Ask YC: How do you deal with accounting/taxes/book keeping?

[paperwork]

I basically want updated answers to this question: http://news.ycombinator.com/item?id=163270

I hate paper work as well, with a passion. I almost always end up paying late fees for everything. I have an accountant and I have to send him a spreadsheet of transactions 4 times a year. I end up pasting my bank statement into Excel and annotating it with categories--it is surprisingly painful.

Being in New Jersey and often working in New York, I have to worry about taxes for two states. While so far I have been a computer consultant, I am now importing somethings and soon may have a web-app. All this complicates my taxes further. To keep things simple, I have my accountant do my personal taxes as well. For some reason, my accountant makes me feel like they are doing me a favor.

What do you folks do? Does it make sense to shut down my current corp., and start a new with with clean slate (make sure there are no outstanding issues: taxes, registrations, fees, paperwork, etc.) and record everything in quicken online and turbotax online? Are there tech savvy accountants who can lessen my pain? I have seen some ads which claim to offer 'outsourced accounting department' services...do I need to look into those?

[simonmic]

I periodically download bank csv and convert it (http://hledger.org/MANUAL.html#convert) to the hledger/ledger format (http://hledger.org , http://ledger-cli.org), auto-assigning categories (accounts) based on a rules file that I update as needed (typically one or two new rules per month). At tax reporting time I use hledger to total up each income/expense account for the reporting period, and I plug those numbers into my accountant's tax form generating app. After a few iterations, my chart of accounts has clarified and the process has become pretty routine.

[dcaylor]

I've learned to pay people to do the things they know well and I don't, and use the time gained to have people pay me for the things I like doing and am good at. Use an accountant, and be happy about paying them to do their job. Find an accountant who you actually like working with, and likes doing what they do. Then spend your time doing the things you are best at, the things other people are happy to pay you to do.

[davewasthere]

This is where we need something like oAuth to allow accountants to have access to our bank transactions.

I've been considering writing a little scraper to download my corporate transactions into a database regularly (similar to mint/lovemoney etc..) but so far, the quarterly pain of copy-paste hasn't been that big a deal (I keep up with it monthly anyway).

But a good accountant should take most of the administrative overhead away. Would recommend moving if they're not making your life significantly easier!

[andymoe]

I would buy yourself a copy of quickbooks. (I hate it too..) I recommend this for two reasons. 1) Most banks worth their salt allow you to download your transactions in a format quickbooks can understands. 2) It's the format that accountants generally work in or can import most easily. How much extra time do you think your accountant is spending getting your worksheet into quickbooks or whatever system they are using? A fair amount I'm guessing.

[beachaccount → andymoe]

I have never had an accountant that actually crunches my numbers, no matter what format I give it to them in. They just glance over my calculations and stamp their approval on it. I generally pay over $1000 for this service. How much do you have to pay for them to get them to actually crunch your numbers themselves?

[oogali]

QuickBooks Online. I give my accountant a login (Intuit doesn't charge for one CPA login), and they sort things out every quarter, end of the year, and in April, occasionally e-mailing me with questions.

QuickBooks imports my bank transactions daily, so the accountants have everything they need there, but they also cross-check against my actual bank statements at the end of the year.

Prior to a real accountant, I made a real mess of things, which they also helped me sort out. They handle both my business and personal taxes.

In New York, you can't shut down your current corp without a release from the Department of Taxation and Finance (makes sense) which you provide to the Department of State.

I asked my lawyers about shutting down and starting with a clean state, and they advised me to just sort things out and keep going rather than go through the hassle of shutting down and paying registration and publication fees all over again.

My accountants also have bookkeepers that can handle the quarterly/end-of-year filings on the state level, but I haven't pulled the trigger on that (though I will). I was told I shouldn't need a bookkeeper more than once or twice a quarter.

[paperwork → oogali]

Several people have advised against QuickBooks. What has been your experience? Did you try any of other apps?

[triviatise]

We use a company that has their accountants in India. They access our quickbooks file via a cloud server. It costs about 3K/month for a full time accountant (that is 40 hours a week).

Keep in mind that most accountants are actually tax guys. They can put things into categories and track the numbers but cant actually make any recommendations about how to structure your finances, your corporate structure, how to reduce taxes, exactly how you should accrue your revenue/expenses and what kinds of metrics you should use to monitor your business. It is helpful to get a CFO level person to set everything up and then you can get a lower level person to just crunch the numbers into the right places.

