Bookkeeping: YNAB vs. QuickBooks


Show Notes

What are some good tools if you want to get started keeping the books of your business?

Steve and Tyler discuss YNAB and QuickBooks: their strengths and weaknesses, their similarities and differences, and ultimately which one you might want to choose for your business.



[00:00:00] Tyler: So Steve, as you know, I work with people on their personal finances. If you had to guess what budget category people most often overspend on a monthly basis, what, what would you say it would be?

[00:00:13] Steve: Well, for my family, it's like either groceries or eating out depending on the month. So I would say one of those.

[00:00:21] Tyler: You fit the mold! It's almost always groceries and almost always by a factor of a few hundred dollars. People, you know, a few hundred dollars more than they think they will on groceries every month. It's pretty, pretty amazing.

[00:00:34] Steve: Even knowing how much they spent on groceries the previous 6, 12, 18 months,

[00:00:39] Tyler: Right. It's very aspirational. It's like, I know I spent this much on food last month, and I know it's more than I wish I spent on food, so

[00:00:45] Steve: it back this

[00:00:46] Tyler: yeah, yeah, yeah. So I've developed a little trick for myself to help out with this problem, and it's one of the nerdier things that I do with my budget, which is saying something, and that is whenever I get to my favorite grocery store. It's kind of a specialty store. They have lots of fancy cheeses and meats and specialty items that I just can't, you know, I just very tempting for me to just throw it in the cart cuz it looks delicious, you know? Anyway, as soon as I pull into parking lot, my phone gives me a location-based reminder to open my budget and look at it.

That's it, it's that simple. And then it also prefills a transaction entry for that store in my YNAB budget. So that when I get to the cash register, it's already there. It's just sitting there waiting for me to type in the number. When I see the amount.

Now, I wish I could say that this had solved the problem and that I never overspend on groceries. But anyway, it's a cool little trick that's kind of helped keep, keep grocery spending front of mind.

[00:01:45] Steve: That is a great little trick. I, I like automations like that and iOS shortcuts and things like that. I learned one today, which is that you can have it trigger an automation based on reading an NFC chip. Like if your credit card has the. Tap to pay thing on it. You can have your phone read that chip and kick off whatever automation you want to, which is super cool. I didn't know I could do that.

[00:02:11] Tyler: so scan your credit card.

[00:02:13] Steve: I don't know if I'm gonna use it, but,

[00:02:16] Tyler: Well, you should try it out and let us know how it goes. That could be really useful for budgeting too. So like if you spent, make a transaction on your credit card uh, scan your credit card, pops open your budgeting app and makes you enter in what you spent.

[00:02:28] Steve: mm-hmm. It might work because I often like to use Apple Pay and I don't know that there's a way to do that sort of an automation with Apple Pay, but my favorite grocery store here in Texas, which is H-E-B does not support Apple Pay. So you have to have your physical card. So that would work there.

[00:02:46] Tyler: Saved by a limitation. Saved by a restriction. Love that.

[00:02:50] Steve: Hello there. I am Steve.

[00:02:58] Tyler: And I'm Tyler. And this is It's Not About The Money, where we discuss a wide range of topics related to creating and running small businesses.

[00:03:06] Steve: The two of us are small business owners ourselves, and we're just trying to make sense of the world, one podcast at a time.

And today, as Tyler teased last time, we are gonna dive into some of the nuts and bolts of how to actually do bookkeeping for your small business. We're gonna talk about two different tools that might make sense for you. And so as we're going along, you can listen for what are the strengths and weaknesses, the limitations of each of these tools, and kind of see if one of them makes sense for you to try out.

[00:03:39] Tyler: So Steve, what are the two tools that we're talking about today?

[00:03:42] Steve: Well, one of them is, you've heard us mention it many, many times because both of us love this tool. It's called You Need a Budget or YNAB. That's one of 'em. And the other one is also very well known in the business world, which is QuickBooks Online.

[00:03:58] Tyler: So, as Steve mentioned, we both have extensive experience with YNAB in our personal finances. I have zero experience and almost zero knowledge about QuickBooks. Steve, what's your experience been with these two apps?

