Streamlining Your Business Finances: The Importance of Bookkeeping & the Best Software Solutions Available

Prioritize bookkeeping! The least exciting, but arguably most important part of a business. The proper definition of Bookkeeping is the process of recording, organizing, and managing a business's financial transactions. 

On the more micro level, bookkeeping includes tracking revenue, expenses, invoices, receipts, and other financial documents. Accurate bookkeeping is crucial for small businesses to understand their financial health and make informed decisions for future growth.

Here are some reasons why bookkeeping is important for small businesses:

1. Tax Compliance: Accurate bookkeeping is essential for meeting tax obligations. It helps you keep track of deductible expenses, estimate quarterly taxes, and prepare tax returns.
2. Financial Management: Bookkeeping gives you a clearer picture of your business's financial health. It allows you to track cash flow, identify areas for cost-cutting, and gives you the vision to make the best financial decisions.
3. Business Planning: Bookkeeping helps you create budgets, forecast sales, and plan for growth or upcoming turbulent times or seasons. It provides valuable data for making strategic decisions about investments and expansion. You cannot engage in #3 without getting #2 correctly. 
4. Investor/Loan Applications: Investors and lenders will require detailed financial information before considering investing their money in your business. Proper bookkeeping helps you prepare this information to present it to them. A clear picture of your financial health allows people with big pockets to pull the trigger on your business. 

Now that we've established why bookkeeping is important, let's take a look at some of the best bookkeeping software options for small businesses (in our opinion):

1. QuickBooks: QuickBooks is one of the most popular bookkeeping software options for small businesses. It's the first name people think of when they think of bookkeeping. It offers a range of features including expense tracking, invoicing, payment processing, and payroll management. It’s a good option for businesses that need a more comprehensive bookkeeping solution that can handle a variety of financial tasks. There is also a mobile app that consolidates all your data for when you need to view things on-the-go. Prices start at $25/month for the basic plan. 
2. Xero: Xero is a cloud-based accounting software that offers features such as bank reconciliation, expense tracking, and invoicing. Xero is known for its user interface which is minimal and easy to use. Moreover, you can integrate it with over 700 third-party apps, so customizability won't be a problem with Xero. Prices start at $11/month for the basic plan.
3. FreshBooks: FreshBooks is a user-friendly accounting software that offers features such as time tracking, project management, and invoicing. It’s a great option for businesses that want a simple bookkeeping solution. Prices start at $15/month for the basic plan.
4. Wave: Wave is a free accounting software that offers features such as invoicing, receipt scanning, and expense tracking. It also offers paid add-ons for payroll and payment processing. Nothing is ever free. There are some limitations that comes with Wave such as a lack of customer support. Additionally, Wave offers paid add-ons for payroll & payment processing. Wave is a good option for small businesses on a tighter budget, you can still manage to get the same features as paid bookkeeping softwares for free.

It's important to use this as nothing but a guide and choose a bookkeeping software that fits the specific needs of your business. Factors such as the size of your business, budget, & specific features of software should be taken into consideration. 

But if we had to summarize;

If you need a comprehensive bookkeeping solution and don't mind paying a higher price, QuickBooks may be the best option for you. If you're looking for a more affordable option with a clean interface, Xero may be the way to go. FreshBooks is a great option for businesses that want a simple bookkeeping solution with a mid-range price, while Wave is ideal for businesses on a tight budget.

Remember, accurate bookkeeping is essential for the success of your small business, so it's worth investing in the right software and taking the time to manage your finances properly.