Disclaimer: This post should not be mistaken as accounting advice. Please consult with your accountant before making any expense or tax-related decisions.
Are you thinking “but QuickBooks is a bookkeeping tool and Stripe is a payment processor”? Let me explain myself. If you’re a business owner, you have to juggle a lot of responsibilities, and with that comes a lot of tools. And if you’re not a business owner, you still have to juggle a lot and use a lot of tools. We’re all juggling!
Business banking
When I first established my LLC, I set up a separate online bank account to manage my business income and expenses. The large banks offer a lot of great options for small business checking accounts, but there are also a lot of great options for business checking accounts with digital banks. Some of these include Novo, Kabbage, and BlueVine. If you decide to go with a digital banking option (as I did), there are a few things to consider:
- Make sure that the bank is FDIC insured
- Check to see if the bank has integrations with third-party tools (such as QuickBooks). You don’t want to have to manually log your transactions into your accounting platform. Kabbage doesn’t integrate with QuickBooks (at least at the time of this post), and it was a pain to manually log my transactions.
- Confirm if the checking account allows you to create “reserves”. This is the ability to set aside funds in a sub-account, such as taxes.
- Check to see if they offer any other types of perks. For example, Novo offers a variety of discounts with their partners if you sign up for an account (including Quickbooks and Stripe).
Accounting platform
You’re probably already very aware of all the time it takes to manage taxes on behalf of you and your company. I decided to invest in Self-Employed QuickBooks early on because it automatically categorizes everything for me and gives me a quick snapshot of my income and expense situation. It also estimates my federal taxes for me, but it doesn’t estimate state taxes. Don’t forget to pay state taxes! I highly recommend using this or some other type of accounting platform.
One of the other key features that I liked about QuickBooks was the ability to track time and send invoices. QuickBooks actually functions as a payment processor and they will deposit the funds directly into your bank account.
This worked well for a while, but as my client base grew it became difficult to track all of my clients and their invoices, contracts, and documents. QuickBooks also doesn’t have a way to set up recurring payments (which is a pain if you have a subscription business model or product).
Customer relationship management (CRM) platform
I finally decided that I need to invest in a CRM that would enable me to centralize a lot of these processes. There are a lot of great platforms out there for freelancers and small businesses including Dubsado, Bonsai, and Honeybook (among countless others).
I personally was looking for a platform that offered the following features:
- A white-labeled client portal to access invoices and documents
- A platform that integrates with Gmail so that I can view all correspondence with the client in their customer record
- Ability to invoice and set up recurring payments (with the option for a customer to store a payment option and set up automatic payments)
- Workflow management (e.g. customer completes payment > thank you email automatically gets sent to the customer with login credentials to the client portal)
There’s really not a best option in terms of platform… it really boils down to which feature set best supports you and your business model. I ultimately landed on Dubsado.
Dubsado offers several options for payment processors, but I landed on Stripe for the following reasons:
- Stripe enables the customer to store a payment option and set up a recurring payment
- Novo (my current bank of choice) offers a Stripe perk
Summary
So here’s the flow (for illustration purposes):
- Customer record gets created in CRM and the customer pays the invoice
- Payment is processed on the backend by the payment processor (in my case, Stripe)
- Payment processor deposits funds directly into bank account
- Bank sends a record of the transaction to account platform
It’s important when setting up your business systems to ensure that you are selecting tools that best fit the needs of your business model and your customers. Selecting a tool that doesn’t provide your necessary feature set and that doesn’t integrate properly with other tools can cost you a lot in time and money.
If you need any help setting up the backend systems for your website, please feel free to reach out hello@zainatain.com and we can set up a time to discuss your needs.