[00:04:11] Steve: I have used YNAB for many years now as well. For my personal budgeting and I've also used it for my businesses. And then QuickBooks. I have mostly just started using since starting this tax business, so I'm a little bit newer to QuickBooks, but I do have some experience so I can give you some answers there.

[00:04:39] Tyler: What you know so far.

[00:04:41] Steve: Yes.

[00:04:41] Tyler: Okay. Okay. So if you don't mind me asking, which tool are you currently using for your tax preparation business?

[00:04:50] Steve: Well, that's complicated. I'm using both actually.

[00:04:53] Tyler: Okay.

[00:04:53] Steve: so we'll get into why and, and what I use each one for.

[00:04:59] Tyler: Sure, and I'll just say right up front here that I am currently using YNAB to keep the books for my business, so I'll bring that perspective. Exclusively. I'm not using quick QuickBooks or anything else

[00:05:10] Steve: Okay.

[00:05:10] Tyler: so.

[00:05:13] Steve: So why don't we start with an overview of what is each one of these made for, what was it designed for, and what is it really good at? Do you wanna take YNAB?

[00:05:24] Tyler: Sure. So YNAB is made for personal and family budgeting. I think that's like its primary purpose for existing. And it's really good at that in my completely unbiased opinion. It's the best budgeting out there for most people for their personal finances. And I've written several blog articles about why, maybe I can link some of those in the show notes.

But it's basically a budget that is, or sorry, YNAB is basically a company that is devoted to this one purpose creating software. And a methodology that makes it easier for people to budget. They know it's hard. They know that people struggle with their personal finances and they've really set out to solve the problem in an approachable way.

And so some of the things that are strengths of YNAB, and it's not just the app, I should say, but it's the entire methodology that YNAB developed first before the app even existed. The founder of YNAB was applying these principles in the spreadsheet and then just made an app later to make it easier. What it's really good at is helping people identify and understand their priorities through their spending and through their money.

It's a really great decision making tool. So as you use it, you're kind of confronted with the limitations of your personal finance and it kind of forces you to make decisions about what's most important to you and how you wanna spend your money. It doesn't take, although it embraces scarcity as a fact, like unfortunately we don't have infinite money in our personal finances. It uses that the psychology of scarcity to kind of help you succeed with budgeting instead of, you know Approaching it from a restrictive point of view. Like, oh, we can't spend money on this thing that we want to spend it on. Instead, it says, actually, you can spend money on what you want to spend it on until it's gone, and then you need to stop.

And so it, it's really freeing for people that way. I think it has a really nice approach to how hands on. You should be when you're managing your personal finance and like imagine a spectrum where on one side you've got very pa-- like you're doing nothing, right? You, you, you have a budgeting app like Mint or something that's retroactively showing you what you spent your money on, but it doesn't require you to do anything to input anything, to make any decisions.

That's one end of the spectrum. On the other end of the spectrum might be something like a spreadsheet. Or maybe QuickBooks. I don't know. We haven't talked about it yet. I you know where it's like a hundred percent you, if you don't do it manually, it's not happening. Right? Or if you don't write a formula for it, it's not happening.

YNAB is right in the middle where they have a, a nice set of automations but they still want you to just have your finger on the pulse of your personal finances, manually approving transactions, and kind of categorizing them, although there is some automation built around that. So I call it like the Goldilocks, well, I don't call it, you've heard of the Goldilocks principle, right?

It's not too, too mu--, not too hot, not too cold. It's just right. I think YNAB really, really nails that. And then lastly, but not least, I think YNAB is just really fun to use. They've got a really cool ethos as a company that's kind of fun, kind of quirky. Takes the stress and anxiety out of personal finance, and I think that serves them really well.

[00:08:47] Steve: Okay. That's great. I will agree on that last point, especially that it's fun. I've mentioned I use both of these YNAB and QBO and I enjoy when I get to use the YNAB aspects of it for my business just cuz it's fun and what QBO I kind of dread like that happens maybe once a month just because it's on the todo list.

It needs to happen, but it's not something that I look forward to so much. So that's interesting. Hopefully this doesn't turn into like a YNAB ad, but anyway.

