Suggestions for keeping track of business expenses?

June 30, 2004 8:18 AM

Suggestions for keeping track of business expenses? I'm starting a business and I'm terrible at math. I would prefer something that's like a spreadsheet kind of, something I could plug numbers into and have the program lay it out nice and easy for me. I'm not very experienced in Excel - is there anything easier (and preferably free/cheap) out there for me?
posted by agregoli to Work & Money (28 answers total)

I think you might be better off in the long run ponying up eighty bucks for a copy of Quicken or MYOB or something of its ilk. I can't imagine you could homebrew something as dependable in less-than-eighty-dollars-worth of your time.

Plus you have the benefit of having all your data in a standard format come tax time, which in and of itself is worth a lot.
posted by bcwinters at 8:31 AM on June 30, 2004

(Small thread hi-jack: is it really difficult to learn how to plug expenses into Excel? I need to learn how to do this on my own for a contract job next Wednesday, and I thought it would be a piece of cake. Am I wrong?)
posted by Zosia Blue at 8:51 AM on June 30, 2004

Response by poster: Is Quicken easy to use? I'm just scared I'll get something and have it be useless cause I won't be able to manipulate it.
posted by agregoli at 9:01 AM on June 30, 2004

Well, if it's too hard, maybe you should hire an accountant. Or choose a less complex business to run.
posted by sad_otter at 9:08 AM on June 30, 2004

maybe I don't have as many expenses as you, but for years, the way I've done it is, for the little items, I keep an accordian binder, with sections for the months, in the door of my car, where I put receipts when I leave the store. For the bigger items, I purchase it using a credit card that I use for nothing but business expenses... having that credit card account accesible through the net has made it even easier. Come tax time, I empty the binder, and round up the credit card receipts, and I'm good to go.

I tried using my palm pilot with spreadsheet software to keep track of it, but I guess I'm just not organized enough. However, I do keep track of my receivables with it, noting the account, the check number and the amount paid. That's worked out ok.
posted by crunchland at 9:11 AM on June 30, 2004

Response by poster: sad_otter, I'm afraid your comment isn't very helpful. I can't hire an accountant, as I can't afford that. And I'd still have to keep track of expenses to give the accountant something to work with. As for choosing a less complex business? It's about as simple as I can make it, and I'm doing what I want to do, not "choosing" a business for the sake of starting one.
posted by agregoli at 9:17 AM on June 30, 2004

Quicken is easy to use. It also works with TurboTax, which could help at tax time if you're doing your own.

GnuCash is a free Quicken workalike for Mac OS X or Linux, but isn't available for Windows.
posted by Zed_Lopez at 9:24 AM on June 30, 2004

No, sad_otter's comment is right on the (proverbial) money. If you want to have your own business, you have to learn how to deal with all the annoying stuff. There is no shortcut for thing like this. Business expenses need to be anally recorded, because they need to be reported come tax time.

Suck it up and buy Quicken. If that's too complicated for you to deal with, you need to hire someone to handle that task for you or not be in business for yourself.
posted by mkultra at 9:28 AM on June 30, 2004

yup...Quicken or Quickbooks--very easy.
posted by amberglow at 9:30 AM on June 30, 2004

Microsoft offers a free 60-day trial of Money 2004 Deluxe, which I think might be the "home" version. There is a chart showing the differences between the different versions, and depending on what you need you might be able to get by with a cheaper version than the "small business" one.

Yeah, yeah, Micro$oft is evil, etc., but this program could really save you a lot of headaches, especially around tax time. You may want to play around with the free version to get a feel for how easy it is to use. This isn't necessarily an endorsement of Money over Quicken or any other programs; I think all of these programs have become much more powerful and easy to use over the years. YMMV.
posted by arco at 9:31 AM on June 30, 2004

I second Quicken. It is easy to get going and once you are comfortable with the software, it becomes apparent that they worked hard to streamline data input--because that's exactly what this is all about.

Quicken lets you set up as many "accounts" as you like. You can have checking, savings, credit card, etc, etc, etc.

For transactions, you can specify a category to describe the transaction (office supplies, dining, etc).

What I did was set up a checking account for company and paid for nearly every company expense out of that account. If I wrote a check, I entered it and made sure the category was filled in.

I also created a company "cash" account. In that account, I put all cash transactions. Whenever I bought something for the company in cash, I stapled it into my day planner on the date of purchase. Then once a week, I went through my day planner and entered all the case transactions.

I also created an account for my truck. I wrote down the mileage in my day planner, and once a week I went through the day planner and entered miles into that account (each mile was a dollar, a fraction of a mile cents).

