Archive of ‘Bookkeeping’ category

Weekly Bookkeeping Checklist for Bosses

| Bookkeeping, Business, Small Business

Weekly Bookkeeping Checklist for Bosses

Bookkeeping is not the most glamorous component of running a business. I know, BIG surprise. Typically, it’s way more interesting to learn about sales, marketing, or money mindset.

And then I read statistics like “1 in 4 businesses don’t make it past their first year,” and it stops me right in my tracks.

If there’s so much information available on how to run and grow a business, why are 25% of them not making it to month 13?

Research has shown that it’s because of money. And not just money on its own but how the business owner manages the money.

When I talk to entrepreneurs about doing their own bookkeeping, the first thing they’ll tell me is that they don’t know what to do. They’re already so slammed with things to do that figuring out bookkeeping — especially when it’s not urgent — falls to the bottom of their priority lists.

But, every single of them, remembers how important it is to keep track of your money riiiight around tax season.

So the problem is NOT that they don’t want to manage their money responsibly — it’s that they don’t know how to.

That’s why I created this one-page resource for you called: Weekly Bookkeeping Checklist for Bosses.

You can check off these tasks once a week and it should take you no more than 30 minutes to do so once you get into the routine.

Download it here to stop worrying about being ready for tax season or if you’re doing what you need to with your money.

You can use it both if you handle your own bookkeeping or if you work with an accountant / bookkeeper already.

Happy Bookkeeping!

If you have questions about how to use it, comment below or send me a message.

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3 Money Reports Smart Entrepreneurs Need to Read Every Month

| Bookkeeping, Business Basics, Finances, Small Business

3 Money Reports Smart Entrepreneurs Need to Read Every Month

You’re finally using a cloud-based bookkeeping software to keep track of your money. While it’s added a lot of ease to your system, it might also be confusing to figure out what you need to pay attention to within the software.

And more importantly, what can you use to help you make financial decisions that help instead of hurt your business?

There are three reports that I think every smart entrepreneur needs to read on a monthly basis.

If you’re allergic to numbers, don’t worry! I’ll make sure you understand what’s most important on each of these reports so you’re only focusing on what matters.

3 Financial Reports to Read Monthly

1) Income Report (Profit and Loss)

Basically, this report gives you an overview of how profitable your business is based on what you’ve earned and what you’ve spent. It represents a period of time, unlike a balance sheet, which shows a specific point in time.

The lines you’ll see on an income report in WaveApps, for example, are:

  • Revenue – How much money came into your business and from what sources
  • Cost of Goods Sold – If you manufacture products, this could be manufacturing costs and labor. If you’re an online business, this is usually merchant fees.
  • Gross Profit (aka Margin) – This is what’s left over after your the cost of your goods sold.
  • Operating Expenses – This is all of your other expenses, like admin, software, travel, etc.
  • Net Profit – How much your business made after expenses

2) Sales tax report

First, in Canada, this is important for businesses that make over $30,000 in a single quarter or within a year, whichever comes first.

Second, sales tax shouldn’t be confused with income tax. It’s like how the tax is included in the price when you buy gas.

The point, though, is that as a small business owner, you are now responsible to give back, or remit, the tax charged on your sales to the government.

This report helps you understand what you owe.

3) Balance Sheet (aka Statement of Financial Position)

This statement answers these two questions:

  • How much does my company OWN?
  • How much does my company OWE?

In short, it gives you a more detailed view into how your business is doing financially at one point in time. It’s typically reviewed at the end of a month, quarter, or year. Or all three. 🙂

On the report, you’ll see:

  • Assets (aka debits) – Value that your company owns, e.g. cash, inventory, etc.
  • Liabilities (aka credits) – What your company owes to others, e.g. mortgage, credit card debt, payment for assets
  • Shareholder equity – Net worth of your company, which is what’s left over after all your debts have been paid

Bonus: Trial Balance Report

This is a bonus since it’s mostly used by bookkeepers and accountants. A trial balance statement gives the current account balance in your bookkeeping, which is used for creating financial reports at the end of the year.

Before we had computers, you’d have to create this first before checking any other reports.

Now, however, it’s primarily used for double checking if your computer program has calculated everything properly.

Its purpose? It makes it easy to see all of your account balances for a specific date. It also helps when switching from one accounting program to another because when starting a new program, you need to enter all the correct balances of each account on the date you switch over.