[00:09:18] Tyler: Oh,

[00:09:19] Steve: We both, we both love YNAB. And, and, and hearing you explain it as a tool for identifying and understanding your priorities makes it sound like YNAB is, is uh, not about the money.

Ha ha.

[00:09:33] Tyler: Oh my gosh, you're so right and it's so true. Anyway.

[00:09:37] Steve: you didn't plan for me to say that that

[00:09:38] Tyler: no,

[00:09:39] Steve: anyway.

[00:09:42] Tyler: And I, and I can also mention what it's, you know, so it is made for personal and family budgeting. It's not purpose-built for business finance or for business bookkeeping.

[00:09:50] Steve: and there are some limitations there, and we'll talk about those in a minute,

[00:09:54] Tyler: Yeah.

So what about QuickBooks? What is it made for and what is it really good at?

[00:09:59] Steve: Yeah, QuickBooks is, so I use QuickBooks online. There's also a desktop version, but QuickBooks Online at least, is purpose-built for small and mid-size business accounting.

Once you get above mid-size and like enterprise level, QuickBooks is not gonna help you very much. There's other tools that are better for that. But the listeners of this program are, are in that range where QuickBooks might work for them. They even have a plan that, I forget what it's called, but it's like a, it's like a solopreneur plan.

So the things that QBO are really, is really good at is it has tools for running like almost every aspect of your small business finances that you might need, all the way from expenses: managing, you know, it can import bank feeds automatically and it can do--, it has some automations around categorizing things like YNAB does.

But then, then beyond that you can do invoicing in there. You can set up products that you sell or services. You can have it track your mileage with the mobile app so you can see if you have to visit clients, that kind of thing. You can have the app do all that automatically, and then you can just review them later and say, this one was a business trip, or this one was personal, so ignore that.

Which is nice come tax time. Cause you can take mileage deductions for those things. You can even have it do payroll uh, paying contractors. Like there's, there's a whole bunch of stuff

[00:11:35] Tyler: Wow.

[00:11:35] Steve: In QBO. So if you need all of those tools, then it's, they're all available under one package, which is nice if that's what you need.

[00:11:45] Tyler: Yeah. So you mentioned it's good for small and mid-size, mid-size businesses. I don't know if you heard this, but in the recent FTX scandal, it came out that FTX was using QuickBooks. I don't know if that's true. Do you know anything about that? People were kind of making fun of them.

[00:12:00] Steve: true either, but, but yeah, that was, that was what they said. And they thought that that was ridiculous that such a, a large company managing so many assets would be using QuickBooks.

[00:12:12] Tyler: Well, we saw how that ended, so,

[00:12:15] Steve: Yeah.

[00:12:16] Tyler: but not blaming QuickBooks. Sorry. You know that's,

[00:12:18] Steve: Right. Yeah. QuickBook. Well, and the, the guy even said in that testimony before, what, Congress, was it?

Like QuickBooks is a great tool, but not for this size of an enterprise.

[00:12:29] Tyler: yeah. Yeah.

[00:12:30] Steve: Yeah. Okay. So that kind of covers it. YNAB is purpose built for personal and family budgeting, but you can also do business budgeting with it. QBO is made specifically for small and mid-size business accounting, but it's also can be really complicated depending on how much of it you need.

[00:12:47] Tyler: Great. So. Maybe we can take a second and talk about some practical things that we have to do as small business owners and how that might look in YNAB versus QBO. And one of the things that comes to mind is how to set aside money for taxes.

[00:13:05] Steve: Mm-hmm. Almost everybody needs to do that. If you're a solopreneur and you have a W2 job, you can often like increase your withholding at your employer. They can just take a little bit more outta your paycheck to cover your business profits, and so you don't have to pay estimated quarterly taxes. But if you're not doing that, or if you make a lot from the side gig, then you're gonna need to pay estimated quarterly taxes. And so setting aside money as you go throughout the year is the best way to make sure that you have enough to pay those taxes when they come due.

[00:13:43] Tyler: Okay, well I can talk briefly about how that would look in YNAB and then maybe you can explain how it works in QuickBooks.