At the end of the year you will have a tax accountant do your taxes. Even within the tax guys there are tax guys that will simply calculate your taxes and ones that will help you to optimize your taxes.

[garethsprice]

Check out http://www.lessaccounting.com - they're a SaaS app with a service component where you can hire a bookkeeper to manage the bits you don't want to deal with.

[almightygod → garethsprice]

+1 for lessaccounting - swell guys

[tomgallard]

(In the UK) . I use an accountant who charges £60 per month for doing everything that needs doing (bookkeeping, annual filings, self-assessment, tax planning) for a VAT registered Ltd Co.

They use an online account package (http://www.accountsportal.com) which automatically pulls all transactions from PayPal, and I then send him all invoices etc in PDF form monthly, as well as a downloaded CSV of my bank statement.

Accounts Portal is pretty neat too, in that I can log on at any point and see all the financial details I need about my company.

Works out pretty well

[shaggyfrog]

I'm using GnuCash, which is free, but its interface is really shit. However, it does handle doing business in more than one jurisdiction at once, so it has that goin' for it, which is nice.

Are these ads you're describing talking about handling day-to-day bookkeeping, or tax return kinda stuff? DTD bookkeeping can be expensive (I do it all myself), but I have an accountant do my corporate tax returns (and help me with tax credit claims). I'm not sure how an "outsourced accounting department" will compare, especially if they are offshore (which would be a giant red flag).

[modoc]

There are tech savvy accountants, and/or small business/startup savvy accountants. We tried handling it ourselves but that was a terrible plan: we didn't know about every little business tax we should have been paying, the whole double entry stuff and when you recognize money versus when you actually get it is totally bizarre to me. We now engage a small accounting firm focused on small businesses, who handle our bookkeeping, cash flow analysis, invoicing, taxes, CFO duties, paying the bills, etc... It's great!

[paperwork]

I think part of the problem is that I need to change my accountant. I have heard horror stories about trying to move records from one accountant to another.

Does any one have any advice regarding switching accountants? What should I look for in a good accountant for someone who's business involves computer consulting, (hopefully) web apps, import/export of physical goods (selling ebay/amazon/shopify etc.)?

[bendauphinee]

I built a little page to insert transactions into a database. I scan all my receipts, and drop them in a folder, named as the transaction number a la 12512.png. I've expanded the webpage a little to have the categories that my accountant uses for taxes, and I pay an assistant to run through my statements a few times a year and just do the basic data entry.

[prashantganti]

Hi,

I am Prashant from Zoho.

You can try Zoho Books(http://www.zoho.com/books). We designed it keeping people like you in mind. This being an online software you need not go through the rigmarole of e-mailing spreadsheets to your accountant. You can just add him as a user and he can review your transactions online.

Regards Prashant

[pvaughn]

We use the hosted version of Quickbooks and contract with a bookkeeper and an accountant. There is enough red-tape involved with running a company that we found it easier to just pay someone to take away the pain. We also chose quickbooks b/c we didn't want to be too innovative on something that wasn't strategic to our business.

[Keyframe]

IN/OUT invoices, bills and bank statements to an accountant which sets everything straight. For my own sake, I keep an excel sheet (KISS) with IN/OUT balance, that's about it.

I'd have to buy an application if I had large volume sales, but since I'm dealing with only a couple of invoices and bills per month, I don't need it.

[WilliamChanner]

I also recommend http://indinero.com - which went through YC.

[theguvernor]

I personally just hand over all my receipts and bank statements to my CPA and tell him to get cracking. He works hard for the money.

I'll also add that i 110% agree with "pitdesi" about staying away from Quickbooks. ESPECIALLY ON MAC!!! Their support/documentation is horrible and the lockin sucks.

[makethetick]

https://indinero.com might be worth looking at.

[uptown]

I pay an accountant. It costs a lot, but leaves me free to worry about the stuff I know how to do (technology) and not worry about missing or screwing up financial filings. It's worth the price.

[there]

i use corduroy (http://corduroysite.com/ - fd: i wrote it) which is able to talk to hundreds of online bank sites just like quicken/quickbooks. i use it to import my bank and credit card transactions every day and categorize them. when it comes time to do taxes, i do them myself with turbotax online and just enter the totals from each transaction category in corduroy. i've done this for the last 5 years with my llc.

