What are some tools, tips, and strategies for tracking expenses in the least friction way as possible?
We don't have the resources to get an accountant from the get-go so I will be tracking everything myself for now.
I use Outright.com (now GoDaddy Bookkeeping) paid plan that's about $10/month, but the free plan is fantastic for automatically tracking all the money that goes in and out of your checking and credit card accounts. The only feature the free plan doesn't have is access to tax forms, so you can just upgrade come tax season. Once you link accounts, it's super simple and 95% automated. BEST PART: when you link accounts your transactions for last 90 days are pulled in, so if you setup now you are in great shape for 2014. Come tax season, just print your P&L statements and bring to accountant.
A couple of tips:
- Avoid cash transactions or you will have to store physical receipts for anything over $20
- Get an AMEX business credit card and use it for all business related expenses except for some reimbursement. Your credit limit will slowly grow with your business needs and you will get rewards as well
- Review transactions once a month and categorize them into appropriate categories. As time goes by it's hard to remember what some of the smaller charges were based on just vendor name. The software will recognize recurring transactions and file them automatically if you check the box the first time you identify a transaction.
Accounting used to be a headache, but online software makes it easy these days.
EDIT: While I mention a specific tool I use and like, I generally recommend setting up with an online accounting software someone recommends as soon as you have either a business checking account or a credit card. Just look for the simplest feature list (or go for a free plan) and you should be Ok for a year or two. I believe switching would only be a pain if you decide to do it in the middle of your fiscal year, otherwise should be as painless as setting up a new account.
An Excel spreadsheet, (or, if you insist on a cloud solution, Google document), and a shoebox for receipts/papers. i.e. the least possible distraction, with the simplest interface, so that you can concentrate on building/selling.
xero.com plugged into your bank account enables you to track everything really really well for just $9/month - I think Wave accounting is free actually, and similar but not personally used it.
Both should scale with you in at least the first couple of years (switching can be disruptive & costly)
There are several number of tools in bookkeeping like outright, invoicera, Free Agent, Shoe Boxed, Curd Bee, Pulse, Rhino Accounting, Fresh Books, Kashoo, Invoice Journal, Less Accounting, Blinksale, Yendo, Harvest, Zoho Invoice, Bill.com, Endive, Citrus, Quickbooks online. Among this Quickbooks software makes the work of bookkeeping more easy. Among these tools Rhino accounting and Invoice journal are free tools and other are paid tools.
When it comes to tracking expenses and time or invoicing, I think http://www.keepek.com/ is better suited for your needs. In addition, with Keepek android app http://goo.gl/61B2Zb : just snap pictures of your receipts, the app extracts then key information such as merchant name, amount and date. The picture itself is stored and you can view it on your smartphone anytime and anywhere. You can easily manage categories and enter manual expenses as well as mileages. You can also share expenses with others you choose.
The app is free.