[00:13:49] Steve: Okay.

[00:13:51] Tyler: So there's basically two approaches you can take to doing this in YNAB. You-- The first way is just to categorize all of your income into the ready to assign category in YNAB, which is where money goes before you put it into a budget category, and then you could make sure that you have a budget category for taxes and from ready to assign, you just assign however much you want to into that category.

The other way to do it is to classify your income as a split transaction where the part that you wanna recognize as income goes into ready to assign, and then you have, you split that transaction into two transactions. And the, and the second transaction would be setting the money that you wanna set aside for taxes.

And the only difference between those two things really is the, in YNAB, YNAB only counts money that goes into the ready to assign categories income. So if you did it the first way, your income reports would show a higher amount, because it would not be less the money that you've set aside for taxes. But if you split the transaction into ready to assign and taxes, then you'd kind of get a more estimated net income in your reports, as opposed to gross.

[00:15:07] Steve: Okay. And if you are using reports from like your payment processor, which we talked about a little bit last time, as your source of truth of how much income came into the business, then it doesn't super matter whether the, the YNAB reporting of total income is accurate.

[00:15:25] Tyler: Exactly. So that's what I do.

[00:15:27] Steve: As far as taxes go, at least.

[00:15:28] Tyler: Right. So that's exactly what I do. I use my payment processor as a record of all of my income. So I don't use that report right now for income. So it's, I guess it doesn't really matter for me. I actually do the first of the two methods that I mentioned that is, just put all the income and ready to assign and that I do set aside money into a budget category for taxes. From there, pretty straightforward.

[00:15:54] Steve: Okay, that's good. In QuickBooks, you can do a similar thing where you've got a, a category, they're called accounts in QuickBooks. An account might mean a category in the YNAB terminology, or it might mean like an actual bank account, but they're all treated the same way at a high level, so you can have a separate account that is holding the cash for paying your taxes, and then when you actually pay them, it comes out of that account to get sent off to the government entity that's collecting them.

That's also a common way of handling sales tax as well, because you've got some of the, if you're selling something that is subject to sales tax, part of the income from that was the sales tax you collected from the customer that you are just holding onto until you remit it to the government entity.

So it's not really yours. You want to keep that separate.

[00:16:57] Tyler: Okay, so you mentioned that YNAB calls, budget categories, QuickBooks calls accounts.

[00:17:05] Steve: Yes.

[00:17:06] Tyler: Are there any other concepts, I guess you could say from YNAB that that map to QuickBooks in their terminology that are worth talking about, you think?

[00:17:20] Steve: That's the main one. Uh, When you get into reporting, there's a thing called a profit and loss report, and YNAB calls that an income expense report, which is also a, a common accounting term for that. But they both have that concept. QuickBooks also lets you look at the account register of your bank account so you can do reconciliations.

[00:17:46] Tyler: Mm-hmm.

[00:17:47] Steve: Is similar to how they're done in YNAB, although I actually kind of, well, I'm of two minds about reconciliations in QBO. One thing that's nice about them is that it lets you put in the account balance and a date.

So you can take a statement that may or may not be from today or yesterday, it might be from two weeks ago, but you can still use the balance on that statement to reconcile the account up through that date, which is cool. In YNAB, you can only reconcile up through the present moment, which sometimes gets me in trouble with with some of my banks or credit cards where like the transactions haven't necessarily landed yet, but I have 'em in YNAB, and so it's a little hard to tell Did I miss a transaction or is it there? And YNAB just hasn't imported it yet.

[00:18:44] Tyler: yeah. Are you aware of the feature in YNAB that shows you your running balance on each, on the transaction level?

[00:18:53] Steve: Yes.

[00:18:54] Tyler: Okay. I wonder if that would help with that at all

[00:18:57] Steve: It does sometimes. But the, the other thing is if I entered a transaction manually in YNAB and it had a different date on the bank statement, then the, the balance might be off because I edit added it two days before it actually cleared on the credit card or whatever.

[00:19:16] Tyler: Mm-hmm.

[00:19:18] Steve: So sometimes it's helpful, but not always.

