If you’re just starting out as a business owner, you’re most likely anxious about surviving, let alone thriving, in your first year of being self-employed. While there are so many plates to spin, it’s essential that you stay on top of your finances when you work for yourself.
“You absolutely have to create a routine to check in with your money,” says Carrie Smith Nicholson, an online business manager and co-founder of the Brilliance and Badassery Conference. “Even if you’re not making a lot of money in the beginning, it’s still important to have a plan and goal for where you want to be in the future.”
So what tools can a newbie solopreneur use to manage their business finances? To make your life easier, we’ve rounded up the top nine apps to help you grow your business in the first year.
No doubt you’ll need to keep careful tabs on your cash flow — your income and expenses. “Small business owners need to have a good idea of what’s happening and how to avoid any big financial pitfalls before the bills come due at the beginning of the next month,” says Smith Nicholson.
“Many of these great bookkeeping apps designed to keep your information organized are easy to update, and have built-in reports that let you look at your business from different angles,” adds Lisa Zamparo, CPA and founder of the Wellth Company.
Here are a few of our favorites:
1. QuickBooks Self-Employed (QBSE)
QBSE enables you to track your mileage, record expenses, log receipts, create reports, send invoices, and review your income and expenses on the regular. Come tax time, you’ll be prepared to export data to file your taxes.
I personally love how QBSE is a one-stop shop for easily separating your business and personal expenses. It has a nifty feature to divvy up a single transaction into both categories.
Pricing: $10 a month for QBSE; $17 a month for the bundle with TurboTax. There are fees for credit card payments (2.9% +$0.25), but ACH payments are free.
A popular bookkeeping app, FreshBooks is primarily for service-based small businesses — think freelancing creatives, legal, tech, medical and educational experts that are paid for their time and expertise.
Besides the usual features that are part of standard bookkeeping software, you can also track billable hours on projects and create a basic project proposal. You can also send recurring invoices and accept online payments.
One thing: I’ve found the reports feature leaves a bit to be desired. My expenses and the proper categories they should go under were a bit muddled.
Pricing: Anywhere from $15 to $50 a month. You can sign up for a free trial. There are credit card fees (generally 2.9% + $0.30 per transaction).
While commonly stacked against FreshBooks as a competitor, Wave is actually free. If you’re just starting out and operating on a lean budget, you might want to give Wave a whirl. Wave offers the same features as any great bookkeeping software, and you can sign up for a free trial.
Pricing: Free, but there are fees for credit card payments (2.9% + $0.30 per transaction) and ACH (1% per transaction).
4. Radius’ Tailored Checking
It’s best practice to separate your personal and business finances, so you’ll need a separate checking account for your business. Look no further than Radius Bank’s Tailored Checking Account.
As a small business owner you’ll enjoy unlimited free transactions and free ATM transactions worldwide (that’s right, you don’t have to pay ATM fees no matter where you’re traveling).
Other neat features are free bill pay and no monthly maintenance fee for accounts with balances over $10,000. (Otherwise, it’s $15 a month). Any money you don’t have to pay a bank means money that can be reinvested into your business.
The PayPal app is a great tool if you need to transfer funds to and from your checking account, purchase something for your business, or get paid on the go.
“I like being able to log in and transfer funds back and forth to my bank account, or buy a product online when it’s on sale, without sitting at my computer,” says Smith Nicholson.“The PayPal mobile app also makes it easy to send invoices so I get paid quickly.”
I personally use the PayPal app to pay for both products and services for my business (e.g., transcription services, brand consulting and WordPress maintenance), and to transfer payments from clients to my business account.
Pricing: Fees vary, but for sales, it’s 2.9% + $0.30 per transaction
If you have employees (including yourself), consider looking to Gusto for your payroll needs. Gusto not only helps small businesses with their payrolls, but it can also help with some basic human resources capabilities, such as HR management and benefits administration. And you can create a separate payroll for contractors. This comes in particularly handy if you have a seasonal business and hire part-time help during peak times.
Pricing: There are three main pricing plans starting at $45/month to $161/month.
Do you use your car a lot for your business? If you want an a la carte app that only tracks mileage, check out Everlance. Its Automatic Detection feature will automatically track your mileage. You just need to turn on this feature, “set it and forget it,” and it does the work for you.
You can also categorize which trips are for work and which are personal based on your schedule; then you can shoot out PDF reports for tax and bookkeeping purposes.
Pricing: Free for Basic; $5 for Premium.
While a lot of other apps offer time tracking, I’ve found that Toggl is a great way to track time spent on projects. You can track your time based on specific tasks, which helps you not only track billable hours, but also how much you spend on specific projects. Toggl’s free version also enables you to create reports based on different parameters: by client, project, or a specific time period.
Pricing: Free for Basic; paid packages range from $9 to $49 a month.
Recommended by Wellth Company’s Zamparo, HubDoc is a document collection and management software that acts like a virtual bookkeeper for expenses. You snap a picture of a receipt or forward it to the app by email. It then uses optical character recognition to automatically export that data into your bookkeeping software. “I started using it in my business about a year ago and it saves me hours of data entry each month,” says Zamparo. “My clients love it, too.”
Of course, these are all just tools. Making sure you keep your financial housekeeping top of mind requires discipline and regular monitoring. Smith Nicholson recommends doing budget check-ins twice a month.
For her own business, she’ll review how much money is in her business bank account, how much she’s spent, and what upcoming projects she has. She’ll also estimate what she plans to earn and spend in the next two weeks, and then brainstorm ideas for closing the gap between what she’s currently earning and what she wants to be earning.
Sure, it’s a bit more work and time, but by focusing on managing money matters throughout the year, your small business — and its cash flow — will thank you.