or use a money order.

Tracking
- Our bank account information is all in electronic form, and the payment / payer information can be downloaded as often as you like, to a delimited file / excel like format.
- I pull this into an excel spreadsheet

Accounting
- The spreadsheet has two "sorting" columns.
- I put a 3 letter code into each row to allow sorting (such as travel, parts, etc)
- A second column is used to code the "project" information
- I probably should add a column for sorting by the tracking number, but have not put this on yet.

Within the spreadsheet, I have put "If - then" statements which read my codes, and then automatically put the "price" information (such as travel expenses, etc) into the right column.

Each column is added up, and pretty quickly I can see where I am at. At the end of each period (annual, etc) I can just add the column and get the information for that category, or per client, etc.

It works well for me as my number of transactions is small. If the number of transactions were larger, it just would not do it.

I use Quickbooks Pro to handle the accounting for a 13 person investment management firm...love it and it works fine for me.

I agree with Harry on using spreadsheets. For a small 1-person business I really don't think professional accounting software is necessary. I make one spreadsheet annually to track my income and expenses. I have another I use as a template for invoices. This system has been working great for a long time.