An important tool for the independent, solo business person is sole proprietor accounting software for small business. A sole proprietor is a person who practices their business alone. They have the drive and determination to attain their business goals and the ambition to reach for the stars. In this article we’ll go over how to find the best bookkeeping software for the self employed, sole proprietor.
Work Smarter With The Right Software
In some countries, sole proprietors represent up to a third of the workforce. These individuals are leaving the corporate world to work for themselves. Since they are on their own, they need to learn to leverage their time so that they are working smarter, not harder. Unless their specialty is accounting, the sole proprietor needs to focus on the business they do rather than trying to figure out their accounting.
The technology that allows many to make a career out of working at home also allows them to handle their accounting easily. Most self employed people do not have the time to sit down to figure out their cash flow, revenue, and expenses while also staying on top of taxes. Accounting software helps them with all of this.
Being A Sole Proprietor: Pros And Cons
- No boss to answer to.
- Flexibility of work location and time.
- Unlimited earning potential.
- Occasionally inconvenient work times.
- No work, no pay.
- No sick time or holiday pay.
- Responsible for all aspects of the business.
- Success is up to the owner.
- Lots of solitude.
Yes, there are sacrifices to being a sole proprietor. However, many feel these sacrifices are worth it to be able to be their own boss, answering to nobody but themselves and their customers, and making their own schedule.
The Online Sole Proprietor
Due to advancements in technology, many self employed people are excited about the future of sole proprietorship. Taking their business online makes everything just a little bit easier. Cloud-based or online software makes the process of doing business much faster and easier. Online or cloud-based software examples include:
- Office 365 or Google Apps
- Google Drive or DropBox
- Social media channels for marketing
The only thing missing from this list is accounting software for sole proprietors. If they have been able to move everything else online, why not the accounting? Having their accounting software, along with everything else, online the self employed business owner no longer has to be stationary to get work done. They are free to roam, move, and do things while still being connected to their customers.
Choosing The Right Accounting Software
Sole proprietors may be tempted to use Excel or Google Sheets to maintain their accounting but eventually they’ll have problems. These small business accounting spreadsheets weren’t created as accounting software. Difficulties will arise if a self employed business owner relies too heavily on spreadsheets to maintain their accounting. Here’s a few reasons why spreadsheets won’t work:
- Real-time accounting is not possible
- Spreadsheets require manual input, there is nothing automatic about it.
- One typo and the entire spreadsheet is off
- Not scalable.
- Spreadsheets cannot help the sole proprietor with payroll, direct payments, nor can data be shared remotely. Accounting software grows with the business and can handle these things.
- Spreadsheets do not leave an audit trail. An audit trail keeps track of all entries and who made them. Sole proprietorship accounting software does leave an audit trail – protecting you from fraud.
Sole proprietors know that running their own business requires finding the right tools to get a job done. Accounting software is an important factor in the success of a business; choosing the right one from the beginning is imperative.
Online Accounting Software Benefits
There are many advantages to using online accounting software for business. Some of the greatest benefits include:
- Can access from anywhere online.
- Features are simple and easy to use.
- No need to maintain the software.
- Updates are done on the back end by the software company.
- Data is automatically saved to the cloud.
- Secured data.
- Confidential data stored in cloud security.
- Easily share data when needed.
- Subscription cost – cheaper than a bloated upfront software cost with features the sole practitioner may not need.
Three Steps To Find The Right Accounting Software
We’ve gone over the basics when it comes to accounting software for sole proprietors, now lets get into the steps in finding the right one.
Step One: Ask For Recommendations
Networking with others in their industry, self employed business owners can find other owners to get their opinion on the software they use. Some owners have been in business for many years and can share their success and failures with accounting software. Another resource to consider is their own accountant or bookkeeper.
Step Two: Plan Ahead
Self employed business owners see the big picture. They have goals and the ambition to reach those goals. As such, they need to consider a solution that will grow with them and their business. This may be a software solution that has different tiered subscription plans. Starting off small is smart in the beginning as long as there is room for growth in the accounting software as the company grows.
Step Three: Free Trials
Many online accounting software companies will allow business owners to try their service for free before paying for a subscription. By trying out a service before spending any money, the sole proprietor is able to test every aspect of the service to see if it will work for them. For example, will it work with the process they use for small business invoicing? Will their current banking solution work with the software?. If not, they can move on to the next one without spending any money.
Successful Accounting Software Implementation
Once an accounting software is selected and implemented, the sole proprietor will notice that their business is running more efficiently. The right solution will help streamline the overall way they work. They will eventually wonder how their business ran successfully without it!