How To Do Your Bookkeeping Without Paying A Monthly Subscription Fee
Let’s talk about the elephant in the room: Bookkeeping software can be expensive!
Quickbooks is up to $30/month for the lowest tier and Xero is at $15 (as of the time of writing). That’ a LOT of money if:
You’re just starting your business
You run a very simple business and paid software would be overkill
You’re not going to take advantage of all the bells and whistles Quickbooks and Xero offers
So what’s the other option?
Go with something that doesn’t have a monthly subscription fee!
Option 1: Wave.
Wave is free bookkeeping software, and it’s really popular. And there’s a reason for that. It’s very good at what it does. I recommend it a lot! (You can find out if Wave is a good fit for your by taking my free quiz!) Of the “big 3” (Xero, Quickbooks, and Wave), it’s by far the easiest to use, built more for small businesses than for accountants or bookkeepers.
And. It’s still traditional bookkeeping software. Which means there’s a learning curve. And as simple as Wave is to use, it might still be overkill for your business.
Which brings me to:
Option 2: Spreadsheet-Based Bookkeeping
Spreadsheet-based bookkeeping is perfect for businesses who have simple bookkeeping needs. Meaning, they don’t need the fancy features of Quickbooks, Xero, or even Wave. All they need is a simple way to track their income and expenses.
If that’s you, Hi! 👋
If you’re handy with Google Sheets, Excel, or Numbers, you can absolutely set up your own spreadsheet. Or you can get right to work with my Beautifully Basic Bookkeeping template. Either way, here’s what you’ll need to do:
Step 1: Each month, download your bank and credit card transactions and copy/paste them into the spreadsheet (or enter by hand, whichever you prefer!)
Step 2: Categorize each deposit. If you don’t care about tracking different income sources, you can simply record everything as “sales”.
Step 3: Categorize each withdrawal. Every expense gets a category so you easily fill out your taxes at the end of the year (or send everything to your accountant!).
Step 4: Calculate your profit (the difference between sales and expenses).
Step 5: Put on your CFO hat for a 5-minute debrief.
Did you meet your revenue goals? If not, what can you do to improve next month?
Are there any expenses you can cut? (ex: software subscriptions you aren’t actually using)
What are your favorite ways to earn money, and how can you double down on those?
The Good News:
All of this is SUPER easy with my Beautifully Basic Bookkeeping template.
I built it in Google Sheets (soon to be available in Excel as well!) so there’s no new software to learn. All you have to do is copy/paste (or hand-enter) your transactions into the spreadsheet and then choose a category for each transaction from a dropdown menu. You can even customize the categories to your specific business.
Once you do that, the spreadsheet automatically calculates your profit and loss for the month and for the year as a whole. It also gives you a total of how much you’ve paid yourself! All without you having to do any of the math or learn any new software.
AND without any ongoing subscription fees. You can purchase it once and use it year after year (after year).
Here’s a 60-second demo of the spreadsheet:
(If the video is having feelings and not playing, you can click here to watch it, or click on the screen shots below.)
You can purchase the Beautifully Basic Bookkeeping template here.
What’s the Catch?
Now, to be fair, there are a couple of downsides to spreadsheet-based bookkeeping. (Just like there are downsides of fancy bookkeeping software!) They are:
No automatic downloads from your bank website. So if you have more than a few bank or credit card accounts, downloading transactions from each website could get tedious.
It’s a bit more prone to mistakes. Official bookkeeping software has a bit of built-in checks and balances. With spreadsheet-based bookkeeping, it’s a little easier to accidentally duplicate, delete or forget transactions. So, just make sure you’re be careful as you enter your info!
All that being said, though, keeping bookkeeping simple is key for a LOT of business owners.
Anything that makes the process overwhelming is just going to stand in your way.
