- You probably already know
that budgeting is super important
when it comes to your personal finances
and helping you track your financial goals.
But what if you own a business?
What if you're self-employed?
Doesn't budgeting factor into that somehow?
Budgeting for your business
is definitely something that you ought to do.
And in this video, I have five amazing tools
that you should consider
when it comes to budgeting for your business
so you can hit your financial goals as well.
(serene music)
Hey guys, it's Justine with The College Investor,
investing and personal finance for millennials.
So when it comes to budgeting for your business,
one of the most important reasons why we do this
is because you want to track money
that is coming in and going out of your business.
And ideally, you are keeping that separate
from your personal finances.
You also want to learn how to save and forecast
for future business expenses.
Perhaps you're saving up
for some new software and equipment,
or you're saving to move into a new office.
Those are things that you want to better prepare
and save for when the time comes.
Budgeting also can help you track and eliminate expenses
that no longer serve your business.
Think about all the subscriptions
and things that you use
to run your business every single day.
If there's an automated subscription
that you are no longer using
or it's just not serving your business well,
it's easy to go through and look at your budget and see
so that you can cancel that subscription
and really enhance your business finances.
There's a fantastic book, called "Profit First",
and I've personally read this book.
There are some different tips and tricks
that the author uses to help you figure out
exactly how to make sure
you are paying yourself consistently
and also saving for some of those things that I mentioned.
I highly recommend you check out the "Profit First" book
so that you can get some ideas
on how to streamline your business budget.
Okay, let's go ahead and jump into
those five business budgeting tools and systems
that you should consider.
And the first one is Novo Bank.
Novo Bank is an online banking tool
that is ideal for entrepreneurs, freelancers,
those who are self-employed.
And I actually personally use this app.
So I wanted to show you what it looks like on the inside.
And I use this app and this bank
as a way to set aside money for my quarterly tax payments.
So I keep it separate,
actually got that tip from the "Profit First" book
to make sure you don't accidentally spend your money
that you're setting aside for your quarterly tax payments
on something else in your business.
What's great about Novo is that it has no fees,
it connects to outside banks,
so it's very easy for me to transfer
from my primary business checking account
over to Novo and then back and forth.
And also it has a ton of integrations.
It has integrations into QuickBooks, Shopify, and Stripe
and there's a couple other ones on the app.
And I think that's just such an intuitive way
to look at things.
Now, the only drawback with this app
is that you aren't able to do cash deposits
or write physical checks.
So, if you are a cash-heavy business owner,
such as, you have a farmer's market stand
or something like that,
then Novo probably wouldn't be an app
that works best for your business.
Now, if Novo isn't the right fit
then you might want to consider Lili Bank.
Lili Bank is a mobile app that you can use.
There is no desktop version.
So if you really like doing things from your laptop,
this may not be ideal.
But it's perfect for freelancers,
you can set up a business income reporting
and you can also automate contributions
and set aside savings for things like taxes
or other business expenses.
The third tool that you should consider for your business
is QuickBooks Online.
I'm sure you've heard of it,
I personally use the Self-Employed QuickBooks plan
and I have no complaints.
You can track your expenses,
review profit and loss statements,
you can download a Schedule C transactions.
And the profit and loss and Schedule C transactions
are really great to have
if you work with the CPA to file your taxes.
You can download those documents
and send them over to your CPA,
it makes it really easy.
You can also get estimated quarterly tax payments
based on how QuickBooks integrates
with your business bank accounts.
It's going to tell you and give you an estimate
of how much you're going to owe each quarter.
And I do use that to help me figure out
exactly how much I need to be saving every single month
for those tax payments and then every single quarter,
making my payment on time.
Another thing that I like about QuickBooks
is that you can create invoices inside of the app
and then you can keep it branded to your business,
and it just looks really professional.
You can send them via email
or you can download those invoices as a PDF
and send them off to your clients.
So there's a couple of different pricing options
when it comes to QuickBooks.
So this is not a free tool
but it could be totally worth the cost to you.
So they have four different plans;
Simple Start, Plus, Advanced,
and then I mentioned the Self-Employed.
So, normally QuickBooks does have
a lot of different price offerings
and sales throughout the year.
And it looks like you can do free trial for 30 days
and then also get 50% off for three months.
So it looks like it's 7.50 per month for three months
and then it'll kick it up to $15 for the Self-Employed plan.
Now, if you're not ready to spend money
on online bookkeeping just yet,
then you'll want to take a look at Wave Accounting.
Wave Accounting is a hundred percent free.
There's not going to be as many
robust features as QuickBooks,
but it still can get you going and get you started.
Inside of Wave, you can create invoices,
monitor your business budget,
track receipts, and handle payroll.
You can also accept payments through the Wave app.
There's going to be a 2.9% plus 30 cent
credit card processing fee
and that's pretty standard
for any of these third party payment providers.
So you can do that inside of the app.
And then also you can have wave handle your payroll taxes
if you live in any of these states,
or you can do self-service for other states,
but this is going to be a add-on feature
and that you'll have to pay for.
So, $35 for the tax service states
and then self-service would be $20 per month.
The last budgeting system
that you should take a look at is FreshBooks.
I've heard amazing things about FreshBooks.
So it's definitely one that you'll want to consider
when you are looking at bookkeeping for your business.
A couple of the things that you can do within FreshBooks
includes create invoices, time tracking, project management.
You can also track your expenses and send estimates.
So inside of FreshBooks,
there's also a couple of different pricing plans
that you'll want to take a look at.
So for the Lite version,
it's just $4 and 50 cents per month.
You're going to get some of those
basic bookkeeping features,
but if you have more than five billable clients,
which a lot of us do,
then you'll probably have to bump up to the Plus,
which is 7.50 per month
and you can get up to 50 billable clients.
This pricing is pretty similar
to what QuickBooks is offering
in just their first three months.
However, you're going to get more options
and more invoicing choices when it comes to QuickBooks.
So, there's obviously a lot of different
business budgeting tools and systems that you can use,
or you can kind of customize
and pick and choose what works best for you.
But definitely take some time to research this
before you go ahead and sign up
for a year's worth of QuickBooks or another budgeting system
without even trying at first.
Now, me personally, I like to use QuickBooks,
I really like Novo.
And then I also like to just set up
my own basic business budgeting spreadsheet.
Literally, it's my own spreadsheet
in which I can track my income and expenses
and see everything in one shot
so that I can kind of use that as a reference
as I'm looking at what's coming into QuickBooks,
what's coming into my bank accounts
and making sure that everything aligns correctly.
Taking the time to do that is really going to help you
minimize unnecessary expenses in your business
and really help you make a plan
for future business financial goals.
Now, we have a lot of information and resources
for business owners, freelancers, side hustlers
who want to turn their side hustle
into a full-time business.
And you can check out all of those resources,
including the best business checking accounts
at thecollegeinvestor.com.