Small business / Private contractor stuff. Do I need Quickbooks?

[lifejoy]

Wondering if I should use quickbooks or if I could possibly make my own spreadsheet type of thing. Quickbooks sounds to me like fancy spreadsheets but I've never used it.

Thanks for any tips!

[walkwalkwalk]

Not enough information. Are you in need of software to categorize expenses, send invoices, record income, then prepare somewhat legit-looking financial statements for your business? If so, then yes it could help you. Otherwise if you're just a contractor with limited expenses, I would say excel would be enough to get by.

[BlueHouse]

I've been using Quicken for my personal finances for years, so when I started my business, even though I bought and paid for Quicken, my business needs were so small that I just added a new account file into Quicken. 

So yeah, you can do a lot in a spreadsheet.   My advice:  go as simple as possible and build up when you need to.  Don't try to account for every possible future scenario now, because software and systems will be outdated by then anyway.  I used to process all my invoices in a really complex way, and now I just use Excel and save a copy each month.  So easy and my invoicing now takes 5 minutes/month instead of the 1.5 hours it used to. 

my business needs: 
I have one credit card that I use only for business purposes
I have one business bank account
I have very limited business expenses
I keep one timesheet and track all hours + reimbursable expenses on that and templates/pivot tables generate my invoices monthly.

Good Luck life joy!

[SeattleCPA]

I don't know enough about your industry and its tools, OP, to provide a good metaphor. E.g., I once learned what a hammer drill was only after spending several hours trying to drill holes in a concrete deck.

But Excel is the wrong tool for doing small business accounting.

You want a tool designed for the job at hand... one that produces not just an income statement but also a balance sheet. (Both needed for your business tax return if you're successful.) And you want a tool that includes built-in mechanisms (like double-entry bookkeeping, bank reconciliations and bank feeds) to ratchet up the quality of your information.

[nereo]

But Excel is the wrong tool for doing small business accounting.

This^. 
I managed a small company of 9 employees (we were an aquaculture farm that sold our products both wholesale and retail) and we used Quickbooks. I know it's not the only business software out there but I would NOT attempt to run my business with excel spreadsheets.

Things Quickbooks can do easily that Excel cannot

• PROCESS PAYMENTS (including CC, paypall and cash sales)!!
• Generate Invoices
• Notify delinquent accounts and auto-email (or mail) invoices to said clients
• Track Sales & break it down by week, month, quarter
• Track expenses & break it down by week, month, quarter
• Store vendor's information
• Sync with Turbotax for tax-document prep (or file reports for useful for a CPA in filing your taxes)
• Shipping! Ship with UPS/FedEx/USPS & track packages
• email customers tracking numbers, receipt & 'capture' their emails for future marketing

you can probably figure out ways of doing these things with excel, but with QB it's dirt simple.
Consider this typical example - a customer wants to buy a bracelet and have you ship it to his sister.
In about 60 seconds with QB you can 'add new customer (and record billing & shipping addresses, email and phone number(s)), make a sale (charging appropriate sales tax), generate a professional-looking invoice & receipt, accept payment, mark that item as 'paid', have that item removed from your inventory and have all of that info included in your monthly sales report and quarterly tax fillings.

I did something similar to this at least a dozen times/day - plus sent out orders to our existing clients with invoices.  I wouldn't want to attempt it with excel.
For a small business the cost is negligible

[BlueHouse]

But Excel is the wrong tool for doing small business accounting.

This^. 

In general, I agree.  But it completely depends on the type of business.  OP, will you have sales? Keep an inventory?  Need to keep customer records?  Have multiple suppliers or vendors?
I did not need anything complicated because my only recurring bills are 1. health insurance premium and 2. mobile phone payments. 
I send out two invoices per month that are based solely on my hours. 

It's just too easy to try to complicate it. 

 

[Father Dougal]

I use Wave. It's free and cloud-based, so appeals to my Mustachian impulses. It is at waveapps.com. It's good for a simple business.

[dandarc]

I use Wave. It's free and cloud-based, so appeals to my Mustachian impulses. It is at waveapps.com. It's good for a simple business.

I used wave for a non-profit I was the treasurer of. Worked OK - would have liked better reporting, and I'm told it has gotten better since I stepped down from that position.

I'm using spreadsheets for my personal business, but it is crazy simple much like BlueHouse's - one invoice per month, very few expenses.

[Evgenia]

+1 from a good friend who uses Wave for her (professional, high-end) jewelry business. I have used Freshbooks for four years now. It had more than what we needed, at a lower price, and was a lot less expensive than competitors in our early days. We're very happy with it. Good luck!

[Overfocused]

I have a friend who uses Manager.io. It is a full-featured freeware and paid if you need advanced data hosting. Seems very good.

Anyone else used it?

[nara]

Using spreadsheets (esp as you grow) is going to turn out to be a waste of time that you could otherwise spend on other areas of your business. QB is cheap and most accountants/bookkeepers will ask that you use it anyway.