If you’re just starting off and you are just a sole proprietor, that does not have an LLC, S-Corp, or Corp (a business entity), then you probably don’t really need to use QuickBooks.  Stick with Excel.  You probably don’t have that much to deal with in expenses, accounts receivables, accounts payables, and most importantly payroll.  You can probably just track everything with one spreadsheet with multiple tabs.

However, once you start entering a stage where you need payroll, (where you pay yourself or other ppl), your totally and utterly fubar’d.  All of a sudden you need to constantly check your bank account balance and make sure you have the funds necessary to pay your taxes.  Scheduling the payments that you need to make for state and local taxes is an utter nightmare as well.  I tried doing this with excel for about 6 months, and ended up being late on payments, and never knowing how much I really had in my account.  QuickBooks helps with managing this chaos.   With its payroll features, it tells you when payments are due, what taxes you will owe and whens the best time to pay them.  In addition, with the payroll feature I can direct deposit my checks to myself and schedule out my payments.

The best feature I think, (which has been a life saver for me in this down economy) is tracking partial payments.  Several of my clients haven’t been able to pay full payments and i’ve been having to figure out what is owed to me.  With an excel spreadsheet, you need to be able to track your Net Accounts Receivables and what’s still owed.  This is no small feat for an excel spreadshee.  With QuickBooks, this is handled for you and you can also see all the receivables that have been over due for a month.

Finally, QuickBooks allows you to track time and create invoices.  Tracking time has been a great help to me to track my work on specific projects and determining whether or not I under bid or over bid my project.  I can run a report that shows me the extact time allocation per project for a specific period of time.  QuickBooks also allows this time to be added to an invoice, which you can print out as a pdf.  It even allows you to customize what the pdf looks like!

All in all, looking back I wish I used QuickBooks much earlier when I started my business.  It would have saved me a lot of heartache and pain.  I strongly recommend purchasing it, if you have a business entity.