A financial app can help your business, but it’s often difficult to navigate the complex ecosystem.
Just like every entrepreneur, you wear multiple hats. At one point or another you’ve probably been involved, or still are, with every part of your business.
One aspect that definitely needs your attention is your business’s financials. But you didn’t start your business to look at spreadsheets all day. For many entrepreneurs, this is the last thing they want to spend their time on and that’s completely understandable.
That said, if your business still isn’t at the stage where you can delegate the financials, the good news is that things don’t have to be that hard.
There’s a host of apps that make keeping track of your financials a breeze. And in case you’ve just rolled your eyes because you need to make room in your budget for accounting software, many of these apps have small business versions that are affordably priced.
Here’s the thing: All of these tools do different things.
A mistake that many business owners make is to buy multiple app subscriptions and not use any of them to their full advantage. You need to build your own financial stack or ecosystem.
Think of it in three levels:
- Base layer: One tool that handles everything you need. All of the basics to monitor financial performance and health.
- People layer: These are tools that allow you to track and pay employees. Many financial tools offer them in addition to their core function.
- Growth layer: Tools used to forecast, track and analyze your business’ future. Use this information to make better decisions and ramp up growth.
Base layer: If you’re only going to invest in one financial app
If it’s absolutely necessary for you to save every single penny possible, then yes, you potentially could do your books for free on Google Sheets or some other free spreadsheet software. However, this is not advisable. Quite simply, your time is way too valuable and you should spend it growing your business and not fiddling with a spreadsheet.
Most accounting software solutions have a small business/online version that can be used for a low monthly fee. And by low, we mean really low, like under $10/month kind of low. So if you factor in how much time you’ll literally lose trying to make everything work with a spreadsheet, it’s a no brainer to sign up for dedicated accounting software.
Understandably, accounting software can be intimidating for non-accountants. And if your last interaction with accounting software was during the early 2000’s, well things have changed.
Today’s small business solutions are user friendly and there’s an abundance of documentation and videos on how to use them. Also, if you aren’t sure which one to choose, most accounting software solutions have free trials so you can test drive them all and find the one that you like the best.
Here are 2 accounting software options.
- QuickBooks Online: This is the small business version of one of the most popular financial software suites. It comes with all the basics like expense, income, tax and profit tracking as well as invoicing. For many entrepreneurs, Quickbooks Online is all they’ll ever need.
- Xero: Just like QuickBooks, Xero is an accounting powerhouse, and they also have a small business solution that’s affordably priced. There is plenty of overlap between what the two offer, so you should look at what they both provide in each of their pricing tiers and try them out for yourself.
People layer: Make running your payroll easier
If you have several people that you need to pay in your business, you know how time-consuming running payroll can be. Running payroll is often a stressful time of the month for entrepreneurs because it requires a lot of attention to detail, timeliness and has no margin of error.
Payroll apps allow you to make this process easier, faster and reduce the number of errors. They do this by allowing you to collect all the data you need for your calculations, help you run dashboards that make it easy to spot any mistakes before they happen and automate processing the payments.
The key aspect of payroll apps that make them so essential is that they can integrate with your accounting software, so no more need to export .csv files back and forth or manually entering data. Just like with the accounting software, it’s all about finding the one with the right fit and price point for your needs.
Luckily there are plenty of good options to choose from. Here are 3 of the most popular payroll apps for you to consider.
- Gusto: One of the reasons why Gusto is so popular with entrepreneurs is due to its pay-for-what-you-need pricing structure and its ease of use. Most of its pricing structure revolves around a low base fee plus a per person surcharge.
- Rippling: Similar to Gusto, Rippling handles much of your payroll and HR management. The founding team comes over from Zenefits and has experience in the space.
- Quickbooks Payroll: If you are already using Quickbooks for your accounting, this add-on service makes a lot of sense. Integration is seamless and the pricing is very reasonable. It offers fewer features than Gusto, but if you want something that just works this will fit your needs
Transactional layer: Add efficiency for tracking the flow of money
As you build your foundation with accounting software, the next step is staying on top of transactions. Many businesses complicate bookkeeping, but in reality at the simplest level you’re talking about money coming in and money going out.
