What finance software should we be using for personal and business finances?
January 12, 2010 10:50 AM Subscribe
Sick of using a home-cobbled spreadsheet for personal finance, and wanting something simple and envelope-based, I was about to pick up YNAB. However, we'll be starting up a small limited liability business pretty soon. Should I use something more complex, such as Quicken, to track all personal and business finances? Or should I track things separately, with different software? At what point, if any, should we consider getting an accountant?
I use Outright.com to track my business expenses and income, and a homemade spreadsheet to track my personal finances.
posted by peanut_mcgillicuty at 11:16 AM on January 12, 2010
posted by peanut_mcgillicuty at 11:16 AM on January 12, 2010
Response by poster: We've been wary of online tracking. Are we overly paranoid?
posted by moira at 11:20 AM on January 12, 2010
posted by moira at 11:20 AM on January 12, 2010
Having an accountant doesn't mean they do everything for you. They might do your taxes and EOY reports, for example. The job you're talking about is bookkeeper and if the LLC/P is small enough there's quite easily no need. (If you do hire someone, they may dictate the software you use, so think of that aspect.)
I have no particular great love for the Intuit empire, but various blends of Quicken include the ability to manage a business. If the business has a lot of transactions, though, or multiple bank accounts or assets or inventory to track, ultimately you will probably prefer a package like Quickbooks. It really depends on your personal judgement of the complexity you're grappling with. A single business checking account with about 50 checks or deposits a year is probably a Quicken job, for instance. At 50 checks or deposits a month, you may prefer the capabilities of Quickbooks. Then again, if they're almost all the same thing that could be overkill.
I will say that after long years of assistant-managing my dad's rental property business I wasn't happy with disentangling business and personal transactions, but then he was never super-careful about that in the real-world sense and got worse as he aged. I am currently trying a version of Quicken that includes rental property features and will probably decide at the end of the year whether to continue with it. It is a small annoyance to me that the business and personal category and class menus are intermixed. One possible solution is to simply keep them in separate Quicken data files, but that then means certain transactions will need to be entered in both files.
I do like some of the web-based platforms out there but none of them are quite as robust yet as desktop software. I'll be watching the Quicken platform now that they've swallowed Mint.
posted by dhartung at 11:21 AM on January 12, 2010
I have no particular great love for the Intuit empire, but various blends of Quicken include the ability to manage a business. If the business has a lot of transactions, though, or multiple bank accounts or assets or inventory to track, ultimately you will probably prefer a package like Quickbooks. It really depends on your personal judgement of the complexity you're grappling with. A single business checking account with about 50 checks or deposits a year is probably a Quicken job, for instance. At 50 checks or deposits a month, you may prefer the capabilities of Quickbooks. Then again, if they're almost all the same thing that could be overkill.
I will say that after long years of assistant-managing my dad's rental property business I wasn't happy with disentangling business and personal transactions, but then he was never super-careful about that in the real-world sense and got worse as he aged. I am currently trying a version of Quicken that includes rental property features and will probably decide at the end of the year whether to continue with it. It is a small annoyance to me that the business and personal category and class menus are intermixed. One possible solution is to simply keep them in separate Quicken data files, but that then means certain transactions will need to be entered in both files.
I do like some of the web-based platforms out there but none of them are quite as robust yet as desktop software. I'll be watching the Quicken platform now that they've swallowed Mint.
posted by dhartung at 11:21 AM on January 12, 2010
Do you use online banking? Outright gathers even less information than that.
At the free level, I'm not importing anything or linking to anywhere else; I'm just entering income or expense amounts however makes sense to me, and tagged with the type of tax issue (meals vs supplies, for example). Outright can make excellent projections for how much I owe in taxes and allows me to file quarterly taxes. It's made it a hell of a lot easier than tagging each item in my personal spreadsheet as tax-related.
posted by peanut_mcgillicuty at 11:36 AM on January 12, 2010
At the free level, I'm not importing anything or linking to anywhere else; I'm just entering income or expense amounts however makes sense to me, and tagged with the type of tax issue (meals vs supplies, for example). Outright can make excellent projections for how much I owe in taxes and allows me to file quarterly taxes. It's made it a hell of a lot easier than tagging each item in my personal spreadsheet as tax-related.
posted by peanut_mcgillicuty at 11:36 AM on January 12, 2010
What about Gnucash (free). The double-entry accounting is a little confusing the first time you use it, but once it all clicks, it works like a charm.
posted by chrisamiller at 11:37 AM on January 12, 2010 [1 favorite]
posted by chrisamiller at 11:37 AM on January 12, 2010 [1 favorite]
chrisamiller - how long did it take before it clicked? I started using it, but I wasn't putting a lot of effort into it and I wandered away.