Your financial reports are only as accurate as your books are organized, so if you’re behind on inputting data or categorizing transactions, your numbers won’t be telling you the truth. If you need help getting your books in order, especially before the busy tax season arrives, click here to get in touch with me. 🙂

Have a question? Leave it in the comments below!

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Save More Money in Your Online Business by Doing This

| Bookkeeping, Finances, Small Business

Save More Money in Your Online Business by Doing This

You’ll hear a lot of advice around making more money in your business, but how often do we talk about the ways we can save more?

Money is a hot-button topic for many people, and they’ll often ignore it until it’s no longer possible to ignore. (Cough, tax season seems to be a popular time to remember to get your money organized.) By doing so, they leave money on the table.

What’s even more unfortunate is that they don’t know how their business is truly performing throughout the year. Income does NOT always equal profit, and they can’t make smart shifts if they don’t know what’s going on financially.

But let me get off my soapbox and get back to how you can save more money in your business. 🙂

Beyond the more obvious solutions of spending less or creating a budget, what else could you do to save money?

I have just one solution for you: Keep your bookkeeping organized.

Accounting and bookkeeping can be boring, I get it. It’s far less exciting than marketing or hosting a retreat for your clients, but it’s 100% necessary.

And since it’s never going away, you might as well get your bookkeeping system in place so it helps you more than it hurts you.

Here are three of my top recommendations for organizing your bookkeeping.

3 Ways to Organize Your Bookkeeping

1) Go digital & jump in the cloud.

Long gone are the days where you had to keep a ledger with paper and pen, so do your business a favor by making sure that everything you spend and earn can be tracked digitally.

This is more than just keeping all of your expenses and income in a spreadsheet. It’s signing up and learning how to use some kind of cloud bookkeeping software, like WaveApps, Xero, or Zoho Books.

Do the same for your receipts. Don’t just leave them in a physical shoebox somewhere. Instead, go for a system that’s already set up to help you succeed, like the digital apps Shoeboxed or Hubdoc.

When you do this, you’re able to generate financial reports that show you how much you’re earning and spending. It also makes tax season so much more doable.

2) Schedule in a weekly “CEO Date”

The only way you’ll ever be able to make wiser financial decisions is by knowing what’s happening money-wise in your business as often as possible.

This is a concept that Lacey Craig mentioned in her Creative Money interview, and it was such a great reminder for everyone who wants to run a profitable business.

Some tasks that you could do during these “dates” are:

  • Checking your account balances
  • Check your pending transactions
  • Check your invoices to see which haven’t been paid
  • Pay yourself

(Not sure how much you should be paying yourself? Read this article.)

By having a CEO date, you keep a finger on the pulse of your finances and can be more proactive when it comes to saving for taxes or knowing exactly what you can afford to invest in.

3) Keep Your Business and Personal Finances Separate

The only way you’re going to be able to see an accurate picture of your business’s financial health is if you keep your business and personal finances separate. I’ve talked about this maaany times before, and it’s something I won’t ever stop saying. Get a business bank account as soon as possible.

When tax season rolls around, you won’t miss any expenses because there were too many irrelevant transactions to sort through. You’ll know exactly where your money went and be able to use those expenses to lower the amount of taxes you owe, thus saving you money.

Bonus: Hire a bookkeeper.

No matter how organized you are, there are going to be things that you won’t know about bookkeeping and what practices could save you money.

So, like so many business coaches recommend, you have to know when to delegate. That’s where bookkeepers, like me, come in.

We help you identify what’s important to pay attention to and take all of the nitty gritty stuff, like manually categorizing transactions, off your already full plate. If you’re interested in talking about what working with me as your bookkeeper might look like, get in touch with me here.

Have questions about how you can organize your bookkeeping? Leave a comment for me below or send me a message at lisa@lsbookkeeping.ca.

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Is Freshbooks Right for Your Business?

| Bookkeeping, Small Business

Is Freshbooks Right for Your Business?

“Client billing first and accounting second.”

That line from the website should give you a good idea of what the Freshbooks software is about.

Beyond being incredibly clear about what they’re best at, they also have a fantastic marketing team, so I’ll bet you heard about them from one of their many sponsors, like Being Boss, or from your favorite life coach.

Personally, I heard about it when I was looking for a recurring billing feature for my clients.

If you’re in the market for software, consider Freshbooks and then check out Xero, WaveApps, Kashoo, and Zoho Books, too.