Money coming in:
Invoicing: Both Xero and Quickbooks have built-in invoicing options to help you get paid, and automatically sync the invoice and accounts receivable.
However, there are also a litany of tools built specifically for the purpose of invoicing. Here are some of the top choices. Many of these are specific to a niche industry, combining other functionality.
Some popular examples:
- Practice Ignition: With Practice Ignition, you can combine proposals, payments and the entire sales process in one easy-to-use tool.
- Harvest: Harvest is an invoicing tool that integrates with Xero and Quickbooks Online. Harvest is popular with creatives and agencies, as you can track your time and include it in the invoice.
- Chargebee: If you are a Saas company, it’s likely you’re managing a lot of monthly subscriptions. Chargebee is a tool to streamline recurring revenue payments and collections.
- In addition to invoicing, you’ll also need to make it efficient to get paid. A great tool for payments is Stripe, which syncs to most banks and to QBO and Xero. Use Stripe for recurring payments, or add to invoices for one-time payments.
- Chaser: What about after you send the invoice? How do you make sure it gets paid? With Chaser, you have automated reminders to collect what’s owed.
Money going out:
As you make payments, it’s not always as simple as using a credit card at a store. You’ll have contractors to pay, as well as vendors. Some vendor payments are fixed monthly costs, and others are variable. With technology, you can streamline many of these steps.
- Bill.com: With bill.com, you can create a view of all your accounts payable, so you can cash plan with what’s about to happen. As you get bills you can also create an approval process to make sure you’re only paying for what you should.
- Hubdoc: Hubdoc has been acquired by Xero, and is another tool to streamline your accounting process. With Hubdoc, you can scan and take picture of receipts and automatically add to the transactional level in your bookkeeping system.
- Divvy: For tracking and managing your expenses, Divvy is a strong tool to automate and connect with your accounting system.
Growth layer: Look into your financial future with cash flow forecasting
Surprises can be fun, but not when it comes to your business’s cash flow. This is the one area in your life where you don’t want surprises ever. That’s why forecasting is such a big part of what accountants and financial analysts do.
Financial forecasts give you an idea of what your cash flow will look like in the future based on historical data. They are incredibly useful when it comes to making data-informed decisions such as planning for new hires, purchasing equipment or applying for a business loan. Unfortunately, there’s a perception that creating forecasts is something only accountants can do.
Today’s forecasting apps integrate with all the financial apps you use and can automatically generate the insight you need.
Here are 3 great apps that focus on cash flow forecasting:
- Float: Real-time cash flow updates, scenario planning, and friendly pricing are some of the reasons why
- has become popular for those businesses for whom being precise about their cash flow is critical to their operation.
- Quickbooks: As part of its financial accounting suite, Quickbooks has a cash flow forecasting feature built-in. If you’re already using Quickbooks it makes sense to try it out or, if necessary, consider upgrading to the plan that includes this feature.
- Spotlight Reporting: Spotlight reporting is a preferred choice of Pasquesi partners providing a visual dashboard align with forward-looking projections. Spotlight integrates with Quickbooks Online and Xero, so when your books are up to date, the data automatically leads to a deeper view of your reporting.
Get help from those who understand your financial app ecosystem
Running your business is hard enough, there’s no need to make it harder by not using the right tools. As you can see, it doesn’t have to be that way, and if you are willing to invest the time, you can even get away with investing close to nothing.
The key is to not get overwhelmed with technology. Nearly all these tools can integrate with each other which should only simplify your life. And if they don’t integrate, Zapier is a tool that can bring automation together.
However, it’s crucial to work with a team that helps you get the most of your tools so you are actually benefiting from the technology.
Having a dedicated expert or team of experts (like Pasquesi) keeping track of your business’s financials should be your first option since that way you can focus on what you do best, which is running and growing your business.