This week we are learning the language of accounting. Tuesday’s post was about organization. In yesterday’s post, we worked on the accounting terminology to prepare us for recording. Accounting is more of a language than it is a complicated math equation. There are a lot of new words and new ideas. If you want to know what is going on with your money, you need to know what everything means.
Today, we are going to continue with HOW to record to your transactions. Remember when I said on Monday that I didn’t expect for you to become an accountant? I still don’t. Like I said, accountants go to school for years, work in the field for years, before they can do “accounting”.
So, how do we get around actually making those T-Accounts? And, how do we get around the crazy world of debits and credits? Are we going to learn how to set up the 8-column ledgers and how to set up spreadsheets? How do we do the accounting ourselves?
Modern technology, my friends! Modern technology!
Imagine a world where you can do accounting… but not have to do any math? Imagine a world where the math is done FOR YOU. EGADS! Can it be so? Yes, my friends… it’s called QUICKBOOKS. And, it is amazing.
Knowing your Numbers Step #4: Buy Software
Rather than sit here and teach you something that can get a little complicated… and have you AGONIZE over why a debit is sometimes added and sometimes subtracted, I’m going to cut to the chase:
BUY SOME ACCOUNTING SOFTWARE and MAKE YOUR LIFE 1000 TIMES EASIER!
I use Quickbooks, and it’s what I’m most familiar with… so I’m going to show you how Quickbooks works. (You will kick yourself when you see how easy it is.) There is other software out there… I welcome you to explore it. But do something. Get yourself some software, please.
First things first… How and what software to buy?
If you are scared to commit, and want to give Quickbooks a try. I recommend starting with the online version. You can try it free for 30 days. After that, the basic version is $10/month. This is a really great option if you have basic transactions (you mostly offer services and don’t have a lot of product or inventory). You can always upgrade if you need more.
If you are ready to commit and know that you need to do this and will use it for the rest of your business life, I would recommend getting the Quickbooks Pro desktop version. It’s a better investment for the long-term.
Here’s how the two stack up:
- Easy to test out if you want to see if you like it. You only pay monthly, so there’s little risk if you cancel it.
- Pretty user-friendly particularly if you are accustomed to work things on the web.
- You can access the online version from any computer. This is particularly helpful if, like me, you have several computers.
- Low monthly payment if you don’t want to fork the $200 upfront for desktop.
- Online is also great for users of Macs. There is a Quickbooks Mac version, but from what I have heard (thought not actually experienced) there are a few limitations (which reports you can get). It’s a new venture for Intuit (the software manufacturer) so these could be temporary limitations.
- NOTE: I use the online version for Get Hitched Give Hope and it’s awesome. I will be showing examples from the online version on Monday.
- Less expensive in the long run. (If you plan to have the software for 16 months+.)
- If you manage a lot of inventory (invite designers, retailers, etc) you will need the desktop version.
- More options for reports. (However, if you are an accounting novice, your need for fancy reports will be nominal.)
- Ability to export information to Excel.
- NOTE: I use the desktop version for mmm… paper. There is no way I would be able to manage my accounting without it.
But, I just don’t have the money to invest…
Don’t give me the argument that it is expensive. These days, the basic Quickbooks online version costs $10/month. I know most of you out there spend more than that on coffee. This is an important investment in your business. I’d argue that second to your website and branding, it is probably the most important thing you can do for your business. The desktop “Pro” software runs ~$160 for the basic version. (Unless you are managing heavy inventory, this is all you need.) I’ve had my version for 4 years. (I have a souped-up inventory management version that cost me about $250.) I’ve paid for few upgrades. Over four years, that $250 investment has worked out to $5/month. DUH!
The only other alternative is to hire a bookkeeper to do it for you. And – guess what they are using? Quickbooks. So, if you’ve given yourself the responsibility of accounting, you need to use some software too. You need to run your business like a BUSINESS. And, having the software to manage your finances is FUNDAMENTAL.
This is quite a long tutorial… so I’m going to break down the USE of QUICKBOOKS on MONDAY. PLEASE come back and LEARN how to use all this fun EASY-PEASY stuff! See you then!