Overview of Freshbooks

The first thing I want you to know about Freshbooks is that it’s not for everyone, and it’s not trying to be for everyone, which is its strength. Think of it as an add-on to a more powerful accounting and bookkeeping system.

In other words, it fills in the gaps that the big, robust tools don’t address, like automatic recurring billing.

And it’s a product made for service-based businesses, like coaches, copywriters, or designers, that, in the words of Freshbooks, “focuses on slaying the billing beast.”

Like all of the other tools I’ve reviewed, it’s cloud-based, which means that it’s online and all of your information is kept on the Internet as opposed to your computer. Expect to pay a monthly subscription between $15 and $50.

Is it easy to learn?

Since it’s made for people who are service-based (and many who consider themselves solopreneurs), the navigation is intuitive with many people saying that they created their first invoice as soon as they signed up.

Freshbooks is a growing company as well, so expect updates, which always means new features to learn and an updated interface to navigate.

What are the downsides?

There are a few downsides to using Freshbooks as a small business owner, and I’m going to break them down into two categories: light accounting and easy to forget to stop recurring billing,

1) Not standalone accounting software – Since the accounting features are so light with Freshbooks, it can’t be considered a standalone accounting software. That means you’ll have to pair it with something more robust like Wave (free), Xero (paid), Kashoo (paid), or Zoho Books (paid).

2) Easy to forget to stop recurring billing – While it’s very easy to delete a previous client’s profile to take them off auto-billing, it’s even easier to forget to do it if you’re not organized.

Why should I use it?

1) Automatic recurring billing – If you have clients you bill the same amount on a recurring basis, this feature will streamline payment. At whatever interval you choose, your client will be billed for the amount you both agreed on.

2) Can get by on your own without a professional – Since the software is so intuitive and made for service-providers, it’s easy enough to learn and get by on your own without an accountant or bookkeeper guiding the way.

3) Easily accessible library of information – If you’re confused, you have plenty of options for getting an answer with Freshbooks’

4) Contractor collaboration – There is also a light project management system you can use within Freshbooks for communicating with your contractors and tracking the time you spend on client projects. This helps you keep everything organized and ensures that your invoices are accurate.

Quick rundown of Freshbooks

  • Started doing business in: 2003
  • Based in: Toronto
  • Cost: Paid monthly subscription ($15 – $50)
  • Free trial: 30 days
    Credit card processing fees (via Stripe): For VISA/ MC: 2.9% of the transaction total + $0.30. For AMEX: 3.5% of the transaction total + $0.30
  • Automatic billing: Yes
  • Payroll available: No
  • Multicurrency: Yes
  • PayPal payment option: Yes
  • Etsy connection: Yes
  • Shoeboxed connection: No
  • Customized invoices: Yes
  • Mobile app: Yes
  • Option to collaborate with team members: Yes
  • Customer service: Email, chat, and phone

Still have questions about whether or not Freshbooks is right for you? Leave a comment below or send me a message.

 

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Is Kashoo Right for Your Business?

| Bookkeeping, Small Business

Is Kashoo Right for Your Business?

“Easy accounting software without the frustration.”

Kashoo knows that its biggest competitor is Quickbooks, which is why they mention it right on the homepage. You can do all of these things that you need… without using a complicated software like Quickbooks.

Now personally, I don’t use Quickbooks with my clients. I’m not saying that I’m against using the software. It’s just not my favorite.

So what makes Kashoo different, and are they telling the truth? Is it really easier to use?

Overview of Kashoo

Is Kashoo Right for Your Business?

Like the others, Kashoo is an online cloud-based accounting software, which means that it’s online and all of your information is kept on the Internet as opposed to your computer.

It’s one of those companies that make sure they infuse personality into their brand. This alone sets them apart from the competition.

Beyond that, they differ from tools like Xero, Freshbooks, WaveApps, and Zoho Books because their dashboard does not show the most recent financial information. Instead, when you login, you’ll be able to immediately input expenses / income not recorded from your connected bank accounts.

Expect to pay one monthly fee of $19.95, or you can pay annually for a discount.

Is it easy to learn?

Kashoo prides itself on being easy to setup and to learn.

They claim to have removed all accounting jargon, and they focus on the basics, like inputting expenses and income, sending invoices, and keeping track of project costs.

The reports feature is also very light, which may be a relief to some entrepreneurs but a burden to their accountants and bookkeepers. And something technical, but still important, to note. Kashoo only offers accrual accounting and not cash-based. What that means is that if you don’t know how your books are currently organized, ask an accountant to be sure.