[programminggeek]

I really enjoy using Xero over Quickbooks, but I admit that QB is probably cheaper in the long run. Xero makes import easy and overall is a pretty enjoyable experience.

[scrumology → programminggeek]

Another vote for Xero. I started using Xero about 2 months ago and they're fantastic. They integrate with Paypal (a must for me) and many of the larger banks.

I use a small Australian bank for my business (Bendigo Bank) and I can import the transaction data relatively painlessly. Xero's ability to create rules for automatically reconciling the transactions is a real winner.

Before using Xero I used Excel and that worked but it took a lot of time ... about 2-3 hours a week. Xero automates a lot of that work and now it takes me about 2-3 hours a month.

[philiphodgen]

Don't look at this as "What's the best hammer to buy?" You are buying a result--clean accounting that will let you see your business in operation and figure out if your business is doing well or dying.

As others have said in this thread (and elsewhere) you should not be the person who does this. You are not competent. I don't care who you are. (Disclosure: I am a tax lawyer. I did my payroll tax returns exactly once before concluding I should not do this job.)

That means you need to hire someone. Solve your "What software should I buy?" question by instead asking "What software would allow me to hire competent, reliable bookkeepers efficiently, quickly, and cheaply?"

That's Quickbooks.

I use Quickbooks because it is trivially easy to hire a competent bookkeeper from Craigslist to keep things up to date.

If you use any other software you will have a harder time hiring a bookkeeper. You will then have to ensure that the bookkeeper is competent on the software you selected (who is going to judge this--you? Unlikely). You will probably have to pay more for this person.

All of the other vendors have nice products. But they are missing the boat on how to defeat Quickbooks.

Accounting requires a basic level of understanding, and it requires time. Both of those factors tell me that a business owner should not do his/her own accounting. Hiring an accountant/bookkeeper is essential to success.

An accounting software vendor should design software that is easy for an uncredentialled bookkeeper (i.e., not a CPA) to use. Then you'll have a zillion people at $25/hour willing to do bookkeeping for small businesses. That will make it less risky for a business owner to choose not-Quickbooks as the software to run the business on. That in turn will eat into the Quickbooks market share.

Don't focus on the end user (the small business owner). Focus on creating an extremely cheap service provider ecosystem to your end users.

I don't think you can sufficiently dumb down accounting software to allow a random business owner total safety in running his/her own books. There are too many edge cases in tax and accounting, and the random business owner does not have the radar to know whether he/she is an edge case or not, and what to do about it.

I don't do my own tax returns. I don't do my own accounting. I use Quickbooks on Windows (dedicated old PC for this in an office full of Macs) because Quickbooks on the Mac is shit. I sit down every other week with my bookkeeper and go over the last 2 weeks of activity line by line. Actually sitting down and looking at money in/money out has been The Most Important Thing I've Ever Done in the department of having a profitable business.

[josh33]

Outright.com

[pitdesi]

I would strongly advise against Quickbooks because of how terrible Intuit is to work with... I can't support that company at all - they have evil business practices. In our business, Intuit locks Quickbooks customers in to their extremely expensive processing solution, with no API to get transactions in or out.

A few great startups to try - I've heard good things about all of them.

http://Outright.com - $10/mo

http://waveaccounting.com - Free (double entry accounting).

http://lessaccounting.com/ seems to have a good interface - $30/mo

Intuit has put a good deal of lobbying money towards blocking proposals to have the federal government send you pre-filled out tax forms that would make everything much easier. http://www.npr.org/templates/story/story.php?storyId=9112083 http://www.techdirt.com/articles/20100723/09055310339.shtml They put a million dollars to Republican Tony Stricklands campaign for California Comptroller because the other guy wanted free e-filing http://www.consumercal.org/article.php?id=127

[mvip → pitdesi]

+1 for LessAccounting. We've been using it for a few years now and it works fine, and you can export your bank statements into it.

Recently we just brought on a 'real' accountant to audit our accounting and prepare reports (after a few years of pro-bono from accounting friends). Hence we are still working out all the details, but I'm pretty happy with the workflow if it pans out.

[sant0sk1]

Please don't disguise your referral link behind a url shortener. It is pointless and insulting.

[sant0sk1]

The referral link does not insult me. The obfuscation of the referral link does.