Best Finance Tools for Small Business Owners

If you own a small business—whether you call yourself a freelancer, solopreneur, independent contractor, or anything else—you wear a lot of hats. From finance to marketing to sales to customer service, you are the company. As such, anything that can make your life simpler and less stressful is a worthwhile investment—not only in your business, but in your peace of mind. 

When choosing finance tools for your business, there are a few categories to consider. Let’s start with the broadest—general accounting software.

Accounting software

Bookkeeping software is one of the most essential finance tools for small businesses. This software should make it quick and easy to get a bird’s eye view of your business’s finances, while also enabling you to drill down into details when needed. 

Accounting software is a broad category—these tools cover a wide range of functions and come in a variety of shapes and sizes to fit different budgets and needs. Here are some of the key features to watch for:

• Cloud access: Being able to access your books on the go is extremely convenient. We highly recommend looking for accounting software that has cloud access and a great mobile app.

• Built-in invoicing and expense tools: Many accounting software tools offer built-in invoicing and expense tracking. This is a plus—these are essential tools for any small business, so if you can get them all in one place, with all the features you need, then you definitely should. 

• Intuitive interface: Your software tools should be easy to use—especially accounting software. You don’t need complicated software causing issues in your books, and while “accounting software” sounds complex, it doesn’t have to be.

• Clear dashboards: Your accounting tools should make it easy to get a clear view of your business’s financial health. This means clear, easy-to-read dashboards and graphs to show you exactly what you need to know.

Business banking

One of the most important financial tools you can have in your toolkit as a freelancer or solopreneur is a business bank account. This might not seem necessary at first, especially if you’re flying solo. However, there are some serious benefits that come with having a business bank account:

• Accurately track cash flow and expenses.

• Access your money with a business debit card.

• Protect your business assets in the event of a lawsuit.

• Make ACH and bank transfer payments to other businesses.

• Project a professional appearance to clients, customers, and other businesses by having a branded business debit card and invoices.

• Keep your business and personal finances separate.

When choosing a bank account for your small business, you want to look for one with the following features:

• No overdraft fees: While you generally want to avoid overdrafting entirely, the reality is that it can happen sometimes. In these cases, the last thing you want to deal with is another fee. Look for a bank that charges zero overdraft fees or offers overdraft protection instead. 

• No minimum balance: Look for a bank account with no minimum balance. This helps ensure that you won’t be penalized during the early stages of your business, when you may not have a ton of cash floating around.

• Easy access: Your bank account won’t do you much good if you can’t get to your money. This means a debit card, ATM access, and functional mobile apps.

Expense tracking

Like it or not, expenses are a part of doing business. On the plus side, you can typically write them off as deductions on your taxes—this can help significantly reduce what you owe. To ensure that you get the most out of your deductions (and keep accurate records for the IRS), you need good expense tracking software.

Good expense tracking tools make it easy to:

• Categorize your expenses: This is useful to ensure that your expenses fit into one of the IRS’s approved categories. It also helps you see if you’re overspending in certain areas.

• Break down your totals across different time periods: Good expense-tracking software makes it easy to see your expenses over the last year, quarter, month, and week. It should also help break down categories across different time periods. This can be useful during budgeting and planning sessions.

• Calculate tax write-offs: Your expense tool should make it easy to see exactly how much you can write off on your taxes. Having a clear view helps ensure you report an accurate number to the IRS.

• Store and attach receipts: It’s always a good idea to keep your receipts and records of transactions. Your expense tools should have the option to attach receipts to the transactions to make retrieval easy.

Budgeting 

Having a clear and well-thought-out budget is vital to freelance and small business success. A budget helps ensure that you have the money you need, when you need it, and that you’re aware of where all your hard-earned dollars are going. A proper budget enables you to make decisions with confidence because you know exactly where you stand financially.

Some of the features we recommend looking out for in your budgeting tools include:

• The ability to set up custom categories: Many budgeting tools include preset categories for things like payroll, office supplies, and the like. However, these don’t always work for every business, so the ability to create your own categories is essential.

• The ability to set spending limits for each category: Once your budget categories are set up, your tool should give you the ability to set a limit on spending for that category. This helps you put guardrails in place.  

• Some form of alert as you approach your spending limit: Finally, your budgeting tool should give you some form of alert, warning, or other indicators as you approach your spending limit. You won’t always be able to avoid going over, but it’s still nice to be aware of the situation.

Budgeting isn’t just important for your business—having a personal budget can help ensure you steer clear of money troubles outside of work and frees up your mind to focus on your business. 

Payroll

Payroll is a critical business task. Whether your business structure dictates that you need to give yourself a formal paycheck, or you have employees that depend on income from your business, this is something that needs to be done correctly, every time.

The best payroll tools help you keep track of hours worked, calculate rates for those hours, and make it easy to send payments to the people that need them. For payroll, in particular, it’s also important that employees have access to the system so they can make changes and updates, while also restricting access to parts of the system that they don’t need to see.

Features to look for here include:

• Scalability: Your software should be able to grow with your business. This is true for any software tools you use, but especially for payroll, since it tends to be more complex and nuanced than other types of software. You don’t want software limitations taking focus away from your business.

• Good customer support: Payroll is a mission-critical function, and it can also be complex. If you run into technical issues, you’ll definitely want strong support available to get things up and running quickly.

• Ability to handle a variety of payment types: Your software should be able to handle whatever you throw at it, including direct deposit, vacation and holiday pay, sick time, bonuses, and more.

• Simple onboarding and offboarding processes: You don’t want it to be a chore to add, update, or remove employees from your system. The less friction here, the more time you can spend on valuable activities.

Invoicing

Last but certainly not least, your small business could definitely benefit from invoicing software. While it’s true that you could just create invoices in a spreadsheet or word processor, having a dedicated system to create invoices, send them, and receive payment can make your life a lot easier (and your business appear more professional, at the same time).

When selecting invoicing software, you want to prioritize:

• Ease of use: Your invoicing tools should make it simple for you to create and send invoices, and—just as important—for your clients to pay the invoices. Templates, shareable links, and the ability to accept online payments right on the invoice are all excellent features.

• Integrations with other tools and payment platforms: You probably use some financial tools in addition to your invoicing software. Your invoice tools should integrate with these platforms so that you can, for example, accept PayPal payments directly on an invoice, or automatically log the invoice in your accounting system.

• Scalability: Your invoicing software (and all your financial tools) should be capable of growing with your business—without breaking the bank. Many tools use price structures that charge significantly more as you start to use them more, which is not what we want here.

• Customization: Finally, you should be able to customize your invoices. Layouts, colors, styles, and the ability to add your logo are all nice features to help ensure a professional appearance that matches your brand.

Unlock your potential with the right finance tools

Whether you’ve been in business for years or you’re just starting out, having the right tools makes all the difference. The financial tools we covered here—accounting, banking, expenses, budgeting, payroll, and invoicing—will help you spend less time in the weeds and more time doing the work you love. 

Found’s business banking solutions are tailor-made for freelancers and small business owners, and they come with a slew of other essential features as well. Start taking advantage of them ahead of the new year to set yourself up for success!

This material has been prepared for informational purposes only.