Self-Employed Freelancers & Home-Based Businesses: Keeping Your Small Business's Finances on Track

by Vishal Rao

One of the biggest benefits of operating a home-based business is that it doesn't require any formal training or experience. After all, some of the most successful individuals never attended a single business-related class or workshop.

The only drawback to having a lack of experience and/or business education is that it can make tracking your company's finances difficult. Even accountants who spend their lives working with numbers often find bookkeeping a tedious chore.

But no matter how mundane keeping track of your company's revenue and expenses may be, it is also necessary for several reasons:

Freelancers, Home-Based, & Small Businesses Need to Keep Track of Finances such as Revenue & Expenses for The Following Reasons:

1) You need to know at a glance if your business is spending more than it is earning.

2) You need to have all of this information documented for tax time.

3) You can use this data to help you establish your budgets and to adjust your spending.

Of course, just knowing it's important doesn't make it easier to accomplish. In fact, you really have two options if you want to reduce your accounting stress:

A) Hire a professional to help you or

B) Invest in a helpful accounting software program.

While hiring a professional would be the easiest route, it's also more costly. For most home-based businesses, the most effective choice is to use an accounting software program.

How to Choose The Best Account Software for Your Freelance or Small Business:

1) Know What You Need The Program To Do

The accounting programs currently available can handle a wide array of business related tasks, such as tracking expenses, creating invoices, handling payroll, and printing checks. The more of these tasks a program can do, the more expensive it will be.

For that reason, you should know exactly what you are going to use it for. That way you can get a program that meets your needs without paying for features you'll never use.

2) Know The Details Of Your Computer

Before you buy any software, you need to know your computer's current statistics, such as what operating system you use, how much hard drive is available, and how much RAM your system contains.

If you buy a program that won't work on your system, you won't be able to return it and get your money back once it's been opened. Checking in advance will protect you from getting stuck with software you can't use.

3) Do Your Homework

Any type of business-related purchase requires careful consideration, so be sure to investigate before you buy. Explore all of the software programs available and find out what other people are saying about them. Sites like Epinions.com and CNET.com can provide you with product feedback from both consumers and reviewers.

Pay attention to mentions of difficulty levels since you want a program that is easy for you to learn and to use. Also, take advantage of software demos. Nothing beats a hands-on preview. You should do some research into the companies' technical support and customer service as well. If you ever need help, you want to know it's readily available.

4) Be Aware Of Costs

Another thing you need to know is how much you can afford to spend on the program. The costs for accounting software run from $30 to $600 or more depending on the features included.

Knowing what you need and can afford in advance will prevent you from paying too much. Shopping around for a particular program won't do much good, however. Whether you buy a program online, from an electronics store, or from a retail outlet, you'll pay about the same price. Watch for rebates or special offers, however, because they can cut your costs considerably.

Here are a few suggestions for the best Accounting Software for your Home-Based or Small Business:

* Peachtree Accounting 2003 Peachtree is one of the most recognized names in business accounting. This program allows you to manage your accounts receivable, accounts payable, inventory, payroll, job costing, fixed assets, even general ledger. Other valuable features perfect for small or home-based businesses, such as Internet postage, credit card service, direct deposit, and contact management are also included.

This version costs $199.95, but others are also available. You can learn more about Peachtree's line of accounting software at http://www.peachtree.com

* Quicken Home & Business At $89.95, Quicken Home & Business is one of the most budget-friendly accounting programs on the market. Even though its price is low, its packed with features, such as creating custom estimates and invoices, generating business reports, setting up a Merchant Account, managing taxes and expenses, and keeping track of your cash flow.

You can also use the program to download your transactions and pay your bills online. Other versions of Quicken are also available through the company's web site http://www.quicken.com/quickensw/

* Microsoft Monday 2003 Deluxe & Business With this software, you can take care of most of your accounting needs without breaking your business's budget. At only $64.95, the software still comes with a wide range of features including the ability to create customized invoices, estimate tax payments, compare financial data, balance your checkbook, track cash flow, and pay your bills. Additional versions of the the program are available for sale at http://www.microsoft.com/money

Knowing this useful information will help you find an accounting program that will make your job easier, less stressful, and more efficient.

Vishal Rao is the editor of Home Based Business Opportunities - A website dedicated to opportunities, ideas and resources to help you start a home based business. Visit him at: http://www.home-based-business-opportunities.com