Although you might be making enough money with your remote based business and if you’re a digital nomad, you might be doing more than enough to travel to places that you had never imagine you would go to, it’s critical that you keep track of everything to make sure you keep a positive ROI and achieve the business goals you’ve set as a target. Online bookkeeping and accounting software will help you do this independently of your location.
Not all services are created equal though, and there are different pros and cons worth discussing. You need to choose the right product or service to meet your needs, and in this article, we want to help you understand how to manage your remote business finances.
Why Managing Online Finances is Crucial for Digital Nomads
Truthfully, managing your finances as a remote based business or digital nomad is as essential as it would be for anyone else. You need to have a solid income source, and you need to have a clear cut budget for how you’ll manage your money while you’re out surfing the globe in case you decide to do it so. You need to make sure your expenses don’t exceed your income, which is why is critical to correctly calculate your cost of living & budget as a digital nomad.
Even when you’re living outside of the country, if you are a US citizen for example, you are still required to pay taxes in the US, so you need to keep track of everything no matter what. Proper bookkeeping is a critical part of your business and an excellent way for you to measure and observe your growth.
If you don’t have your finances in order, you won’t know if you have enough money to continue your nomadic lifestyle. Bookkeeping and financial planning are the keys to success for everyone working remotely.
Criteria to Consider When Choosing an Online Finance / Accounting Software
Generate a report with your business expenses? Send an invoice automatically every month to your clients? Besides these common accounting software functionalities, it’s also important to take into consideration “non-functional” requirements that will help you to work far more efficiently:
- Bank account integration & financial compliance: Avoid manual imports, excel comparisons or copy/paste scenarios by looking into a software that supports integration with your bank account and that complies with your business base country legal/financial requirements.
- Mobile access and portability: Having the ability to connect and check your finances on the go, or easily import your expenses receipts by just taking a photo with your mobile, etc. are some of those functionalities that will highly facilitate your day to day as a digital nomad.
- Security: You want to be able to connect and check your finance information only, but that also carry some risks. It’s then critical to choose a software that complies not only with legal, finance standards, but also offer certain security measures and validation.
- Dashboards, projections and insights: Accounting and finance software are not only useful to help reduce errors, but it can help you gain valuable insight into the performance of your business to analyse how to improve it further. Many accounting software have highly flexible dashboards templates that show you how your business is performing and create projections based on the historical data that will allow you to identify opportunities.
Besides the software functionalities & characteristics, consider those specific aspects that should influence your decision making process based on your business size, as they will likely have an impact on the software price:
- A solopreneur will not need the same accounting software as someone who is managing a remote team of 50 employees, right? That said, not all accounting software are cut out for managing payroll, benefits, and all the things that a “team-based” software can do.
- Small business payroll software like Quickbooks has many different programs in one, and it has tiered options that allow you to tweak the software to meet your unique needs.
- Business management software programs are more expensive, but they offer more features. These also include point of sale, inventory management, CRM, billing, and purchasing. This software is for larger businesses that hold inventory and purchase regularly.
Most Popular Online Finance/Accounting Software
Here are four of the most popular finance/accounting software available today:
This software almost seems like it offers big and small business accounting in one. With Xero, you get a real-time view of your cash flow. From the dashboard, you can look at your bank account balance over time, business performance, invoices, and total cash flow. You can do all of this from their mobile app as well.
Directly from Xero you can send and accept invoices. You can even see when the customer has opened them. Xero allows you to manage inventory, send purchase orders, manage and schedule payments, as well as 700 other tools.
The Sage software allows you to manage everything remotely. You can send invoices, monitor cash flow, import data, reconcile, report, and predict your business tax all from their dashboard. They offer a few different plans to meet the needs of every growing business. The main purpose of Sage is to send and receive invoices.
Freshbooks offers an all-in-one accounting and invoicing software you can manage from anywhere. The goal of this software is for you to spend less time on your business finances. With Freshbooks, you can automate tasks like invoicing, expense organizing, and time tracking. You can send incredible looking invoices, collaborate with other team members, and organize your expenses.
This software provides a wide variety of package options ranging from self-employed individuals to large corporations. With Quickbooks, you can manage everything from their easy to use dashboard. You can look at your current business cash flow, check out bank account balances, manage invoices, send payments, and schedule bill pay. It’s easy to keep everything organized and simple using Quickbooks.
Most Popular Managed Online Bookkeeping/Accounting Services
If you’re completely lost and you need someone to manage your finances for you, there are online based services that can help you as well:
Bench offers online bookkeeping services. The difference between this and the previous programs is these services are conducted by actual bookkeepers. They’ll give you a monthly financial statement and expense sheet so you can see everything that happened with your money. They provide a year-end financial package as well with everything you need to file taxes.
This software gives you an overview of your income, expenses, and profits. Beyond providing you with an easy to use dashboard to get an overview of your finances, they also have a dedicated team of accounting and bookkeeping experts to help you manage everything.
Pikohana closely resembles the Bench service. Here we have a highly dedicated team of bookkeeping professionals that will help you manage your finances by basically taking care of it for you. Their service is compatible with Xero and Quickbooks so you can use the two side by side to manage your finances and control everything yourself.
With Merritt, you get a team that uses Quickbooks to help manage your finances. With this, it’s only a bookkeeping service so you cannot do payroll or send invoices. You’ll have to do that yourself from the Quickbooks dashboard. Merritt then provides you with monthly financial statements, so you get a solid idea of how your business is performing.
Whether an accounting software or service, it’s time to keep track of your remote based business finances! If you found this post interesting, check out:
- Best Mobile Banking Apps and Online Services for Digital Nomads
- 6 Legit Ways You Can Make Money While Traveling the World as a Digital Nomad
- 5 Online Money Transfer Services for Digital Nomads & Remote Working Professionals
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