Come tax time, I created reports in Quicken based on transaction type (computer hardware, software, office supplies, furniture, rent, heat, power, miles), which made handling taxes way easier.

By the way, the first expense that should go into your company account is "Quicken" for "software".
posted by plinth at 9:38 AM on June 30, 2004

Response by poster: Sorry if that sounded snarky. Thanks anyway.

I guess I'll look at Quicken and see if it's feasible.
posted by agregoli at 9:53 AM on June 30, 2004

Response by poster: mkultra - no need to be rude. I was only asking for a simple program to help me with a complex task I know I need to do, something many people do on AskMeFi. Save the snark.
posted by agregoli at 9:58 AM on June 30, 2004

to help me with a complex task I know I need to do

No, this is a basic function of being in business for yourself. That path is hard. Trust me, I've been there.

This is an undeniable truth- if you can't handle the basic task of tracking your expenses, your business is going to fail. Don't cry because you didn't get the easy answer you were expecting. It's not a snark, it's honesty.
posted by mkultra at 10:50 AM on June 30, 2004

Response by poster: Duh, it's a basic function. I just said that. Something I have to do in order to run the business. I was asking for a program to help me do that. No big deal.

I didn't cry because I didn't get the easy answer - I was asking about software, for heaven's sake. Take your rude and unhelpful comments elsewhere.
posted by agregoli at 11:20 AM on June 30, 2004

agregoli -

For what it's worth, I completely agree with you. Asking the question of whether a Money/Quicken/Quickbooks clone exists is entirely reasonable. I've considered asking it myself. I don't use staroffice, but plenty of people get by on it just fine, and I always wondered if there was an equivalent money management product..

mkultra - and to a lesser extent, sad_otter - you're incredibly rude. Why is it a bad idea for agregoli to try to find an inexpensive or free solution at first so as to preserve capital for the short term? I suppose you think s/he should also just go out and buy a mainframe, a warehouse and a fleet of trucks now, right? Information management, storage and distribution are, after all, essential to many businesses.

I have a feeling you think you were being helpful in a folksy, homespun, tell-it-like-it-is way, but it came out in condescending-asshole-ese.
posted by Sinner at 12:31 PM on June 30, 2004

I too am terrible at math. If I were in your shoes, I would run, not walk, to the nearest adult education/night school class in accounting, and learn all that I could. It might be kind of fun, you'll gain some confidence, and some understanding of which programs best suit your needs.
posted by iconomy at 12:48 PM on June 30, 2004

mkultra ... you're incredibly rude

No, THIS is rude: Who the fuck asked you?

I have a feeling you think you were being helpful in a folksy, homespun, tell-it-like-it-is way, but it came out in condescending-asshole-ese.

Yeah, well, the IRS isn't going to be any friendlier. She asked a question, I gave an honest answer, grounded in personal experience.

And, FWIW, the question was not for a free alternative to Excel, but something easier. Want to go into business for yourself? Great. Do your homework. Learn Excel.
posted by mkultra at 1:01 PM on June 30, 2004

This is an undeniable truth- if you can't handle the basic task of tracking your expenses, your business is going to fail. Don't cry because you didn't get the easy answer you were expecting. It's not a snark, it's honesty. (1)

1. There is no truth in what you call undeniable. There is an entire industry of software and services that make doing this require little to no knowledge of finance.
2. This isn't a playground. Telling someone "don't cry" when there is no evidence of crying is insincere and childish.
3. The author of the question was looking for software. You told the author to "Suck it up and buy Quicken". That's not an answer, it's an uncalled for jab. All you had to do is say, "I'd recommend purchasing Quicken and take the time to learn how to use it."
4. You may have good intent, but your tone and delivery are not helpful.

Quicken is by far the easiest thing to do your small business finances in. However, depending on how you do your taxes, the software can get expensive. I use Quicken and TaxCut which is considerably cheaper. Quicken has tiered pricing based upon the target market. Small business owners and the self employed typically need the highest price software. Quickbooks is more complex and more expensive, but it's much more flexible. In time, you may find you need it, but you should be able to start in Quicken.

I recommend you speak with a CPA once when you start your business. Tell them about your business and a bit about what you expect. They can advise you on how to manage your finances in regards to what would benefit you most in terms of taxes. After the first visit, you may be able to get away with simply filing everything into a folder and making quarterly or yearly visits to a CPA.

A CPA is probably the simplest educational tool and they don't charge outrageous prices for the first consultation. The CPA I used didn't charge me a penny for the first visit and I walked away with enough information to do my finances myself.

Who the fuck asked you?

agregoli asked.

