Outside Consultant: Tracking systems for small business

I run a blog and a few other online niche sites and have a constant stream of money coming in, sometimes every day. What is the best type of software or tracking program to keep track of all of this income, as well as the expenses I incur?

Robyn Adams, Living the Simple Life Now, livingthesimplelifenow.com

The best tracking system for income and expenses depends on an organization's size, complexity and expertise. My own experience as treasurer for nonprofit organizations provides a framework for this answer. In one organization, we began by using spreadsheet software. At first, we used one column — positive values for income and negative values for expenses — with a total at the bottom, essentially providing a checkbook-type balance. Then we expanded to two columns, one for income and one for expenses. Then we moved to multiple columns for different types of income and expenses.

When the organization was small, a spreadsheet was the appropriate tool. As the organization grew and become more complex, we needed a general ledger system. We began with a free version. Software companies provide simplified free versions to demonstrate their systems. This served our needs until the organization grew and became more complex. Then we purchased the complete version of the software.

An Internet search provides a starting place (try "free accounting software''). Some offer software free for a trial period and some have no time limit. For the latter, do not expect too much in updates and support. Their strategy is to get you to buy the complete version of the software. Also, if you select one company's free software, your data will be most easily convertible into their complete version.

Use the simplest system that meets your needs. If you foresee outgrowing that system, then go to the next-higher-level accounting system. While in one organization, we progressed to more complex systems, in another organization we were able to meet our needs with spreadsheets.