[00:19:21] Tyler: I am restraining myself right now from going into troubleshooting mode, but that's good. Yeah. Yeah, that's a good point.

[00:19:28] Steve: Yeah.

[00:19:30] Tyler: I've had clients who, to whom it is very important to make sure the date in their YNAB register matches the date that the transaction cleared in their account.

[00:19:39] Steve: Ah-huh.

[00:19:40] Tyler: Some people don't mind if it doesn't match at all, and other people wanna have it be the date that they made the transaction, whether regardless of when it cleared.

Right. And I think that just comes down to per personal preference. All the, in personal finance, I don't know if it would matter. From a tax perspective or anything? Probably not though. As long as it's in the same month

[00:20:00] Steve: it's in the same accounting period.

[00:20:02] Tyler: period. Yeah.

[00:20:03] Steve: So if you're like January to December. If anything happened before December 31st, it needs to count for that year. Whether it,

[00:20:10] Tyler: Yeah.

[00:20:12] Steve: Yeah. But beyond that, it doesn't super matter. Okay. So let's talk a little bit about what your tax pro actually needs to see from your books, because that's because what, that may be something

[00:20:27] Tyler: Because they don't care about anything else. No.

[00:20:31] Steve: Because that is potentially a deciding factor in your decision here,

[00:20:37] Tyler: Yeah. Like how it, how, what does the accountant need to see, or the tax professional, what do they need to see and how easy is it to generate that in each system?

[00:20:47] Steve: Right. And the TL;DR here is that there, you can do this in both of them for the most part. It's just gonna look a little bit different.

But the main things that your accountant will need when they're preparing your taxes are the income and expense report, or the profit and loss report. That's gonna show where the income came from and potentially what categories it's in, and then where the expenses went out and what categories they're in.

And that's the primary part where you, you have to break it out on the tax return. What categories were the expenses? So that's the primary thing they need there. And then sometimes they may need to see the transaction detail because if you've categorized things a little differently, then they need to be on the tax return, then they might wanna look at the transaction detail and say, okay, I see why you did this for your business accounting, but for the tax purposes, we need to put it on this other line instead. And so they can move things around a little bit. So that's one.

The other one, which is less common if you have a service business, but you may have assets or that, that have depreciation on them. So this could be something like you bought a laptop computer and it has a, an accounting life. You know, in my air quotes here of five years. And so you get to, if it's exclusively a business-use item, you get to depreciate it over those five years, which means you take-- You take some of the value as a deduction each year until you get to the end of the fifth year and you have used up all the depreciation.

If you don't have a lot of assets, you can track those all on the tax return. Your tax pro can do that, and it doesn't need to be in your accounting software. YNAB does not have a facility for this. Well, I guess it could if you got real fancy, but there's, there's not a built-in concept for this.

QuickBooks does have one. So if you've got a lot of assets, then that might be a better choice for you. But if you don't have many, you probably don't need to worry about it and your tax pro can handle all that.

And then if you drive a personal vehicle sometimes for business and you wanna be able to deduct, to deduct those miles as a business expense, you need a good log that was made contemporaneously, meaning at the time that you took the trips.

And QuickBooks, the mobile app, has a really great way of keeping track of that, but there's lots of other apps as well. So if you don't use QuickBooks, but you still want mileage tracking, you can find a whole bunch of apps that will do that for you, either automatically or with some degree of manual intervention. So that's primarily what the Tax Pro needs out of it. And I think, I don't know, tell me if I missed anything, but I think we covered. YNAB and QBO can do those things with some caveats.

[00:23:51] Tyler: Yeah, I actually wanna read something I found on YNAB's website on this topic, if that's okay. It's

[00:23:56] Steve: Go for it.

[00:23:57] Tyler: written by Jesse Micham, the founder of YNAB, who talks about how he used YNAB for keeping the books at YNAB the company for many years until it became large enough where it became impractical, right? And they went to more advanced software.

But, and here he says some of the things YNAB won't do. So YNAB won't send your invoices for you. It won't track your time. So time tracking is another thing. I don't know if we mentioned that. It won't, it won't track your mileage. It won't handle your asset depreciation, it won't print checks, it won't integrate with your accountant's tax software. It won't run your payroll and it won't track your inventory for you.

