Are You Using Business Finance Software?

One of the clients I write for distributes financial software for small business. A common theme I use is that many small businesses use cobbled together bookkeeping. They combine consumer financial applications, spreadsheets, scribbled notes and shoebox filing systems because they feel their business is too small to need a complicated financial package. I respond that a business of any size needs professional bookkeeping software.

Don't you hate it when you are too dumb to follow your own advice?

Yes, I have a system that combines Quicken, two Excel sheets and my failing memory to keep track of my massive *cough* business empire. It has worked well until today.

My primary client was reconciling her 2007 taxes and asked how much she had paid me that year. I looked it up on my project spreadsheet and got one number and then on my tax spreadsheet and got another number. Uh oh. After some investigation I realized I over reported my 2007 income and overpaid my taxes by nine whole dollars!

If I had underpaid I'd file an amended return but I'm not going to bother over $9. Like so many things it comes down to hourly rate. The time it would take me to file the amended return would eat up the $9 in no time. I can't imagine the IRS will send me to jail for giving them too much money. There is a lesson here though. A real financial package would have prevented that mistake by correlating invoices with income. So one more thing to add to my to do list is "Buy financial software".