Yeah, well, the IRS isn't going to be any friendlier. She asked a question, I gave an honest answer, grounded in personal experience.

The chance of someone getting picked on by the IRS is slim. However, if you do get audited, having a CPA is a good thing, as they will work with you on the audit. And from my personal experience, the IRS is typically friendly, though overworked. Things only get nasty if you get caught for fraud or non-payment.

And, FWIW, the question was not for a free alternative to Excel, but something easier. Want to go into business for yourself? Great. Do your homework. Learn Excel.

And, FWIW, the way you delivered your answer made you sound like an insincere jerk. I'm in business for myself, have done my homework and can tell you quite honestly, I don't use Excel for finances. At best, your advice is disingenuous.

As for why I don't use Excel, it's the wrong tool for the job. I'm self employed and there are numerous tools out there that make it easier. This coming from someone who has been using Excel since 1995 when Office 95 was on 1.44 mb floppies. I have been using spreadsheets since the early 80s, but the convenience of doing it in another application saves me time, headache and rules out a lot of errors.
posted by sequential at 1:51 PM on June 30, 2004

agregoli: There's an organization called SCORE (service corps of retired executives), and it appears they have a chapter in your area based on the zip in your profile. I briefly toyed with the idea of starting a business and met with them, and would cautiously recommend them (the person we met with was a dud). Give them a call and see if they can find someone to help you out. Even if the retired exec they pair you up with isn't your soulmate, they probably have some idea of where you could go to get the training and/or info you need. Their advice is free and someone there can probably tell you a lot about starting your own business.
posted by alphanerd at 2:05 PM on June 30, 2004

I have a copy of "Quicken 2001 Home and Business" you're welcome to if you want it. I switched over to Mac so it's no use to me. You'd just have to paypal me $3 for postage. I don't have a manual but if I remember correctly, there's a PDF of it on the CD-Rom.

Yeah, it's 2001 and we're in 2004, but it does the exact same thing, maybe minus internet banking. If you want it, send an email to the address in my profile.
posted by dobbs at 2:30 PM on June 30, 2004

A variety of things have changed from 2001 to 2004. Most notably, every year Intuit integrates more cross product marketing into Quicken. They sell you relevant services while teaching you how to use the product. On the other hand, the basics have not changed all that much other than some UI improvements. If you ever decide to upgrade, you can likely get a discount for owning the 2001 version.

(On the other hand, Quicken for the Mac 2004, from the perspective of a PC Quicken user, was the sorriest excuse for the same program on a different platform I have experienced.)
posted by sequential at 2:37 PM on June 30, 2004

And, FWIW, the way you delivered your answer made you sound like an insincere jerk.

I think you mean "insensitive". mkultra's comments certainly seem sincere to me.

Excel and Quicken are both good choices. Excel is good if you want to understand the underlying details of accounting, and maybe do some forecasting. Quicken is good if you need more guidance. If/when your business is profitable enough, you need to hire a professional accountant. Many companies provide "outsourced" accounting services, so you don't actually need to increase your headcount.

The chance of someone getting picked on by the IRS is slim

Even if true, this is EXTREMELY BAD ADVICE. If you ignore the IRS, one of two things will happen: (1) your business will be so sloppy that you will be unable to maintain it for more than a few months. (2) your illegal business will grow so quickly the IRS will notice you, and take it away from you. And probably throw you in jail too.

Use Legal/Medical/Accounting advice found at Metafilter at your own risk!
posted by Kwantsar at 3:30 PM on June 30, 2004

I think you mean "insensitive". mkultra's comments certainly seem sincere to me.

They didn't seem sincere in the least bit to me. Telling someone to "suck it up" is not genuine. Saying things like "No, THIS is rude: Who the fuck asked you?" is not without pretense.

Even if true, this is EXTREMELY BAD ADVICE.

Since when is it bad advice to tell someone to use a CPA for the purpose of protecting themselves in case of an audit? Even tax preparer at Sears, who does not specifically have to be a CPA, has to sign your tax returns stating the information they filled out is accurate. In case of an audit, the preparer has a legal responsibility to you.

The fact of the matter is the chances of being picked for a random audit is slim. It's not something you should worry about but it is something you should be prepared for. On the other hand, the chances of being audited do increase in proportion to how badly your taxes are filled out. Any CPA and most software (TurboTax and TaxCut) will check for things that are commonly thought to raise your chances for an audit.

If you ignore the IRS, one of two things will happen

I was certainly not advising anyone to ignore the IRS. The IRS does not forget, they operate under different rules than most of us are familiar with and they will find you and penalize you.

