February 13, 2013
Well, as it is tax season, and I wrote about getting yourself organized for it last week, I thought I would continue along that vein this week. I have tried a few of the different accounting options out there, so I thought I would spend some time helping you figure out the best bookkeeping method for your dayhome business.
So, your options are (and this is just what I’ve had experience with and have liked…mostly).
#1 – Pay your accountant or bookkeeper to do it for you! This is by far the easiest as you just have to ensure everything gets to him or her, and then pay the bill at the end of the year! However, this one is definitely the most expensive.
#2 – Quickbooks and/or Simply Accounting. I have used both and they both have their pros and cons.
Quickbooks I found to be quite intuative and easy to use. It has large, easy to understand graphics and the labels for different accounts are very straightforward. You can either purchase a desktop version, only for PC, or an online version, which is compatible with PC and Mac. It will cost you anywhere from $49.99 to $499.99 for the program, depending on the level of complexity of your company, which is a one time fee. Quickbooks, however, in my experience, is not the program of accountants. So if you do your own bookkeeping, and then have your accountant do your year end stuff (that’s us), it doesn’t work quite so seamlessly.
Simply Accounting, while I use it every month, I don’t love. We’ve come to an agreement to agree to disagree Which means I have learned its quirks, and have stopped swearing at it…. mostly. However, this is the system most accountants use, so the transfer at year end is seamless and easy, and that’s worth it for me. It is an incredibly powerful piece of software, and can do pretty much anything you would ever need in an accounting program. One downside is that it is only compatible with PC. The program will cost anywhere from $60 – $575, again, depending on what you need.
#3 – Freshbooks. This is a GREAT online accounting tool. It is super easy to use, accessible anywhere because it is all online, and really intuitive. It does not do ALL the things that the above programs can do for you (although they keep adding functionality, so its coming close!), but if you have a simple business, with simple expenses and income, its lovely. Also, you can try it for free for 30 days to see if you like it. Its biggest pro is that for companies that have 3 or less clients, it is FREE!! If you have more than 25 clients that you will need to invoice, then its $19.95/month. You can also have your clients pay you through the Freshbooks site if you are open to being paid via credit card.
#4 – Excel or Google Drive Spreadsheets- if you are looking to keep all your expenses and income tracked in one place, and then you are willing to go through it all at the end of the year to do your taxes, this is probably the simplest and cheapest way to go. However, there are no tools here to help calculate GST, what you can and cannot claim, maximizing your expenses, etc.
Regardless of what you choose, staying consistent and spending the time to really understand the ins and outs of the program you chose will help you in the long run. Just like the toys, crafts and meals are important to the health and happiness of the children in your care, effectively managing expenses and income is equally important to you and the health of your dayhome business.