Personal finance software

You'll need to use personal finance software at some point if you plan to take your home internet business seriously and end up making some money.

However, don't leap in at the deep end as the chances are that you won't be making millions from day 1 and a simple bit of free software will probably suffice at first.

So let's start with the free software to begin with, then move on to more powerful products for when the dollars start rolling in.

Free personal finance software

A simple spreadsheet is probably all you'll need at first - recording income and outgoings - and a folder to organize your receipts.

When I started out, I also recorded tranasctions in a diary, so I had a linear, dated record of what was going on.

There are two free products that you need to be aware of.

Openoffice.org

Every small business needs to know about this.

It's free, Open Source software which will open Microsoft's documents and the documents it produces can be opened by Microsoft software as well.

It has a built in spreadsheet which is just like Microsoft Excel and is my free tool of choice.

You can also password protect your financial information, which I'd encourage you to do.

Google Docs

This is the second free business tool that you must know about if you're starting a home internet business.

It allows you to create and store document and spreadsheet files online, though you can also down load them and share them too.

They're secure and safe with Google, and I'd recommend this option particularly if you're in partnership and more than one person needs to access information at one time.

Read more about this free-office-software and find out about Zoho.com which also has many useful business tools.

Also look at Turbo Cash Open Source Accounting Software, which is also free personal finance software.

Top 3 'paid for' personal finance software

When the money starts to roll in - as we all hope it will - you'll find that there are just too many tranasctions taking place for you record manually, and at that point you'll need a system.

That will inevitably involve some paid-for software, but it needn't cost a fortune and many systems will give you a free trial period, which I suggest you use.

Here are three software programs that you may already be aware of, but which will crop up constantly as you read more widely about this topic:

Quicken

All roads lead to Quicken eventually and you should give it a try, though note that in the UK you need to look out for QuickBooks (see below).

They offer a USA Quicken Online version which is free and if you like it, you can move onto the software which ranges at time of writing from $40 to $100.

With Quickbooks there is a free download version, which isn't a trial, you can use it as long as you want.

Paid for versions of QuickBooks range from £90-£450 ... you need to be doing a lot of business to need software as costly as the top range package, so don't rush in before you really need it.

The key thing about this paid for personal finance software is that it has tax functions built in ... and when you're having difficulty working out your tax, it's either time to call in an accountant or get some kit to do the calculations for you.

You won't need this for a simple small business 'profit and loss' spreadsheet, but as you generate more customers and need to keep a track of an increasing number of income streams and outgoings, you really don't have another option.

Sage

Sage offers many solutions for finances, payroll, invoicing, franchising and so on and it's probably of more interest if you're thinking bigger than a small, home based web business.

However, they too offer free trial software and you'll see them come up regularly in 'best of' lists, so they're worth checking out.

Microsoft Office Accounting Professional

Interestingly, Microsoft Money has been discontinued as so many people are now providing accounting software ... including the banks of course, who you shouldn't overlook when looking for free software offers.

For Microsoft lovers, this is a step up from Excel in that it allows you to send invoices, track cashfow in and cash out, run reports and so on.

If you're familiar and happy with the Microsoft interface, and you're not planning on becoming the next Facebook or eBay, this is probably a good option for you, though at nearly £150 make sure you use the free 60 trial before you buy.

Getting started with personal finance software

I think there's a very clear progression to use when setting up accounting systems for your home internet business.

Firstly, use the free stuff while you're small ... you'll know when you're doing too many transactions to record them all manually!

Don't forget that the Inland Revenue has lots of useful free tools on their website and remember too that many banks offer free accounting software as part of their basic sign-up deals nowadays.

Once you're finding that you're struggling to keep up, take a look at Quicken, QuickBooks or Microsoft's products as they're suitable for small-but-growing business.

If you're thinking big, go for Sage or the higher-end Quicken and Quickbooks products as they meet the demands of a much more complex business, with multiple lines and income sources, complex invoicing and billing options and payroll among many other functions.

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