035 Streamlining Your Finances - Apps vs Spreadsheets
Streamlining your finances requires a recordkeeping system, and nowadays, software is available and accessible to automate that without much intervention or calculating on your part. This episode discusses why paying for an accounting software or app is more beneficial than using a spreadsheet system.
Regan shares with you how to get a discount on QuickBooks Online specifically, as she an Advanced Online ProAdvisor. While QuickBooks Online is the app she recommends for her small business clients, there are other options that may suit your needs better. Either way, spreadsheets require a template that still needs to be adapted to your business, or your direct data entry input and formula creation.
Discover the power of accounting software in streamlining your financial management. Learn why Excel spreadsheets fall short and explore the benefits of automation, accuracy, real-time insights, integration, scalability, security, and cost savings. Streamline your finances today with modern accounting software solutions.
Be a better CEO of your small business by utilizing automation and applications to keep track of your bookkeeping.
As always, you can follow me on my socials and get on my email list for more tips on how to do your bookkeeping better, reminders and information about taxes, and all the ways you can improve your relationship to your money mindset.
Download my free receipt organization guide, Chaos to Calm, using this link: https://tinyurl.com/4dm42vav
Ready to engage in bookkeeping services or want to learn more about getting trained to work in QuickBooks Online effectively? Schedule a complimentary consultation with me here: AllEaseAccounting.as.me/Consult
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Hey, everybody. Welcome to money through ease. I'm your host Regan Bashara, and today we're doing an episode that's a little bit off the cuff. I wanted to come on and talk about the differences between using a financial or accounting software versus just using Excel to track your business bookkeeping. So, I think there's a lot of people out there that DIY their own bookkeeping, and I kind of rolled my eyes whenever I said that, but it's not something to roll my eyes at. There are ways to make Excel work for you when it comes to record keeping for your small business financials, but I think there's a lot of limitation about using just a spreadsheet like Google Sheets or Excel that I want to go over specifically and talk about the difference that using and accounting or bookkeeping software can make in your business finances.
So, we have a lot of new apps and software available on the market today to keep track of our business finances and that is awesome, and things are improving every year. Prices go up every year as well, and that's that makes sense, right? As there is inflation and as there are updates to these apps and software, you know, they need to charge more to be able to develop better programs for us. We want to make sure that our books are accurate for a couple of reasons and the first is that this is what gets reported on our taxes as small business owners. So of course, you want your books to be accurate. Because we all want our tax return to be as accurate as possible. We don't want to be over or underpaying on our taxes.
And aside from taxes and tax preparation, bookkeeping allows us to set goals in our business and to grow and achieve success and that's how we measure our success is through our financial records in the past, like in dinosaur times, you had accountants using literal paper registers where they would record transactions. They would sum everything up by hand. They would reconcile and balance the books that way. It was literally a book of financial transaction records. That's why we call it bookkeeping. Keeping the books. And then you had, you know, computers that became more affordable for everyday people to use and became something that professional people started using to do their work. And so, accounting ended up being something that you could do on a computer. And in the late 90s, I believe QuickBooks came out with their software. And since then, they've developed an online app that you can use for that, or you can use it anywhere you know you don't have to be on your computer, you could be logged into any computer that has access to the Internet and access your bookkeeping that way. I am a QuickBooks Online Advanced ProAdvisor that is the software that I recommend to all my clients, and I recommend that you use that as well. I think it is the most powerful tool for bookkeeping and accounting for small businesses, and it is still very affordable.
So, let's talk about what the limitations are of using Excel to do your bookkeeping and accounting for your small business. So, Excel is just a spreadsheet software, or you can say if you use Google Sheets or open-source software, that is some sort of spreadsheet. This creates a lot of challenges for someone who is not an accountant, and even for accountants themselves, you have to create rules and formulas and put the data in in a certain way to get the result that you want in Excel? It's not just built in. They might have some features now where you could like, preload a formula that would calculate a profit and loss statement for you. But there is some level of like you having to go in and customize how the data gets analyzed and reported in Excel you could Google and download spreadsheet templates to use for your profit and loss and balance sheet statements and keeping track of your finances every month. But like, that's still leg work that you have to do. It's not just a turnkey system to track your finances. And we are doing manual data entry in Excel. Even if you downloaded your transactions from your online banking each month in like a CSV file or an Excel file, you would still have to manually enter that into whatever formulas you have. And so, there's a lot more room for error whenever you have yourself, a human, you know doing data entry.
So, this is all very inefficient and can create a lot of room for error in your financial reports. And because we want our financial reports to be as accurate as possible, this is why I don't recommend using Excel bookkeeping software. QuickBooks was developed to cover a lot of that room for error, that margin for error. It was created to make bookkeeping more accessible to, you know, just your generic small business owner who was not an accountant but it was also made with accountants in mind and how we work and the ways that we have to follow certain guidelines and tax rules. So, there's a lot of powerful software that has been developed that allows me to do my job quicker and more accurately, but it also allows you to do your own bookkeeping. And so if you are somebody that is doing your own accounting for your small business, for your freelance work, whatever it is, I do actually recommend that you pay for some sort of accounting or bookkeeping software to track your revenue, you know, your income from your business activity and then tracking all of your expenses. I do not recommend that you use Excel.
