

Ask YC: Can you use QuickBooks to manage a software/iphone dev business? - rksprst

Quickbooks is based on having customers (for invoicing) and vendors. However as a web app/software/iphone dev company I can't manually enter in all the customers and we really don't have vendors.<p>Most of the expenses are reoccurring fixed costs (such as hosting, salaries, etc...) and I don't need to (usually) issue invoices...<p>I need to start keeping better records of expenses/income and am wondering if QuickBooks is the best solution? Or what other startups are using?
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spolsky
QuickBooks is reasonably priced and extremely mature. It does what it does for
reasons that you may not realize now, but you'll be extremely happy that it
does them after a few months, like, the first time you need to file corporate
income taxes, or the first time you get audited for payroll withholding.

If your only customer is the Apple App Store, well, you have one customer. You
certainly have vendors. Anything you buy for the business is bought from a
vendor.

If you're paying salaries, you have to calculate payroll taxes (and then pay
them). This is pretty complicated. Even the biggest companies outsource it to
companies like ADP or PayChex, who don't do a very good job. Intuit's payroll
service, built into QuickBooks, will do a great job of calculating payroll
taxes, withholding them, filing them with the government, etc. Don't try to
play that game where your employees are "1099 contractors." You WILL get
audited for this (we did).

You can try to roll your own accounting software, if your time is worth
$0.00001/hour, or you can just do what almost every other small business
does... use QuickBooks, learn how to do basic bookkeeping, and hire an
accountant to check in and make sure you're doing everything right. Tax
evasion is a pretty stupid problem to have, especially if it's not
intentional!

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plinkplonk
"use QuickBooks, learn how to do basic bookkeeping, and hire an accountant to
check in and make sure you're doing everything right."

At the cost of locking your data into QuickBooks, sure. Just be on the watch
for a "forced upgrade" every other year or so, with a different set of bugs
for every new version.

There is no way to recover your data from QB. if you don't mind being locked
into Intuit and paying them money every other year or so, go for it. But be
aware of what you are getting into.

And if your QB data gets corrupted there is always this -
[http://support.quickbooks.intuit.com/support/helpcenter/prog...](http://support.quickbooks.intuit.com/support/helpcenter/programs/data_recovery.aspx)

Due Discloure: I've worked for Intuit before and while I liked my coworkers
and even my bosses, I know what the code looks like, how customer support
operates and what their business practices are. There is no way in hell I
would ever use Intuit software for any business of mine. So I am prejudiced,
take my advice with appropriate doses of salt :-)

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patio11
I run a software dev business, too. My needs for accounting are simple: tell
me "Am I making money?" any time I care to check, and have substantiation for
numbers that I give the IRS every year.

I ended up rolling my own bookkeeping/accounting system, since my needs are
pretty simple (cash accounting, no inventory, etc). If they want to know how I
arrived at the gross sales figure (which is constantly updated automatically),
then I can substantiate that. I put expenses in by hand, with recurring ones
getting automated to the extent practical.

~~~
spolsky
How long did it take you to "roll your own"? QuickBooks pro was $199. Based on
the time you spent rolling your own, how much is an hour of your time worth?

~~~
patio11
Joel, 99.96% of the time I would agree with you here. However, I've got some
weird requirements that I was already doing development for. The big one was
producing charts for my website.

For the last 2.5 years I've been pretty free with my financial stats. I enjoy
doing that and I think it contributes to the success of my business -- for
example, one of the reasons I'm a moderator on your forum is that I'm pretty
open about things that did work and didn't. However, compiling financial stats
every month took a lot of time -- between bookkeeping and posting them to the
blog, that was 2 hours I was spending a month that wasn't directly selling
software. That makes it a compelling candidate for automation.

So about a year ago, I had the website start automatically tracking sales
(this required a quick extension to my IPN code that already maintained
customer records for me -- about 2 hours). Then, some months ago, I was
getting ready for 2008 tax time and figured, since I can already get the sales
stats for 2008 with a mouse click, if I just tracked expenses as well then I'd
be done.

It took about 3 hours to implement in Rails, and another 3 hours to hook that
into its own charts on my website, and about 4 hours to do 2.5 years worth of
data entry for expenses (which I was going to have to do no matter what
software I used).

But yeah, if I hadn't had the requirement "webify all of this" and didn't have
the pre-existing customer records, I would have picked up QB and called it a
day.

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paulsingh
Sure you can. Though, I'd probably recommend using Quickbooks Online instead.
It's relatively cheap and has worked just fine for me over the past few years.

A friend of mine uses QBO for his VC-backed SaaS company for the past 2 years
-- no issues on his end either.