So there's a lot of things that it won't do.

But then he goes on to say what it's great at is something that I kind of alluded to earlier. It will add value to your business by giving you the insights you need to clarify your priorities, cut wasteful spending, boost spending where it's profitable and maybe even show you that you can take a steady salary.

So it sounds like a lot of it comes down to what kind of business you're running, right? If you've got a major need for inventory tracking, for tracking hours, depreciation, then why not?

Might not be a good fit.

[00:25:10] Steve: Mm-hmm. And another thing is we don't have to go into this in a lot of detail cuz it's sort of complicated, but if you're using the cash method of accounting, there's, there's a cash method and an accrual method.

[00:25:24] Tyler: Right.

[00:25:25] Steve: If using the cash method, then either YNAB or QBO will do what you need. If you need to use the accrual method of accounting, then having something like QuickBooks is gonna be better for you because it's built to handle those things from the ground up. And I imagine that is part of what played into Jesse's decision to eventually switch, because I've heard him talk in other venues that they eventually decided that they wanted to do accrual accounting because, from a management perspective, it gave them useful insights that you couldn't get from cash accounting.

[00:26:00] Tyler: Right.

[00:26:01] Steve: But anyway, we don't have to go into those

[00:26:02] Tyler: Yeah. That's a whole can of worms.

[00:26:05] Steve: Right. Great.

[00:26:07] Tyler: So we, we already, I just mentioned a bunch of the uh, maybe potential reasons YNAB might not work for a small business. There's one thing in particular. We mentioned it a little bit earlier, but this is kind of a thorn in my side, so I'm just gonna call it out again. And that's the handling of transaction fees, like YNAB really excels at just focusing on the money that you have. You know, and part of that is the cash accounting that you talked about just now. But you know, also it's part of their personal budgeting philosophy that you give every dollar a job, but only the dollars that you have. Right? So one of the ra-- one of the ways this is kind of a thorn in my site is, as I mentioned, my parent processor takes out their cut before they send me the money.

So because I never have that money, It does not show up in YNAB unless I do kind of a workaround. And you can do a workaround by the way, but it's just not something that it handles out of the box, if you will. So,

[00:27:04] Steve: Mm-hmm. That's a good call out. I recently moved all of my clients over to a platform called Ignition, and the, the, one of the things that I really love is that they send me the full amount of the client payment when it gets paid, and then later they collect the merchant fee separately in the monthly bill that I pay to them.

And the, so the, the merchant fees are all in there and they, they show up in my accounting ledger as money going out, where all the money coming in from the client shows up when I get it. They don't take anything out of that. And then I pay them processing fees separately, which is super cool. And none of the other payment processors that I've tried do it that way.

[00:27:51] Tyler: That's awesome. That's really cool.

Let me mention one other thing really quick about YNAB is that when you transfer money between different categories, or I guess you'd call them accounts in QuickBooks, although it does keep a record of that, it does not show up on your transaction history, it shows up in a separate part of, of the app interface. Is that important? Like in, from an accounting perspective?

[00:28:16] Steve: It can be, it depends what you're using it for,

[00:28:22] Tyler: I'm not using it for anything, so it doesn't, it doesn't impact me, but I just thought it was something of note, because I've had clients ask me that too. You know, Hey, I moved money from category A to category B. Why is it not showing up as a transaction? Well, the answer is because you didn't spend the money, you just earmarked it for something else.

[00:28:40] Steve: Right. And in QuickBooks, those transfers between categories are treated the same way as income or expense. They're still debits and credits, and you can add them as journal entries. They'll show up in the ledger just like everything else. So if you do need that kind of a facility, then a first class accounting software like QuickBooks has that built in. And you can see that in all the reporting.

[00:29:12] Tyler: Okay, so we've kind of covered,

[00:29:14] Steve: But if you're not using it, then doesn't matter.

[00:29:17] Tyler: yeah, exactly. Exactly. So we've kind of covered some of the drawbacks, potential drawbacks of using YNAB for small business bookkeeping, and we've talked about how thorough QBO is in some of these more detailed categories. Are there any gotchas or any drawbacks to using QBO as a small business?