Reports included are:

  • Income Statement
  • Unpaid Invoices
  • Unpaid Bills
  • Trial Balance
  • Balance Sheet
  • General Ledger
  • All Transactions
  • History

What are the downsides?

There are a few downsides to using Kashoo as a small business owner, and I’m going to break them down into three categories: no inventory and purchase ordering, inability to make estimates, and limited use of mobile app with multicurrency.

1) No inventory / purchase ordering – Unlike Zoho Books or Xero, you can’t keep track of how much of each item you have or request to purchase an item when its stock is low.

2) Can’t make estimates – Some agencies and freelancers need estimates to complete proposals. If that’s a big part of your business model, I would stay away from Kashoo and consider Zoho Books instead.

3) Can’t use iOs apps with multicurrency enabled – While Kashoo offers multicurrency, you can’t use your iPhone / iPad app when it’s enabled. Who knows why? It’s probably a glitch that will be fixed in the future.

Why should I use it?

1) Easy setup – You’ll be able to navigate the dashboard to set up your account and start sending invoices with Kashoo’s guided tutorial service.

2) Can get by on your own without a professional – Since the software is so intuitive and made for service-providers, it’s easy enough to learn and get by on your own without an accountant or bookkeeper guiding the way.

3) Track project costs and keeps records of clients / suppliers – If you’re a freelancer who needs to track your time along with project costs, this software could be great for keeping you organized. Plus, you can keep record of any clients or suppliers that you have.

4) Great customer service – Support is “forever-free,” and you can get a hold of the team by email, social media, chat, or phone. They also have fantastic resources for learning how to use Kashoo, like Kashoo U and these guides for how to get started.

Quick rundown of Kashoo

Started doing business in: 2008

Based in: Vancouver, BC, Canada

Cost: Paid monthly subscription ($19.95)

Free trial: 14 days
Credit card processing fees (via Stripe, BluePay, and Square): 2.9% + 30 cents

Automatic billing: No

Payroll available: No (but integrates with SurePayroll)

Multicurrency: Yes (but can’t use iOs apps)

PayPal payment option: No

Etsy connection: No

Shoeboxed connection: No

Customized invoices: Yes (but limited fonts and colors)

Mobile app: Yes

Option to collaborate with team members: Yes

Customer service: Email, chat, and phone

Still have questions about whether or not Kashoo is right for you? Leave a comment below or send me a message.

 

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Is Zoho Books Right for Your Business?

| Bookkeeping, Small Business

 Is Zoho Books Right for Your Business?

Have you heard of Zoho? If you have, it’s most likely that you’ve heard of it for it’s customer relationship management software. But what you might not know is that the company has also created a suite of other products that revolve around finance.

Thanks to a client, Zoho Books came onto my radar. Seeing as I always like to learn new tools and experiment, I gave it a try. And while it’s still fairly new to me, I’m liking what I see (from a bookkeeper’s perspective obviously).

However, I thought that it could be beneficial to help you choose between the variety of softwares out there on the market, so I’ve put together this quick review on my experience with Zoho Books.

If you’re in the market for software, consider Zoho Books and then check out Xero, WaveApps, Kashoo, and Freshbooks, too.

Overview of Zoho Books  

 Is Zoho Books Right for Your Business?Zoho Books is a flexible accounting software that, in my opinion, is best suited for agencies or business owners who have complex client projects, like a web designer. It’s different than other software because it has a higher focus on the client with features like a client portal and automation rules.

It’s cloud-based, which means that it’s online and all of your information is kept on the Internet as opposed to your computer. And you’ll pay a monthly subscription between $9 and $29.

Is it easy to learn?

It depends. If you’re coming from a purely paper-based accounting system, it’s going to take some time to get everything into the software. That being said, Zoho offers a comprehensive tutorial to get you started that’s available to you as soon as you sign up. Plus, their customer service is available 24/7 via email, chat, and phone if you run into any problems.

But, what’s interesting about this software is that it goes beyond simple bookkeeping and accounting with offering basic inventory, project management, workflow automation, and client portal options. While those extra options give you more possibilities as a business owner, it can also be overwhelming.

My suggestion if you decide to move forward with Zoho is to start with what you came for — bookkeeping and accounting — and eventually move into the other features.

