Question 1

Can I really do my own bookkeeping with no accounting background?

Accepted Answer

Yes. Modern accounting software like Wave is designed for non-accountants. It connects to your bank, imports transactions automatically, and guides you through categorization. You do not need to understand debits and credits to keep accurate books. Thousands of solo founders with zero finance training do this successfully.

Question 2

What is the best free accounting software for a bootstrapped startup?

Accepted Answer

Wave is the standout choice. It offers unlimited invoicing, full double-entry accounting, receipt scanning, and financial reporting at zero cost. The core accounting features are genuinely free, not a limited trial. Paid add-ons exist for payroll and payment processing, but you do not need them to manage your books.

Question 3

How do I handle hundreds of transactions without a bookkeeper?

Accepted Answer

Connect your bank account to your accounting software. It will import transactions automatically. Then set up rules: every purchase from Amazon categorizes as "Office Supplies," every Stripe deposit as "Revenue," and so on. After the initial setup, most categorization happens without you touching it. Spend 15 minutes weekly reviewing what the software flagged as uncategorized.

Question 4

What is the minimum I need to understand about accounting?

Accepted Answer

Three things: (1) Income minus expenses equals profit. (2) Keep business and personal money completely separate. (3) Every transaction needs a category. That is genuinely it for getting started. Your software handles the rest. Learn more as you go, but those three principles cover 90% of what a pre-launch founder needs.

Question 5

How do I separate business and personal finances on a tight budget?

Accepted Answer

Open a free business checking account. Many banks and fintech companies offer them with no monthly fees. Use that account exclusively for business transactions. This single step makes bookkeeping dramatically easier because every transaction in that account is a business transaction. No sorting required.

Question 6

When should I upgrade from free software to a paid tool like FreshBooks or QuickBooks?

Accepted Answer

Upgrade when you need features Wave does not offer: inventory tracking, advanced integrations with other tools, multiple currency support beyond basics, or when your accountant requires a specific platform. For most pre-launch and early-launch founders handling under 1,000 transactions per month, Wave is more than sufficient.

Question 7

What accounting mistakes do first-time founders make most often?

Accepted Answer

The top five: (1) Mixing personal and business accounts. (2) Not tracking cash expenses and small purchases. (3) Waiting until tax season to categorize transactions. (4) Forgetting to save receipts for purchases over $75. (5) Not setting aside money for taxes throughout the year. All five are avoidable with basic software setup and a weekly 15-minute review habit.

Question 8

How do I prepare for taxes without an accountant?

Accepted Answer

Keep your books current throughout the year so there is no last-minute scramble. Your accounting software generates a profit-and-loss statement and expense report that any tax filing service can use. For simple businesses, software like TurboTax Self-Employed can handle your return. Save 25-30% of profit for taxes as you earn it. You can always hire an accountant just for tax filing, which costs far less than year-round bookkeeping.

Question 9

What is the difference between bookkeeping and accounting?

Accepted Answer

Bookkeeping is recording transactions: what came in, what went out, and where it went. Accounting is interpreting those records to make business decisions, plan taxes, and generate financial statements. As a bootstrapped founder, you need to do the bookkeeping yourself. Accounting-level analysis can wait until you can afford professional help or until you grow into needing it.

Question 10

How much time per week should I spend on bookkeeping?

Accepted Answer

With software connected to your bank, 15-30 minutes per week is enough for most early-stage startups. Review imported transactions, categorize anything the software missed, and snap photos of any paper receipts. Do it on the same day each week so it becomes a habit, not a dreaded chore.

Question 11

Do I need to learn double-entry bookkeeping?

Accepted Answer

No. Your software handles double-entry behind the scenes. When you record a sale, it automatically debits your bank account and credits revenue. You just need to categorize transactions correctly. Understanding double-entry is helpful as you scale, but it is not a prerequisite for keeping clean books as a solo founder.

Question 12

How do I categorize transactions I am not sure about?

Accepted Answer

When in doubt, use a general "Miscellaneous Expense" category and flag it for review. Most accounting software lets you add notes to transactions. At the end of each month, review flagged items and recategorize. It is far better to record a transaction in the wrong category than to not record it at all. You can always fix categories later.

Question 13

Should I track mileage and home office expenses myself?

Accepted Answer

Yes, these are valuable deductions. For mileage, use a free app like MileIQ or your phone's built-in tracking. For home office, measure your dedicated workspace as a percentage of your home. Record these monthly in your accounting software. The standard mileage rate and simplified home office deduction make the math straightforward.

Question 14

At what point does it make sense to finally hire a bookkeeper?

Accepted Answer

When your time is worth more than the bookkeeper costs (typically $200-500/month), when you have employees or complex payroll, when you take on investors who need formal financial statements, or when you simply have too many transactions to manage in 30 minutes per week. Most founders reach this point around $10-20K in monthly revenue.

Question 15

What records do I need to keep and for how long?

Accepted Answer

Keep all receipts, bank statements, invoices, contracts, and tax returns. The IRS requires records for 3-7 years depending on the type. Store everything digitally in your accounting software or a cloud drive. Paper fades and gets lost. A 5-minute weekly habit of scanning receipts saves hours of pain during an audit.

I can't afford a bookkeeper but have lots of transactions

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