Running your own business means keeping track of the money. You hire somebody or you do it yourself. You have to pay taxes, so you have to have records. The mythical pile of papers in a box is romantic, cute perhaps, but really dumb if you’re building a business. Not keeping track of every business transaction is going to cost you a lot. Under-reporting costs and expenses means you pay more taxes. Under-reporting income means you just broke the tax law. 
- You need to use software. It will do data entry of checks and receipts and such, so it’s really bookkeeping, but they’ll call it accounting software.
- Everybody hates their accounting software, and so will you. Regardless of which software you use, you’re going to hate it. But you need it, so deal with it.
- Which software package you choose isn’t as important as you think. What is important is that you choose one and start working with it.
I worked with a man who drove an otherwise promising robotics venture into the ground over this. He was great with the technology and pretty good with customers, but terrible at administration. “Jim, are you paying employer taxes?” He would roll his eyes or curl his lips. “Of course, of course,” he’d say, but what he meant was “don’t bother me with that trivia, I have a company going up here.” The business died within a year, and when it did he inherited more than $90,000 owed to the IRS. And yes, by the way, his company was incorporated but the IRS pierced that so-called corporate shield like a knife cutting hot paper. Don’t mess with the IRS.
So, if you’re starting up, you have three choices: you can include somebody in your team who does this, or you can hire a bookkeeper at an hourly rate, or you can get some bookkeeping software and start keeping track of things yourself. You decide which is right for you. The team member is appropriate for the building something or trying to fly startups; but do-it-yourself or the hourly bookkeeper are the main options for the just get going startup. You can’t not do it.
If you’re going to do your own books, then I’d like to give you a simple recommendation on which of the major competing software products to choose, but I can’t. I don’t think it makes that much difference. What does make a huge difference, however, is the link to your bank. I strongly suggest that before you choose software you first check with your bank, and you then choose whichever one of these can link up to your checking account electronically to relieve the problem of data import. This is much more important than any of the differences between the various packages. For sure the soft white underbelly of keeping the books is the annoying problem of data entry, and no feature is going to compensate for the luxury of sucking the data up from your bank into your books automatically, without having to type each record. That’s magic, and you want it, almost regardless of other features.
I will say that my underlying dislike for all of the packages hasn’t been acquired without some work. I’ve been dealing with this for 30 some years. I kept my own books by hand for several years, with loose-leaf binders. In my defense, that was before personal computers. I also wrote a complete general ledger system in cbasic. I’ve worked with Quicken, and QuickBooks, and Accountant Inc, and SBT, and Microsoft Money too.
Intuit, which makes Quicken and QuickBooks, has just started this week a free offer of it’s new SimpleStart, which seems (I haven’t used it) like enough to get you going. However, there are other good choices, and free is not that important when full cost is $50-$100 at most, and you’re going to spend a lot of time with it, and the key factor is import from your bank statement. Two days ago I met Ridgely Evers, the original author of QuickBooks and founder of NetBooks, and if NetBooks is as impressive as he is personally then I’d recommend that one–again, as long as it works with your bank. It does include a monthly fee, however, rather than a one-time purchase. QuickBooks is the market leader for small business accounting, but Peachtree, owned by Sage Software, has some very credible offerings, and Microsoft Money is also competent. Sage is actually bigger worldwide than Intuit, but Intuit is bigger in the US, and of course you’ve heard of Microsoft too. They’re all pretty good, and they’re all easy to hate. And you need to choose one and get going.
This entry was posted on Wednesday, October 17th, 2007 at 8:49 pm and is filed under startup advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.5 Responses to “Hating Accounting Software: Deal With It”
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October 19th, 2007 at 7:21 am
Tim you don’t have to hate your accounting software. LessAccounting.com is designed to get out of your way.
http://www.LessAccounting.com is the only web based accounting solution that is designed for the small business.
October 22nd, 2007 at 2:47 pm
Re Allan Branch’s comment, for everybody else, from Tim.
I approved Allan’s comment reluctantly because it’s so close to plain spam. I think he looks bad to assert that his is the only web based accounting solution designed for small business, when the post itself mentions several others. On the other hand, letting it go means you can decide for yourself, so buyer beware.
October 24th, 2007 at 7:34 am
Thanks Tim. I loved this article (your “Don’t mess with the IRS line gave me a chuckle!). In my opinion, if you aren’t going to take the time to do your bookeeping properly, don’t do it yourself–hire an accountant. It’s as simple as that. No matter how advanced and “easy to use” it may be, there is no accounting software out there that can take your receipts and enter them for you. Bookeeping should not be taken lightly and while the software may seem more cost efficient, as the man in your article found out, an accountant would have been worth his weight in gold when all was said and done.
November 30th, 2007 at 3:25 pm
Thanks Rebecca. I’d make only a slight adjustment to your suggestion, which is that I suspect when you say “accountant” you mean “bookkeeper.” Could that be possible. I think of accountants as several hundred dollars an hour reviewing your bookkeeping and a bookkeeper as more like $20 an hour doing the actual data input work that you would otherwise do in software.
– Tim
June 29th, 2009 at 11:08 am
Tim,
Looks like a pretty old posting but I’ll give my 2 cents. I am part owner of an oil field services company in Midland, Texas called Andrews Anchors. While I agree that working with accounting software may stink for the average non-accountant, the software we use has been great. We use Sage Accpac ERP because QuickBooks and other small, bookkeeping programs can’t provide all the functionality and customization we need to run our business efficiently and competitively. I’ll grant you that there’s not a huge differences between accounting software when you look at mid-market applications, but the real difference comes with a lot of the extra applications you might need to run your business optimally, and perhaps more important, what consulting firm you get to implement and customized your software. We rely heavily on the business software consultants at Mindover Software, which is based in Austin and Dallas, Texas. They helped design a solution for us that includes not just Accpac accounting software but also CRM software that allows our customers to see reports on job status and even request new jobs. We’ve literally saved hundreds of hours because of the integration between SageCRM and Accpac’s accounts receivable and order entry modules. Mindover Software made it all happen for us, and so while a lot of accounting software may be similar, they are not when it comes to add-on solutions like CRM and consulting firms that design, implement, train and support your solutions. My consultants from Mindover Software are heroes around here, and I don’t mind telling the world to look more closely at what you really need to make your company successful in today’s market. If you don’t think the competition is looking for a way to knock you out of the game, you may be in for a surprise. Don’t just take my word for it, you can check them your for yourself: http://www.mindovercorp.com. They’ve helped us save money and win our largest customers to date and you can’t go wrong with that!