[00:29:37] Steve: There are. It can be complicated. And it may take some training to understand how it works. Budgeting features, especially, I have not used them in QBO. Supposedly they exist, but I dunno how to use them yet. So this is now the answer to why I use both is I use YNAB for the budgeting portion of it. More of the forward looking like, I have this cash and I am saving it because I am going to need it for X, Y, Z in the future.

[00:30:12] Tyler: Mm-hmm.

[00:30:12] Steve: I haven't figured out a good way to do that directly in QuickBooks. So that's primarily the reason that I use YNAB in conjunction with QuickBooks. So that may take some training.

It's like YNAB has a, a learning curve. I may not be the best one to ask how steep that is, because I've been using it for so many years already that I'm used to it and I like it. So I don't know if it's worse or better than QuickBooks for someone who has never used either.

[00:30:45] Tyler: That's a really good question. I know YNAB has actually done a lot of work in recent years to improve their onboarding experience. I mean, I've been using YNAB for so long that there weren't a lot of materials about how to use it, when, when I started using it, and I remember there was some pain, you know, it was, it. It's a new way of thinking about your money. Particularly when it comes to credit card use as well. But I think there, I, you know, the fact that I have clients is a testament to the fact that there is a learning curve that some people are willing to pay to accelerate, right. To get some hands on help and, and to kind of get things going.

But yeah, it'd be interesting to know what, what's like, I guess you more recently started using QuickBooks. How long did it take you to kind of figure out what was going on?

[00:31:29] Steve: Um,

[00:31:31] Tyler: Are you still figuring out what's going on?

[00:31:32] Steve: well, yeah, I've, I've got the basics down now, but I'm still learning these other things. Like one, one of these times I will try to figure out how to do budgets in QuickBooks, and then maybe I can give a better review of them.

But the other thing is that I just enjoy using YNAB, like it's fun. And so I, well, I think I already said this, I look forward to reconciling things and categorizing things in YNAB where I don't quite as much with QuickBooks.

[00:32:02] Tyler: That's fascinating. What do, do you think that comes down to just like the user experience, like the way the app is designed or, or what, because I mean, essentially it's a similar activity, right?

[00:32:11] Steve: It is and especially on the mobile app, that experience is super smooth on YNAB, where it's a little harder to do on the QuickBooks mobile apps. It's not quite as difficult on desktop.

[00:32:29] Tyler: Interesting.

[00:32:30] Steve: that's, that's part of it.

[00:32:31] Tyler: Okay, so I, you know, before we started recording this episode, I kind of told you that I think we should not be-- we shouldn't hold back. We should give some like actual recommendations as to what kind of, you know, when you might want to use one or the other or both of these apps instead of just kind of being like, it depends on your personal situation, even though it does, you know, I feel like we have some opinions about this, so,

[00:32:55] Steve: It does, but hopefully someone listening to this can say, well, I, I don't need invoicing and I don't need bill pay, and so that's not relevant to me. I can focus on these other things and hopefully make a decision that's, that fits for them.

[00:33:12] Tyler: Okay. So I'm just gonna go ahead and ask you, when do you think uh, when would you want to use qbo quick QuickBooks online exclusively as your bookkeeping software?

[00:33:26] Steve: I think if, for me, if I could figure out how to do budgeting in QuickBooks, that would go a long way to getting me there, cuz that's, that's probably the only holdover from YNAB that I miss for the business side. I still enjoy YNAB, so I might keep it just for that reason, I don't know. But

[00:33:51] Tyler: For fun, for enjoyment.

[00:33:53] Steve: but if, if I had some of these more complicated situations in, well, so invoicing, I have a different solution for that, so that doesn't matter so much. Same with Bill pay, but managing vendors and customers and contractors, if I needed that all to be in one place, that would be a good reason to use QuickBooks cuz YNAB doesn't do any of those things.

