Track Your Earnings and Expenses

earnings and expenses

How do you keep track of all this stuff without losing your sanity?

It’s not as hard as you think. There are several computer-based software packages that can track all this for you and all you have to do is enter the information accurately and correctly. I use Quickbooks by Intuit because you can start very small with it and as your business grows, you can upgrade to more advanced versions and add packages as needed.

If you are just starting out, you can begin with Quickbooks Simple Start. It contains the essentials of bookkeeping; managing sales revenue, customers, employees and expenses in an easy format to learn and use while maintaining real accounting records so you can file your quarterly and annual tax returns properly. At a cost of under $100, it is a great bargain. Pros: it is easy to learn and use. Cons: it only runs on Windows-based PCs. I’m sure Intuit will make a Mac version if they get enough requests for it.

Once your business grows, you need to upgrade to Quickbooks Pro. This software package runs on both Windows PCs and Macs. It will import all your information from Simple Start and is much more powerful. It does everything that Simple Start does plus:

Handles paying employees, bill tracking, invoicing and writing checks
Keeps track of sales revenue and expenses
Allows you to import data into Microsoft Word or Excel
Let’s you stay on top of things by showing you who owes your money and what bills are coming due
Has over 100 built in reporting templates
Let’s you create professional grade custom forms
Track vehicle and equipment depreciation
Quickbooks Pro costs under $200 and is well worth the price. Other packages can be added to it (for some extra money) to accept credit card payments directly, process an unlimited number of employees payroll and manage invoices.

Personally, I use Quickbooks Pro. My accountant recommends it, and when I started my business they hadn’t created the Simple Start edition yet.

Once you’ve been around the block more than a few years and you’re making enough to higher two or more office workers, you can upgrade to Quickbooks Premier Contractor Edition or Industry Specific Edition. Accounting software this powerful isn’t really necessary unless more than one person needs to be able to work on the company’s file at the same time. You would also want to control who can use the file and how much of it they can access, and this package allows you that kind of control.

I don’t have any employees and I enter my own data, so I don’t need this much power. I don’t plan to grow my company to the point where I would need this much power either, but you may want to do it.

Regardless of the size of your company, you must keep track of expenses, revenue and taxes so you need at least Quickbooks Simple Start. Some people use Quicken Home and Business or Quicken Premier, but those are not accounting software packages. They are money tracking packages and reports generated using them could result in an IRS audit because they don’t prevent you from deleting accounts and entries. Quickbooks won’t allow you to delete things that standard accounting rules don’t allow and your accountant will be much happier with you.

How do you get rid of the mistaken entries you make and closed checking and other accounts? You make entries to reverse the mistaken entries and you zero out closed checking and savings accounts. The software keeps track of them because they were used for past transactions. This may seem trivial until the IRS comes knocking on your door wanting to see all your records. They have an expectation that even if you don’t know bookkeeping you should either higher a bookkeeper or use a software package to keep your books for you.

Let’s review:

You need an IRS acceptable way to keep track of your business finances
Start with Quickbooks Simple Start
Upgrade to Quickbooks Pro
If you have a larger business with multiple file users, upgrade to Quickbooks Premier Contractor’s Edition or Quickbooks Premier Industry Specific Edition
If you refuse to keep up with your expenses and revenue yourself, higher a bookkeeper
If you use Intuit TurboTax to do your taxes, all Quickbooks editions allow data to be extracted from your company file directly into TurboTax
Other tax software may also allow you to import data directly from Quickbooks; just read the box to determine compatibility
If you don’t do your own taxes higher a CPA
That’s commercial lawn care business bookkeeping in a nutshell. If you have any questions or thoughts please leave them in the comments below.