Financial Statements | equitybydesign

Why Go With QuickBooks When There’s FreshBooks?

February 1, 2012 by Monique Lusse 10 Comments

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Featured Article: Why Go With QuickBooks When There’s FreshBooks?

Two of my clients have asked me about FreshBooks. This is a great question, especially since they’re both in the startup stage of their business where they’re choosing which accounting system to go with.

So, here’s the short answer: FreshBooks is to QuickBooks like a tricycle is to Lance Armstrong’s racing bike.

And here’s the longer answer: It’s about having the right tool for the job. If all, and I mean all, you are doing in your business is selling your time, then FreshBooks is not a bad option. They’re tag line is “painless billing.” And, yes, it is indeed painless. I took it for a trial run, kicked the tires a bit, got on the phone and asked them a few questions.

Here are some of the salient differences between the two offerings:

QuickBooks offers nine different packages, (five online and four desktop versions) each one targeted to a specific phase in the business cycle. FreshBooks offers one package.

QuickBooks does everything that FreshBooks does…maybe not as user-friendly as FreshBooks, but it does it. The point is that FreshBooks does not do everything that QuickBooks does. FreshBook’s Evergreen plan, at $29.95/month is comparable to QuickBooks most basic plan, Online Simple Start, at $25.90/month. Their merchant solution plan is an addon, at $19.95/month. So FreshBooks is cheaper than QuickBooks for what it does. But here’s the deal:

you can go with FreshBooks now and really have a “painless billing” experience but when your business takes off and it comes time to scale up, guess what…you have to get some software from a third-party vendor to convert the FreshBooks data to QuickBooks. And that takes time and expertise.
or, you can go with QuickBooks from the get go and easily, effortlessly, and painlessly scale up to the more robust versions as you need to. It’s a classic case of “pay now, or pay later.”

So, in a nutshell, if you, the business owner, want to do it all yourself, plan to stay below the $300,000 per year revenue level, and are willing to accept a simple reporting structure, then I would recommend FreshBooks. But, if you are a startup with seven-figure plans for yourself and your business, and want detailed information to make the best forward-thinking decisions, then I recommend QuickBooks all the way.

If you have any questions or comments about this, please leave them in the “Leave a Comment” section below.

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How to Know What You Don’t Know About Starting Your Business

November 25, 2011 by Monique Lusse 4 Comments

Starting a business can be daunting; it’s not for the faint of heart. That said, it’s not impossible, either. But you do have to have a plan and you have to know where to start. I started my business, Equity By Design, in June of 2011 and was amazed at all the set up work that was and continues to be involved.

So what if you don’t know where to begin? You have a great idea on how to help people and you have a passion to bring your vision into the world, but you might be wondering what your next steps are.

The first thing to do is to start where you are. I know that might sound obvious, but let me explain what I mean. While there are very few things that I ever agreed with that came out of Defense Secretary Donald Rumsfeld’s mouth–I think that this might be the only one–he did convert into everyday language a complex philosophical truth when he famously said in 2002, “…there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns — the ones we don’t know we don’t know.”

So, here are a few first steps to building your mini-empire:

• Incorporate your business

It doesn’t matter what legal structure that takes–limited liability company, S-corp, C-corp, not-for-profit, limited liability partnership–just pick the one right for you and make it legal. This will not only protect your personal assets, but it will give you a more professional image with your clients and vendors. A GREAT resource for getting straight-talking legal information without all the jargon and “legalese” is Nolo Press. Check it out.

• Open a business checking account

After you get the paperwork back from your state, you’ll be able to apply for a Federal Employer Identification Number (EIN). With that in hand, you can then open a business checking account and apply for a corporate credit card. If you have employees, you’ll need to get a state ID number as well.

• Set up your financial systems

Please, please, please don’t skimp on this area. I know that when you’re just starting out, and more money is going out than coming in, you might think that you can put off the bookkeeping part. You might think that keeping track of your income and expenses on Excel spreadsheets is good enough and that keeping your receipts in a shoebox is just fine. Well, I’m here to tell you, it’s not. Eventually, you’re going to have to set up on QuickBooks (or some similar program). Sooner is better than later. It’ll actually cost you less to get set up in your first three months of business than it will to wait till the last minute before your tax returns are due. And you’ll be more relaxed to boot!

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