Here's the advice a CPA gave me. If you are going to try anything questionable on your taxes, do your taxes as early as humanly possible, like in January. If you send in your taxes with errors and they are processed before April 15, you will not be penalized. (However, there is no guarantee your return will be processed before April 15, no matter how early you send it in.) The IRS will simply send you a letter explaining the errors and asking for a correction and possibly a check. He was gung ho on trying to lie to the IRS. He believed firmly that I should try to get away with it and that if I was caught, that there would be no penalty.

I would not personally advise anyone to lie to the IRS or ignore the IRS, even if you think you can get away with it. Your accountant, on the otherhand, may advise otherwise.

(1) your business will be so sloppy that you will be unable to maintain it for more than a few months. (2) your illegal business will grow so quickly the IRS will notice you, and take it away from you. And probably throw you in jail too.

I have no idea what you're talking about. Your inference that I advised people to ignore the IRS is bad enough. If you chose to ignore the IRS, that does not imply that your business is sloppy or that it is illegal. You will be in violation of the law if you do not pay your taxes properly, but that does not for a moment imply that your business is illegal.
posted by sequential at 4:45 PM on June 30, 2004

I have no idea what you're talking about. Your inference that I advised people to ignore the IRS is bad enough.

you stated, and I quoted: The chance of someone getting picked on by the IRS is slim. You follow this by suggesting that a CPA is useful in the event of an audit. But you've already stated that an audit is unlikely!

If you were advocating the use of a CPA, you would have said something like:

A professional accountant can help you navigate the many laws and standards related to accounting in your business. While only XX% of tax returns are audited, a CPA will certainly come in handy if you are so unlucky.

You will be in violation of the law if you do not pay your taxes properly, but that does not for a moment imply that your business is illegal

I don't know how you can believe that a business that is in violation of the law is not illegal. Lets try an example:

Suppose I decide to expand my business my importing a magic mystery herb from Canada to the US. Now, the laws of the US laws forbid importation of this herb, but I either don't know this or don't care. Is my business illegal? Yes, of course it is.
posted by Kwantsar at 5:01 PM on June 30, 2004

If you love to do activity X, it may be tempting to start a business so you can do activity X for a living. However, running a business that does activity X requires four major skills:

1) doing activity X
2) accounting
3) marketing
4) managing

If you do not like doing, or are not good at, any of these activities, yet try to do them yourself anyway, your business will fail. Worse, you will be utterly miserable.

Only about 25% of your time will be spent doing what you love. Maybe as much as 50% if you have no employees, are in such high demand that you don't need to do much marketing, and have simple accounting needs. But that will diminish as your business grows. Most people will do much more of activity X (which, after all, is the thing they love) if they work for someone else as an activity X-er.

I spent five years under constant stress and ran up $50,000 in personal debts learning this lesson. If you have not considered that what you are setting out to do may be far more difficult than you anticipated, I urge you to consider it now. But, I will admit that others gave me similar advice before I struck out on my own, and I heeded it not even slightly. I am, after all, much smarter and more competent than other poor schmucks, so those pitfalls do not apply to me. Right? Sure.

I do not regret starting my own business. I regret not stopping about four years sooner than I did, though.
posted by kindall at 5:58 PM on June 30, 2004

I don't know how you can believe that a business that is in violation of the law is not illegal.

Let's say I sell flowers. The flower business generates some revenue. At the end of the year, I fill out my taxes. For whatever reason, my taxes contain an error. The IRS notifies me of this error and asks for me to pay the correct amount of taxes plus a penalty. At this point, I have not committed a criminal or civil offense. My selling of flowers is still legal, but I owe the IRS.

If I were to continue to ignore the IRS, they'd eventually take me to court over the matter and possibly take future tax returns I may get. Even if I get a judgement against me and get jail time for tax evasion, at no time is the act of selling flowers illegal. On the other hand, at no point was your business of selling pot legal.

The act of not paying your taxes does not imply that your business is illegal even if the act of not paying your taxes is illegal. Your company may be in violation of the law, but your business remains legal, but obligated to make due with the IRS.
posted by sequential at 6:02 PM on June 30, 2004

If you love to do activity X, it may be tempting to start a business so you can do activity X for a living. However, running a business that does activity X requires four major skills...

I spent five years under constant stress and ran up $50,000 in personal debts learning this lesson. If you have not considered that what you are setting out to do may be far more difficult than you anticipated, I urge you to consider it now. But, I will admit that others gave me similar advice before I struck out on my own, and I heeded it not even slightly.



sorry...
posted by mecran01 at 6:51 AM on July 1, 2004