If you’re working with a professional accountant or bookkeeper, they’ll also be able to access the software and help you set it up, so that will take some of the work off your plate.

 Is Zoho Books Right for Your Business?

What are the downsides?

There are a few downsides to using Zoho Books as a small business owner, and I’m going to break them down into four categories: very few advisors, no recurring billing, no balance sheet or income statement reports, limited third-party connections.

1) Very few advisors – While Zoho Books is competing with other software, like Xero and Wave, with its features, it’s limited by the number of advisors it has. That means if you decide to use it, your choices of hiring someone who knows how to expertly navigate and make the most of it are limited.

2) No recurring billing – If you’re invoicing many different clients the same amount each month, you don’t have the option to charge their cards automatically. While Zoho Books will duplicate the previous month’s invoice and send it, the client will still have to enter their credit card information to pay it.

3) No balance sheet or income statement reports – While they offer many reports (listed below), balance sheet and income statement reports aren’t offered. This might make your accountant or bookkeeper sad.

Included reports:

  • Estimates
  • Invoices
  • recurring invoices
  • Bills
  • credit notes
  • retainer invoices
  • Purchase orders (not included on the Standard subscription)
  • Sales orders (not included on the Standard subscription)

4) Limited third-party connections – If you’re a maker and you sell on a platform like Etsy, this software is not the one for you. Because Zoho has many other in-house integrations — CRM, Expense, Reports, Inventory, etc. — it hasn’t linked up with third-party connections like Etsy or Freshbooks, which makes it difficult if your business already uses those.

Why should I use it?

1) Focus on the client – Like I mentioned earlier, Zoho includes unique features that directly benefit your client. Beyond recognizing them with a quick “thank you” courtesy of your workflow automation rules, each client can login to their own “portal” where they can do things like manage invoices and view transactions. You would also be able to schedule reports to send to them or your team members on a recurring basis, which could be great for keeping track of project progress.

2) Basic inventory and project management – If you’re scaling your business and managing many projects and team members, Zoho has a basic project management feature that allows you to manually log time on projects and use a widget timer while you’re working. Plus, if you’re a business that manages inventory, Zoho will help you keep track of quantities and alert you when you need to make repurchase orders.

3) Workflow automation rules – One of the neatest things about Zoho Books is that you can set up “rules” to automate your workflow. For example, let’s say that your client pays an invoice. As soon as the invoice is paid, you can have a “thank you” email sent to your client. Internally, this works out for you, too. You can set up “bank rules,” so that each time a specific transaction is synced, it will be automatically sorted into the correct category. If you like Xero but also like this feature, you’re in luck. Xero offers it, too. 🙂

4) Easily accessible library of information – If you have a question about how to use the software, you have plenty of places to turn. Beyond 24/7 email, chat, and phone customer service, there is also a community forum, a lengthy documentation section, and video tutorials.

 Is Zoho Books Right for Your Business?

Quick rundown of Zoho Books

  • Started doing business in: 2011
  • Cost: Paid monthly subscription ($9 – $29)
  • Free trial: 14 days
    Credit card processing fees: Charged the processing fee of whichever payment provider you use – Stripe, Authorize.net, Braintree, 2 Checkout, Square, and ACH Payments
  • Automatic billing: No
  • Payroll available: No
  • Multicurrency: Yes
  • PayPal payment option: Yes
  • Etsy connection: No
  • Shoeboxed connection: No
  • Customized invoices: Yes
  • Mobile app: Yes
  • Option to collaborate with team members: Yes
  • Customer service: Email, chat, and phone

Still have questions about whether or not Zoho Books is right for you? Leave a comment below or send me a message.

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Is Xero Right for Your Business?

| Bookkeeping, Small Business

Is Xero Right for Your Business?

Xero believes in giving you — the small business owner — the power to plan ahead with your finances.

And truth to be told, I’m completely biased. (I liked the software so much I became a Xero-certified bookkeeper!)

If you’re in the market for software, consider Xero and then check out WaveApps, Zoho, Kashoo, and Freshbooks, too.

Overview of Xero

Xero is a robust accounting software that entrepreneurs can use by paying a monthly subscription between $9 and $70. It’s cloud-based, which means that it’s online and all of your information is kept on the Internet as opposed to your computer.

Is it easy to learn?

Since Xero is so robust, it’s not the easiest of software to get up and running. In fact, I recommend that you use it with a professional accountant or bookkeeper. If you’re looking for accounting software that’s free and easier to learn, check out WaveApps.