[00:34:20] Tyler: I mean, that seems like the main argument that I'm hearing out of this conversation is if you're looking to have an all-in-one solution, uh, QuickBooks might be the way to go if you don't wanna have a separate budget from your accounting, if you want to invoice with the same system that you're accounting in, if you wanna track your hours and your mileage, you can do all those things in separate apps and separate tools, and then combine them all at the end just fine.

But if you wanted to really have a all in one solution, it sounds like QuickBooks might be the way to go,

[00:34:49] Steve: That's right.

[00:34:50] Tyler: and if you're willing to put in the time to learn it.

[00:34:53] Steve: Mm-hmm.

[00:34:56] Tyler: Okay, and I think you've kind of already answered this, but just summarize for us. When might you want to use both YNAB and QuickBooks in your small business?

[00:35:06] Steve: YNAB is really good at the psychological pieces of it, the, the figuring out what your priorities are, planning for the future. And I still really love it for that aspect. So I would say that uh, of itself that gives a lot of value to you as a business owner, and it might be worth using YNAB for that, even if you are using QuickBooks for all of the other stuff.

Uh, given it is two things to maintain, two bank feeds that you have to reconcile, two places to maintain the same list of categories or chart of accounts. But that might make sense to do.

[00:35:52] Tyler: And then I guess the last option here is when would you want to use YNAB exclusively for bookkeeping? And I'll start on this one. I think if you are already using YNAB for your personal budget or your family budget and then you're starting a small business or you're running a small business, I think it's kind of a no-brainer.

You could, you know the learning curve would already be conquered. You just have to basically create a separate budget for your business and it's off to the races. So I think that's a really good use case.

[00:36:20] Steve: Mm-hmm. And that's free. If you're already paying for the YNAB subscription, you can make as many budgets as you want.

[00:36:25] Tyler: That's right. No additional cost there. And they have a relatively new feature called YNAB together. I don't know why you would necessarily need this, but if you wanted to or needed to, you could share budgets. With someone else on your team or potentially even your accountant. I don't know. That's maybe not necessary, but it's possible.

[00:36:45] Steve: Okay.

[00:36:45] Tyler: Yeah. And then the other thing I would say is kind of a no-brainer, even if you aren't currently using YNAB for your, your personal budget but you're looking for kind of a, a tool that's fun and relatively straightforward to use for your small business. And your business is not requiring you to depreciate thing, assets or track mileage and things like that, and it's kind of a simple services business like the one that I'm running. I think that's also a pretty good argument to make for using YNAB exclusively.

[00:37:18] Steve: I agree with that.

The other thing we should mention, because it may be a deciding factor for some folks, is the price of YNAB versus QuickBooks.

So uh, YNAB. If you pay a month at a time, costs $15 a month. If you pay for a whole year at a time, it's a hundred dollars. So that saves you quite a bit if you can do that all up front.

QuickBooks online is $30 a month, which is $360 a year. It goes all the way up to like $200 a month for if you need everything. But for folks where YNAB would work, the lowest plan of QuickBooks is going to be sufficient. That's $30 a month.

So QuickBooks is gonna be more expensive than YNAB.

[00:38:15] Tyler: And you could use YNAB for your personal and family budget. So it's like two birds with one stone, not plugging YNAB, definitely not plugging YNAB, but you should sign up

[00:38:24] Steve: Right? They're not, neither of them is paying us to talk about these products. We just like them both. I like them both. You like YNAB?

[00:38:33] Tyler: I'm sure QuickBooks is great. I just haven't used it.

[00:38:35] Steve: Right.

Well, I dunno, did we cover everything?

[00:38:40] Tyler: I think we


[00:38:41] Steve: What should folks do if they have questions? If we didn't cover something and you're like, but I want to know your opinion on X, Y, Z.

[00:38:50] Tyler: Well. They can email us at,

[00:38:55] Steve: Sounds great, and we will in the future do a mailbag episode where we can answer all those kinds of questions, or if there's enough YNAB/QBO specific ones we can do another episode on, on just that topic as well.

[00:39:08] Tyler: Yeah, sounds good.

[00:39:10] Steve: Okay. Well, that's it for today, folks. Thanks for tuning in. We'll see you on another episode of It's Not About The Money.

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