posted by filthy light thief at 11:48 AM on January 12, 2010
posted by filthy light thief at 11:48 AM on January 12, 2010
I had somewhat different requirements than you but I asked a similar question about software recently and got some good food-for-thought answers. [I also use a Mac].
posted by jessamyn at 12:33 PM on January 12, 2010
posted by jessamyn at 12:33 PM on January 12, 2010
Best answer: Hopefully I can be of some help, as I've made a personal finance tool (PearBudget), know the landscape (I'm one of the technical reviewers for jdroth's upcoming Your Money: The Missing Manual book), and (seeing as PearBudget is now my full-time business) I have to do business finance stuff as well. So clearly, I'm not going to be unbiased, but I think I do a pretty good job of being open about different options, and where things might be good / bad for you.
First, I didn't see this in the thread so far, but it's usually one of the first things people note: You absolutely want to separate out your personal and your business expenses from one another, both in the bank accounts that you use, the checks that you write, and the record keeping system you use. There might be tools that can handle a combined personal-and-business account setup, but I'd be wary of them. Even just as a means of keeping things straight in your own head, I'd encourage you to use different tools. Also, personal finances and business finances have many of the same principles, but tools that are customized for home finances or business finances are going to have slightly different features, and you'll probably use them in slightly different ways. So, yeah. I'd say use two different tools.
In terms of personal finances, YNAB is a good system. It does have a specific set of rules that you're encouraged to follow (see this tweet, from yesterday ... keeping in mind that Jesse was at the end of a long day of probably difficult customer support). If YNAB's rules aren't in line with what you want to do with your personal finances, it might be a tougher system to follow. I'd obviously love it if you check out PearBudget (either the web based version or the spreadsheet), which was built off of the envelope model (but is friendlier to credit cards than the traditional envelope system), but I know that might not be to your liking, either. And, of course, there's Mint or Wesabe, which automate a lot of the work for you ... and if you're specifically looking for an envelope-budgeting approach, I don't know that they're going to be particularly useful. The concern I've had from the beginning with Mint isn't the security aspect of it, but the intentionality of it. I want to be mindful of where my money's going, and where I want it to go, and I've found that having my spending be automatically tabulated by a computer means that I see it as descriptive of my spending, rather than prescriptive of my spending. YNAB and PearBudget have, I feel more of a requirement around consciousness (if that makes sense)? Of course, there are a billion different tools out there ... if there's something in particular you're looking for, my e-mail's in my profile, and I'd be happy to make recommendations of various other tools.
Regardless of which tool you use, though, I'd highly recommend that you set aside a dedicated place, a dedicated time, and a dedicated process to doing your finances each week. This is the case for everyone, whether you're starting a business or not.
Let me know if you have any questions on the personal finance side of things.
On the business end of things, I use Outright for our business expenses, and I've found it to be a great app. From what you're describing your needs are, it sounds like it's right in line with what you'd be looking for. You might also look at LessAccounting.
In terms of an accountant, I think dhartung's right, in that you'd want a bookkeeper before you'd want an accountant (CPAs are going to cost more, and much of the work would be bookkeeper-level). And, as dhartung said, you might not even need a bookkeeper. When it comes to taxes, you'll likely want some help preparing your taxes, but, again, you might not need a full-on bookkeeper. I use an "Enrolled Agent" rather than a CPA.
Urm ... rather than keep talking, I'll shut up now. If you have any other questions I can help with, please let me know. And if you (or anyone else) wants to get in touch by e-mail, check my profile and shoot me a note.
posted by Alt F4 at 12:51 PM on January 12, 2010 [6 favorites]
First, I didn't see this in the thread so far, but it's usually one of the first things people note: You absolutely want to separate out your personal and your business expenses from one another, both in the bank accounts that you use, the checks that you write, and the record keeping system you use. There might be tools that can handle a combined personal-and-business account setup, but I'd be wary of them. Even just as a means of keeping things straight in your own head, I'd encourage you to use different tools. Also, personal finances and business finances have many of the same principles, but tools that are customized for home finances or business finances are going to have slightly different features, and you'll probably use them in slightly different ways. So, yeah. I'd say use two different tools.
