How to manage your business finances

Bookkeeping Systems to Manage Your Business Finances

If you are just starting out, you may be able to get by with a simple spreadsheet like this one to help you track everything for the first partial year.

Now, I love a good spreadsheet. But I DON’T love them as a long-term bookkeeping system. The number one reason is because you have to manually input everything, and there’s not much available for reporting or reviewing purposes. 

It’s also easy to accidentally miss or overlook something. So, while yes, it can be a good short term solution, you want to consider upgrading to a software as soon as you start getting a higher volume of transactions you are having to record.

A good bookkeeping software will have automation features that will help you spend less time (check out my absolute FAVORITE features here), and have greater accuracy in your bookkeeping. Let’s look at a couple popular software options:

1. QuickBooks Online:

QuickBooks Online (QBO) is by far my personal favorite, and it is the most popular option among United States business owners. In my opinion, it’s the most user friendly option out there. 

You can connect it to most bank & credit card accounts so all of your transactions will automatically pull into QBO, and you can assign a category to that transaction in a simple click. 

If you have regularly recurring transactions (monthly subscriptions, vendors you regularly purchase from, etc…) you can even set up rules so QBO remembers how these should automatically be categorized.

If you want help getting your own Quickbooks Online setup, and additional trainings so you know EXACTLY what to do and when to do it, then checkout my signature course Shopify Bookkeeping Made Simple to help you do so!

2. Xero:

Xero is a software that has a growing popularity in the US, and I believe it’s actually the #1 software in other parts of the world. It is a lower cost software, but I’ve found it to be a little more “clunky” and not as user friendly. 

For me, it had a greater learning curve than QBO did, but it does have the same features as far as being able to connect your popular bank & credit card accounts, and having it remember how you’ve typically categorized similar transactions in the past.

3. Wave:

Wave is a, okay budget friendly option, as it’s FREE as a very basic software. There are going to be limited automation & reporting features (although better than a spreadsheet), and you DO have to pay if you want to connect your bank & credit card accounts. But it does allow you to import a CSV export from your bank website so it’s better than manually entering your transactions one by one.

Receipt Management Tools to Manage Your Business Finances

Another important component that goes along with bookkeeping is receipt management, or simply keeping all your “papers” and receipts organized. You really should have some type of “proof” that goes along with every single transaction in your business to be able to show what you purchased in case you are ever audited.

If you’re old school, you can save the physical COPIES (not the originals – the thermal ink will fade with time) of your receipts and invoices in a filing cabinet system.

Another good system is to save them in a Google Drive folder. Create sub folders for each year, and then sub folders in there for each vendor. I also recommend using a similar naming convention so you’ll be able to tell what each receipt is for without actually opening it to view it. Something like “2023.10.31 Costco – Office Supplies”.

If you’re interested in using a software to help organize your receipts digitally, there are a couple popular options out there. These are the ones I’m familiar with, but I know there are others out there as well.

Both of these have the ability to integrate with at least one of the bookkeeping software I listed above, so an image of the receipts will actually be attached to the transaction record in your bookkeeping software.

1. Hubdoc:

HubDoc is my preferred solution, and it’s what I use in my own business. You can take pictures of physical receipts and upload through the app, forward emails with receipts attached, or upload directly to HubDoc in a web browser.

It connects to both QBO and Xero, and it can “read” your receipts and automatically populate the date, vendor name, and amount of most receipts to save you time. It will also remember how you’ve categorized receipts for that vendor before, so you can quickly review and “publish” to your software. This will automatically create the transaction in your software without you having to do anything else!

Since HubDoc is owned by Xero, you will get a free subscription if you choose the Xero bookkeeping software, otherwise there is a small subscription fee.

2. QBO Receipts:

QBO Receipts is a feature within QuickBooks Online. It works very similar to HubDoc, but it unfortunately does not do quite as good of a job to memorize and auto fill regularly recurring transaction. But, this is included with any QBO subscription level, so there is no additional cost.

To learn more about any of these receipt-saving options, check out this post.

How to have a stress free tax season:

In the world of bookkeeping, staying organized is key to an “easy” tax season without any stress or anxiety. By setting up a system to easily organize all your transactions & save your receipts, you will be ready for taxes in no time!

Schedule some time every Monday morning to work on your bookkeeping so you can stay on top of it, and just get it out of the way before the busy week begins.

If you want to learn more about setting up and maintaining your own Quickbooks Online for your own bookkeeping needs, then check out how you can feel confident doing so through the Shopify Bookkeeping Made Simple self-paced course!

Trust me, your future self will thank you when tax season rolls around.

Here’s to finding your own version of freedom,