I have a conversation about bookkeeping software it seems every week! What’s the best? The answer, like most things, is it depends.
If you’re working with an accounting professional
The best in class accounting software out there right now, in my opinion (and many others in the profession), is QuickBooks Online. A lot of people complain about it and have told me how much they dislike it, and I get that. If you’re trying to use QBO without any accounting training, it’s going to be tough. QBO is to us professionals like the Adobe suite is to graphic designers; it has all of the bells and whistles we love because we understand them. For someone DIYing it without training, something else is probably better - like Canva for design. Also, if you tried QBO 5-10 years ago and didn’t like it, know that it has come a long way since then.
The competition: There are still a lot of loyalists to QuickBooks Desktop. We find that it is not as streamlined, and the industry and world in general is trending more cloud-based. I wouldn’t be surprised if they stop supporting QBD in the next few years. At conferences, it’s delegated to a small table in the back. In the online space, Xero has been gaining in popularity in recent years but the functionality just isn’t up to par with QBO.
If you’re DIY bookkeeping with a simple business
My recommendation for entrepreneurs just starting out who have a simple business is to use an Excel spreadsheet. No fancy software needed. Simply download the transactions from your business bank account into a spreadsheet every month and add a column to categorize them. A pivot table will get you a summary that you can use for taxes. Then when you are ready to hire an accounting pro to help you, you can start clean in a software.
Every single client who was doing it themselves in a software we have had a bit of a mess to clean up. There’s a lot of accounting going on behind the scenes in the software that makes it really easy to screw up. It’s just not worth your time to try to learn.
If your business has anything that makes it more complicated, like sales tax or payroll, I highly recommend working with someone. Bookkeeping is also one of the easiest things to outsource once your business is growing and you can’t handle everything yourself anymore.
If you really, really want to use a software anyway
Can’t stand spreadsheets and really want a software to DIY? You may want to check into any applications you’re already using for other things, like your CRM. A lot of them have a “bookkeeping” piece built into them that would suffice in place of a spreadsheet until you’re ready to work with a bookkeeping professional.
The best “freemium” bookkeeping software out there that I have found is Wave. It is free, is able to be customized, and has a bank feed feature which saves time. You can send invoices from Wave, too. It is still a true double entry accounting system, which means it’s fairly robust.
The competition: QuickBooks Self Employed is popular, probably because of the QuickBooks name, but you can’t do much with it. I’ve also looked into FreshBooks, GoDaddy, and a few others and have not been impressed. Why pay for something when you can have a free solution with a spreadsheet or Wave?
All of my recommendations
QuickBooks Online (working with a pro)
A spreadsheet
Your CRM
Wave
The bottom line is not to try to force yourself to learn accounting! It’s not as simple as learning a normal software and which buttons to push. Make it easy on yourself while you’re just starting out and then get help when you’re ready.