That being said, it can be easily navigated once your accountant or bookkeeper is keeping everything organized. You’ll be able to see your cashflow in real time, which allows you to make smart financial decisions, check reports to see if you’re on track with your revenue goals and send beautiful quotes to potential clients.

What are the downsides?

There are a few downsides to using Xero as a small business owner, and I’m going to break them down into three categories: limited multicurrency options, no recurring billing, and accounting jargon.

1) Limited multicurrency option – Unless you choose the most expensive subscription ($70/month), you won’t be able to receive or invoice using foreign currency, which makes doing business with people outside of your country really difficult. So if you’re a solopreneur who needs under 5 invoices but needs multicurrency, you still have to choose the most expensive option.

2) No recurring billing – If you’re invoicing many different clients the same amount each month, you don’t have the option to charge their cards automatically. While Xero will duplicate the previous month’s invoice and send it, the client will still have to enter their credit card information to pay it.

3) Accountant jargon – This software, like many of the others on the market, is made with accountants and bookkeepers in mind. That means that a lot of the feature I love about it (old-school style, journal-based bookkeeping) are things that won’t matter much to you. It also means that you’ll have a more difficult time navigating the software and being able to make the most of its features. It’s best used with a professional.

Why should I use it?

1) Better than a spreadsheet – While Xero isn’t perfect, it’s also a major step up from spreadsheet-style bookkeeping. That means tax time will be easier to manage because everything has already been captured and recorded.

2) Easily accessible and useful reports – The reports are one of my favorite features of Xero.

3) Constant updates and great customer service – Xero knows the value of listening to its customers. As a result, they’re always rolling out new features, fixing technical bugs, and generally making the software more beautiful and easier to use. Plus, if you do encounter problems, the customer service is fast and at your disposal 24/7 for free. They’ll get back to you almost immediately and explain how to solve whatever problem you’re facing with patience.

4) Openly available information – While this software is made for accountants and bookkeepers, Xero still offers a lot of information for the DIY entrepreneur. You can find tutorials in dedicated training, articles, videos, and their handy-dandy accounting glossary.

5) Able to track inventory – This is a built-in feature that’s great for business owners who sell physical products, like t-shirts.

Quick rundown of Xero

  • Started doing business in: 2006
  • Based in: New Zealand
  • Cost: Paid monthly subscription ($9 – $70)
  • Free trial: 30 days
    Credit card processing fees (via Stripe): %2.9 + 30 cents
  • Automatic billing: No
  • Payroll available: Yes (includes features like built-in timesheets, employee leave, and reimbursement of expenses)
  • Multicurrency: Yes
  • PayPal payment option: Yes
  • Etsy connection: No (only through 3rd party applications)
  • Shoeboxed connection: Yes
  • Freshbooks connection: No
  • Customized invoices: Yes
  • Mobile app: Yes (There are separate apps for Invoices / Receipts / Payroll)
  • Option to collaborate with team members: Yes

Still have questions about whether or not Xero is right for you? Leave a comment below or send me a message.

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Is WaveApps Right for Your Business?

| Bookkeeping, Finances, Small Business

Is WaveApps Right for Your Business?

So you’ve heard of WaveApps, the accounting software, and now you’re wondering what all of the fuss is about. Is it really comparable to other software like Xero, Freshbooks, or Zoho?

And, as a small business owner, how is it going to make your life easier, if at all?

Before I tell you about WaveApps, I want to remind you that no software is perfect and that many of the suggestions I give are going to be made for accountants and bookkeepers. So they take time to learn.

What’s most important is that you choose one that fits for the size of your business and the type of work you do.

Also, any cloud-based software you choose is going to be a step up from the standard spreadsheet-style bookkeeping.

Overview of WaveApps

WaveApps is free accounting software. It’s cloud-based, which means that it’s online and all of your information is kept on the Internet as opposed to your computer.

It’s free (no, really) and was made primarily for small business owners, consultants, and freelancers. While that price tag can be very kind to your bank account, it also means that you give up features that other software, like Xero or Freshbooks, provide. You’ll see these in the section below about the downsides.

Is it easy to learn?

Yep, Wave is one of the easiest cloud-based software to learn. When you sign up for an account, you’ll be prompted to connect your bank accounts (including PayPal) and credit cards. It works even if you have international bank connections or use a foreign currency.

