If you are starting a small business or making a living as a freelancer, one of your first priorities has to be keeping accurate records. These records are often the basis for success.

They allow a business owner to track income and expenses and assess profit margins and the overall efficiency and profitability of the company. Not to mention that they insure that the business is complying with all Internal Revenue Service (IRS) rules.

Key Takeaways

  • Intuit QuickBooks can be used at a basic level or customized with advanced features.
  • Wave Accounting has a free entry level with basic bookkeeping functions.
  • Bookkeeper is easy to set up and easy to use.

The IRS does not require a business to keep an electronic record. However, manual records, even with professional bookkeeping aids like ledgers, can become cumbersome, especially as a business grows.

The Essentials

It is essential to keep client files on paper, in electronic form, or both. A record of the services and products you have provided, along with copies of the business agreements, must be available if any aspect of the transaction comes into question down the road.

Whichever software you use, keep a record of the services and products you provide, along with copies of all contracts.

You also need a record of contracts. A contract should be signed each time a service is provided or a product is sold. Keep a copy of every one of those contracts.

A number of record-keeping software options are available. The three options listed below are among the highest-rated and most popular for startups and small businesses.

Intuit QuickBooks Online

Intuit QuickBooks Online is widely rated as one of the best overall accounting and record-keeping software programs.

The software guides you through data entry and automatically performs accounting tasks. You can integrate other software you use, including Microsoft Excel spreadsheets.

Among other things, with QuickBooks, you can keep track of daily expenses and transactions, pay bills and employees, send invoices, and sync data across all your financial accounts.

This software can be used at the most basic level or be customized with advanced functions to fit the needs of your business. It is entirely cloud-based so you have access to your data from any internet-connected device.

QuickBooks offers some of the best-priced plans out there. The least expensive plan, called SimpleStart and limited to one user, costs $25 a month as of the end of 2019. The best-selling option, called QuickBooks Online Plus, is $70 per month. Both were available in three-month trial versions at lower prices.

Wave Accounting

One Wave Accounting's most attractive features is its free basic service, complete with accounting, invoicing, and receipts. It also has cloud storage features, so it's suitable for your business if you are constantly on the move and need access from any location.

Credit card processing and bank payments can be used on a fee-for-use basis. Payroll services can be added for a monthly fee.

This software may be best suited to small businesses with 10 or fewer employees. It's a good choice for freelance workers and solo entrepreneurs.

Bookkeeper

Bookkeeper, from Avanquest, is a good choice for a small business owner in search of a program that sets up quickly and allows easy management of records.

The software allows you to create checks and pay bills, send invoices, and track sales and expenses. Other features help you process credit card payments and prepare taxes.

The list price for this comprehensive software is $39.95 as of December 2019.