I've talked about the bare minimum features that you want to be able to have in an accounting software before. And I have a whole episode on that. But just to really quickly go over that again, is that you want to be able to have the ability to reconcile your bank and credit card and loan accounts. In your accounting software you also want to be able to have pre-customized reports for like your profit and loss and balance sheet. You may also want to consider software that has payroll capabilities if you're going to be having people on payroll. So this is different from Excel because all of the formulas and all of the procedures and methods for bookkeeping and reporting are built into the software, so you do not have to like, come up with your own formulas. You don't have to download templates. Like it's already built in, and it automates a lot of things that take most business owners a lot of time to do so. If you have an accounting software that does allow you to like send out invoices and collect payments for you, this removes so much time from you having to send out invoices and collect money from people. And then the reporting is automatic whenever you're using the software to track your income and to accept payments from people as well.
So, I think that it's super important and helpful to have things automated and have things be accurate. And you know, working with your data in real time, downloading your bank transactions every day or every week, and going over them. So, I like QuickBooks because that's the only software that I use. If I had a client come to me and they were using Freshbooks or Xero or something else, there are ways that I could, you know, help them. But I prefer for all my clients to be on QuickBooks Online. I have already said that it is one of the most powerful tools on the market for accounting software and that goes for accountants and bookkeepers, like me, and it also goes for small business owners like you.
I think that having things automated, saving yourself time, saving yourself energy, not having to have your own, you know, system of reminding yourself to go in and invoice people and collect payments, a lot of this repetitive data entry can, you know, really bog you down in terms of time. And if you're a small business owner or freelancer, contractor, after you know how your time is, and the time that you spend doing things that isn't client work to get you paid. You probably want to reduce the time that you spend doing administrative stuff as much as possible so that you can free up more time to make more money.
So, automating things, saving ourselves time, reducing errors or the possibility of errors, having things as accurate as possible, it's just all, it all makes sense to me. So, saving yourself time, let's talk about what cost this comes at, right? Because, you know, I don't know of any free software that is really robust enough to handle any small business’s bookkeeping. The software that is worth your time and energy is going to cost money. And since you are in business, you get to claim the fees that you pay for that software on your taxes. So, it is a deductible business expense, generally, which means that, you know, you are getting not only some sort of benefit from having software and automating things and saving yourself time, but you do get a little bit of a tax benefit by deducting that as a business expense.
QuickBooks Online, the most robust subscription, so the subscription level for QuickBooks Online with like the most features for small businesses, is QuickBooks Online Plus. And I believe they are raising the price to $90.00 starting September first, or may, it might be earlier than that. They just announced price increases. I can get my clients 30% off of their QuickBooks subscription for online subscriptions. If that is something that interests you, you can get on a consult with me, and we can talk about what subscription level might be right for you. And look at, you know, what you're using now, and if you're using Excel, there is a way that we can, like, import things into QuickBooks. And so, you're not having to do all of that manual data entry or I'm not having to do it for you to get that imported over. And then there are lower subscription levels that come at a more reduced cost. So, QuickBooks Online simple start I believe is 30 bucks a month. Once again, I do get 30% off from my clients.
So, you know, if you are a freelancer or a contractor, just a solopreneur, sending out invoices, collecting payments, and you just need to track your expenses for tax purposes, something like QuickBooks Online simple start might be a good option for you. And it's also still very affordable, although you may be “small, a small business” right now, we all want to be able to grow and set goals and achieve them and increase our revenue. You might have a goal to eventually hire, you know, a virtual assistant or employees to work in your business. That term is called scaling. That would be scaling your business which is where you scale up and grow it up, and then you have to hire people basically to help you run the business because there's a lot of work to be done and it can't just be you anymore.
As you want to scale, using something and accounting software like QuickBooks Online will allow you to do that without having to create new systems. There is scalability built in. You can always upgrade or downgrade your subscription level and you get access to more tools and reports and features when you upgrade. And then it integrates with third party software, usually, well. So if you're using some CRM or sales program or some other app and you want to be able to connect that data to QuickBooks Online, they do have a way to connect third party apps. If you're using something specific and you want to see if it does integrate with QuickBooks Online, you can go to their website or you can Google QuickBooks Online, plus whatever app you're using, like Salesforce or whatever, and see how that integrates. It's also a good way to manage your receipts. I do have, you know, my system of managing receipts for my clients and it does not use QuickBooks Online. I have my own portal that I keep all of their sensitive financial information, but if you wanted to have one place to have all your financial data, including your receipts, QuickBooks Online does have a file management system where you can attach pictures of receipts and PDF documents to the transactions in QuickBooks Online and you can have all that data in one place.
So, it integrates pretty well with most third party apps. It already has a lot of features in the software itself that you might not need to use third party apps anymore and then it is going to be scalable as your business grows. Considering all of that, I want you to think about what your small business’s needs are in terms of record keeping and I want you to think about what you're using now and where you want to be in your business next year in five years. And what kind of system is it going to take to have record keeping that supports you at that level? That's truly the question we want to ask. Cost is really not a factor when it comes to accounting software. It is very affordable and accessible. And like I said, I can get you a discount. And the features that are available far exceed anything that you're going to be able to do in Excel or Google Sheets or some other spreadsheet software.
Give yourself the gift of automating things and reducing the time that you spend on record keeping. And managing invoices and such. Give yourself the gift of time back and use something like an accounting software like QuickBooks Online that is going to support your business in the future.
That is what I wanted to talk about today and let's all be thinking about that over the next week. Where do I want my business to be in a year, in five years? And what kind of system do I need to support myself on the way there? And then what will I need whenever I get to that level in my business that I need to have a more robust accounting system in place? Thanks for listening today. Make sure you like, rate, leave a review. Share this podcast with all your people. And I will see you next week. Have a good one.