After connecting your accounts, you’ll be able to track your income and expenses, send invoices, and read reports to see a bigger picture of your money.

You can access reports for:

  • Financial – Balance Sheet and Income Statement
  • Taxes – Sales Tax and Payroll Wage (paid feature) and Tax Report
  • Customer – Income by Customer and Aged Receivables (how much money is coming in and how long you’ve been waiting for it)
  • Vendors – Expense by Vendor and Aged Payables (which expenses you haven’t paid yet and how long overdue they are)
  • Other – General Ledger (similar to a general overview all of your accounts), Account Transactions, Trial Balance (can see all account balances), Gain / Loss on Foreign Currency Exchange

You can customize all of the reports by date.

What are the downsides?

There are a few downsides to using WaveApps as a small business owner, and I’m going to break them down into three categories: accountant jargon, technical bugs, and Etsy sales.

1) Accountant jargon – To be fair, Wave does a great job of always trying to make things easier for small business owners who aren’t accountants. That being said, there is still a lot of jargon that an entrepreneur would have to learn to be able to make the most of the software. What’s more, if you’re not familiar with how your books should be kept, you often won’t know if there’s a bug or if something isn’t being properly recorded. Mishaps like that could lead to you paying more than you owe in taxes or making decisions based on false information.

2) Technical Bugs – Since it’s a free software, identifying and fixing technical bugs takes a bit longer (2+ days). What do I mean by technical bugs? One I encounter regularly goes like this. Let’s say your balance sheet says there is $100 in your bank account. But when you go to the Transactions screen, you have $90. You then go check the balance of your account, and it’s also $90. That means that somewhere in all your transactions, there’s a mystery $10 difference. In other words, you have a “ghost transaction” that you now have to sift through and find. Even as a trained bookkeeper, transactions like these can take me 1-2 hours to find. Not the best way to spend your Wednesday, right?  

3) Etsy Sales – If you sell on Etsy, you’re able to collect sales through Wave, which is great. However, since you’re also connected to PayPal, those sales will be recorded twice. That means your sales numbers will be misleading unless you go through and manually merge the two transactions. That’s also a time suck.

Why should I use it?

1) Better than a spreadsheet – While Wave isn’t perfect, it’s also a major step up from spreadsheet-style bookkeeping. That means tax time will be easier to manage because everything has already been captured and recorded.

2) Free and easy to set up – It’s free and setup is painless, which is great for any entrepreneur who is bootstrapping her business. That being said, it also allows room for growth by giving you the option to invite your accountant, bookkeeper, or team member into the software.

3) Responsive customer service – The customer service is really responsive and attentive. If you’re confused about why your numbers are wrong or how to get rid of duplicate transactions, you can open up a chat box from directly within the software and be connected to someone.

4) Easy to learn – Much of the software, like looking at transactions and invoicing, is going to feel intuitive if you’re tech savvy. If you encounter something tricky or want to learn how to use the software to its fullest potential, there is plenty of information available. You can start with a free series of articles called Wave University.

5) Multicurrency option – With most accounting software, multicurrency is either unavailable or an add-on for a higher-priced subscription. WIth Wave, though, you can invoice and receive funds in any currency, which makes it a lot easier to do business with clients abroad without worrying about the exchange rate.

6) Can save credit card information of clients – Clients can choose to save their credit card information so that each time you invoice them, all they have to do is click “Pay Invoice.”

Quick rundown of WaveApps

  • Started doing business in: 2010
  • Based in: Toronto, Canada
  • Cost: Free
  • Credit card processing fees: %2.9 + 30 cents (varies for non-Canadian / non-US countries)
  • Automatic billing: No
  • Payroll available: Yes ($15 + $4 per employee in the US)
  • Multicurrency: Yes
  • PayPal payment option: No
  • Etsy connection: Yes
  • Shoeboxed connection: Yes
  • Freshbooks connection: No
  • Customized invoices: Yes
  • Mobile app: Yes
  • Option to collaborate with team members: Yes

Still have questions about whether or not Wave is right for you? Leave a comment below or send me a message.

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Why Entrepreneurs Should Stop Using Spreadsheets for Bookkeeping

| Bookkeeping, Business Basics, Small Business

Why Entrepreneurs Should Stop Using Spreadsheets for Bookkeeping

If you’re still using a spreadsheet for your business’ bookkeeping, we need to have a heart to heart.

I’m guessing that if you’re still using them, it’s either because:

A) You don’t know other options.