In terms of personal finances, YNAB is a good system. It does have a specific set of rules that you're encouraged to follow (see this tweet, from yesterday ... keeping in mind that Jesse was at the end of a long day of probably difficult customer support). If YNAB's rules aren't in line with what you want to do with your personal finances, it might be a tougher system to follow. I'd obviously love it if you check out PearBudget (either the web based version or the spreadsheet), which was built off of the envelope model (but is friendlier to credit cards than the traditional envelope system), but I know that might not be to your liking, either. And, of course, there's Mint or Wesabe, which automate a lot of the work for you ... and if you're specifically looking for an envelope-budgeting approach, I don't know that they're going to be particularly useful. The concern I've had from the beginning with Mint isn't the security aspect of it, but the intentionality of it. I want to be mindful of where my money's going, and where I want it to go, and I've found that having my spending be automatically tabulated by a computer means that I see it as descriptive of my spending, rather than prescriptive of my spending. YNAB and PearBudget have, I feel more of a requirement around consciousness (if that makes sense)? Of course, there are a billion different tools out there ... if there's something in particular you're looking for, my e-mail's in my profile, and I'd be happy to make recommendations of various other tools.
Regardless of which tool you use, though, I'd highly recommend that you set aside a dedicated place, a dedicated time, and a dedicated process to doing your finances each week. This is the case for everyone, whether you're starting a business or not.
Let me know if you have any questions on the personal finance side of things.
On the business end of things, I use Outright for our business expenses, and I've found it to be a great app. From what you're describing your needs are, it sounds like it's right in line with what you'd be looking for. You might also look at LessAccounting.
In terms of an accountant, I think dhartung's right, in that you'd want a bookkeeper before you'd want an accountant (CPAs are going to cost more, and much of the work would be bookkeeper-level). And, as dhartung said, you might not even need a bookkeeper. When it comes to taxes, you'll likely want some help preparing your taxes, but, again, you might not need a full-on bookkeeper. I use an "Enrolled Agent" rather than a CPA.
Urm ... rather than keep talking, I'll shut up now. If you have any other questions I can help with, please let me know. And if you (or anyone else) wants to get in touch by e-mail, check my profile and shoot me a note.
posted by Alt F4 at 12:51 PM on January 12, 2010 [6 favorites]
Should I use something more complex, such as Quicken, to track all personal and business finances?
If you do go this route, you want QuickBooks. I don't think Quicken provides much business support.
And Alt F4's answer was great.
posted by yerfatma at 1:05 PM on January 12, 2010
If you do go this route, you want QuickBooks. I don't think Quicken provides much business support.
And Alt F4's answer was great.
posted by yerfatma at 1:05 PM on January 12, 2010
how long did it take before it clicked? I started using it, but I wasn't putting a lot of effort into it and I wandered away.
Probably a few hours. The key is remembering that every expense transaction has to come from somewhere and go somewhere. If you pay for a meal, it comes out of your bank account and goes into Dining expenses. If you pay your credit card bill, it comes out of your bank, and into your credit card account.
That all sounds scary, but the easiest way to use GnuCash is to set up your accounts, then each month, just import the QIF or QFX files from your credit card or bank's site. You go through the list, stick each expense into a category, and it'll take care of the rest. After a few times, it learns which transactions go where and you only need to categorize a few of them.
The reason I suggest it here is that it's feature-rich, and will let you track the things you need and generate pretty much any conceivable report for your business expenses. It's designed more as a professional bookeeping program than a hold-your-hand personal finance package.
posted by chrisamiller at 2:47 PM on January 12, 2010 [1 favorite]
Probably a few hours. The key is remembering that every expense transaction has to come from somewhere and go somewhere. If you pay for a meal, it comes out of your bank account and goes into Dining expenses. If you pay your credit card bill, it comes out of your bank, and into your credit card account.
That all sounds scary, but the easiest way to use GnuCash is to set up your accounts, then each month, just import the QIF or QFX files from your credit card or bank's site. You go through the list, stick each expense into a category, and it'll take care of the rest. After a few times, it learns which transactions go where and you only need to categorize a few of them.
The reason I suggest it here is that it's feature-rich, and will let you track the things you need and generate pretty much any conceivable report for your business expenses. It's designed more as a professional bookeeping program than a hold-your-hand personal finance package.
posted by chrisamiller at 2:47 PM on January 12, 2010 [1 favorite]
As for when you want an accountant, that will depend on when you think the cost is justified. If you're up to your ears in regulations and rules and think you're missing out on some tax loopholes that will save you a ton of cash, then an accountant may be in order. In my experience, running a small, low-income LLC is pretty straightforward, though.
posted by chrisamiller at 2:50 PM on January 12, 2010
posted by chrisamiller at 2:50 PM on January 12, 2010
If you want a separate envelope-based budget system for your personal finances, try Neobudget. It's an elegant design, intuitively easy to use, and the developer is very responsive if you have any questions.
posted by Joleta at 8:31 PM on January 12, 2010
posted by Joleta at 8:31 PM on January 12, 2010
This thread is closed to new comments.
posted by filthy light thief at 10:54 AM on January 12, 2010