Small Business Finances

business woman reviewing financial document

Trying to coordinate the financial management of a small business - bookkeeping, payroll, sales, expenses, billing etc. - can be overwhelming. Fortunately there are a number of solutions available today to help with these tasks. How do you choose the right one (or ones) for your business?

Choose Bookkeeping Software First

The first thing you must have to run your enterprise is a way to easily keep track of the money coming in and going out of the business. Accounting software such as Intuit Quickbooks can record expenses and revenue, prepare and send invoices (and record when they are paid) and report on cash flow in and out of your business' various bank accounts.

Most accountants either use or are familiar with Quickbooks, so it is easy to share data when you need expert help. Intuit also offers payroll software that links easily to Quickbooks and helps insure that you are paying your employees correctly.

Financial Management Beyond Bookkeeping

Aside from bookkeeping, there are literally hundreds of online applications, software programs and other products available to help manage every aspect of your business. To decide which solutions to use, think about how you run your business and how your finances are organized.

Billing and Timekeeping

If you need to keep track of your time to bill your clients, a timekeeping and billing app like Freshbooks will be invaluable. Freshbooks can also send invoices and create recurring payments or bills for regular clients.

If you want to compare products and features, other timekeeping apps include solutions from Toggl and Harvest. While Toggl does not include an invoicing function, Harvest does, and like Freshbooks, both have free trial periods so you decide which format works best for your business before you invest any money.

Online Commerce

If you sell products over the Internet, there are a number of different software packages and apps to help you organize your finances and run your business from nearly anywhere. Your choice should depend on factors such as your expected traffic, the average size of each of your online sales and whether you intend to accept credit card payments.

PayPal is probably the most recognized online payment system, and its high customer recognition rate makes it a popular choice for new businesses or those that do not accept credit cards. A site such as Dwolla might be ideal if you tend to have many small customer transactions; it does not charge for transactions under $10.

When you decide to accept credit card payments for your online business, there are many secure options to help. If you sell at trade shows and other offsite locations, an app like Payanywhere allows you to accept credit card payments from your phone or tablet, without having to depend on bulky equipment. If your needs and budget grow bigger, Authorize.net offers online fraud protection, customer support and one of the widest credit-card payment services available online. Different mobile payment systems have different options and fees, so do some research to find the service that works best for you.

Expenses Oversight

If you have trouble keeping track of receipts and other expenses, Expensify is a mobile app that allows you to take a picture of your receipts and then converts them into a neat expense report. An app called InDinero can aggregate data from multiple accounts and create financial snapshots and forecasts for every part of your business. It works with Freshbooks and Expensify so you can see all of your business' financial data in a single place. For independent contractors and sole proprietors, Mint offers financial management and oversight for all your spending and accounts. Best of all, Expensify and Mint are both free for individuals and small businesses.

Getting Expert Assistance

No matter how well your online applications and software track your business' financial matters, sometimes you will need to hire a professional to help. Whether you need a weekly bookkeeper to help input data, a third-party to oversee your payroll or an accountant to do your taxes once a year, bringing in an expert is one of the most important things you can do to uphold the financial health of your small business.

While it will cost you money up front to hire someone to perform financial tasks, having up-to-date billing and financial records will save you money in the long run. Do not wait until you forget to send out invoices or miss paying bills to get help.

Take Your Time to Find the Best System

It may take some trial and error to figure out exactly which combination of small business applications and software work the best for you, but if you can take advantage of the free trial periods many of the products offer you can figure out what solutions you need before you spend a lot of money. Because no one piece of financial software or application does absolutely everything, there may be some overlap in functions. As you become more comfortable with the various options, you can choose which products you like the best and which are not worthwhile.

The most important thing to remember about choosing a financial management process is that you must have something in place to manage your money. Even a process that doesn't work perfectly right from the start is better than not having one at all.

Small Business Finances