B) You can’t choose between the other options.

But here’s the problem. When you use a spreadsheet, bookkeeping has a tendency to take over the important stuff that keeps your business running, like bringing in new sources of revenue or marketing.

Here’s what I believe: bookkeeping should NOT take over your business tasks.

I know this isn’t news to you. Your spreadsheet has been clunky, constantly out of date, and often difficult for you to understand.

And when you don’t understand what you’re seeing, making smart financial decisions becomes a whole lot more difficult and making realistic goals feels impossible.

So what should you do instead?

That’s why the next best move for your business is to choose and sign up for a cloud-based accounting software.

I know that sounds kind of intimidating. But really, depending on which one you choose, the transition can be smooth, and you’re going to LOVE all the time you save.

Let me make the difference between a spreadsheet and online accounting software clearer by talking about something we all love: food.

When you cut a carrot, you can use a knife and cut one slice at a time. It will take a bit of time (especially if you AREN’T Gordon Ramsey).

Or your other option is to invest in a food processor, which will cut your carrot into little pieces in seconds.

The food processor is like your accounting tools, it gets the job done faster and more efficiently. Plus, you were probably able to chop more carrots in the same amount of time.

Remember, no software is perfect

As a bookkeeper, I see accounting software in a different light, and I read a lot of comments that look something like this, “I hate XYZ software. It’s so confusing and so hard to use. I want to find a new one. Any suggestions?”

I want to make sure you know that no software is perfect and that many of the suggestions I give are going to be made for accountants and bookkeepers, so they take the time to learn. What’s most important is that you choose one that fits the size of your business and the type of work you do.

Also, any cloud-based software you choose is going to be a step up from the standard spreadsheet-style bookkeeping.

I know that making the decision to move from spreadsheet to online can feel like a lot of work, so I’m going to go over my favorite accounting tools that help me and my clients with bookkeeping tasks.

These are:

  • Xero
  • Zoho Books
  • WaveApps
  • Freshbooks
  • Kashoo

These tools will help you streamline your business when it comes to sending invoices, accepting payments, tracking income and expenses, and managing your cashflow among so many other benefits.

We’ll talk about who each software is most suited for, the cost, benefits, and disadvantages.

Each requires a different process for making the move from a spreadsheet (or paper and pen) to online bookkeeping, and I love them because they all have a fantastic library of resources and responsive customer service. So, no matter which you choose, they’ll take care of you. 🙂

If you have questions you definitely want me to address or a specific software that you’ve been thinking about, leave me a comment below so I can make sure to cover it.

 

 

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Take Control of Your Finances: Training

| Bookkeeping, Budget, Finances, Personal, Small Business, Tutorial

Congratulations!

You’ve made it to the final step of taking control of your finances! If I could, I would definitely give you a big hug (I was going to say pop a bottle of champagne, but alcohol is usually one of the things people can trim).

If you’ve been following along, you’ve done the first three steps in the process of finding financial prosperity:

  1. Tracking
  2. Targeting
  3. Trimming

Now we can move onto the last step: Training.

Now that you know where your money goes, what your financial goals are, and how you’re going to get yourself there, it’s important to keep up the work.

It’s so easy to be tempted to go back to your old ways. But, unlike the proverb suggests, you can absolutely teach an old dog new tricks.

Treat it like going to the gym to maintain your physical health. You want to do the same and keep up your financial health.

Let’s discuss ways to maintain your financial fitness.

How to Maintain Financial Fitness

There are a number of ways to do this, and I think the simplest one is to keep learning.

Read financial books, watch videos, or even hire a bookkeeper (like me!).

By reading about financial matters in books and articles online and by continuing to keep up with your finances, you can make it a part of your everyday life and make it easier to maintain.

Financial health is a lifelong process and one you should continue to keep up.

Most importantly, think about paying it forward. Don’t keep your newfound financial knowledge to yourself!

Teach your kids, neighbors, or coworkers about finances. Make recommendations to others on how to get more information regarding money and how you got your finances in order.

For example, in my house, I teach my kids the value of money by opening their own savings accounts.

They have to decide how much to save and when they want to buy something they have to count their money to see if they can afford it.

Resources Recommendations

Here are some resource recommendations:

Books

Websites

Facebook Groups

Podcasts

Money Coach

Bookkeeper

If you get stuck, I’m here to help. You can ask me questions directly on my Facebook page. 

Keep up the good work!

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