ZipBooks is a pretty comprehensive small business accounting software solution, so there is a lot to cover. ZipBooks began when we, former small business owners, decided to build a tool that we wished would have existed when we were looking for an accounting software solution.
Here are some of the unprecedented features that ZipBooks offers.
Before ZipBooks, there were paid solutions that had time tracking built in but no free options. ZipBooks envisioned a free app that included a time tracker and a native iPhone app, so you could track time from any location with a cell phone signal.
The ZipBooks time tracker gives you the ability to create new projects, assign them to clients, track the time they take to complete it, and determine how those projects should be billed hourly based on the project, task performed, or the person who is working on the project. For example, small legal firms use ZipBooks to track work done by an attorney at a different staff rate than work performed by a paralegal. You can customize it to suit your own small business. The invoice template provided is excellent.
Invoicing is the most common way for small businesses to collect payment from clients. ZipBooks connects time tracking directly to invoicing both in the web app and also in the iPhone app. Basically, this means that when you create a new online invoice and enter a client’s name, ZipBooks automatically notifies you if there is billable activity for that client that hasn’t been invoiced yet.
When creating a new invoice, you have the option to include some or all of the data from the time tracking based on available filters like team member, project, or data. For example, if you are sending an invoice in September for work completed in August, select August 1st to August 31st so you don’t accidentally include work from the beginning of September that you meant to bill later.
ZipBooks invoices are customizable. They let you change the header and footer color, add a custom logo, and you can even create a universal note and terms that can be included at the bottom of all your invoices.
ZipBooks takes the double-entry approach to accounting, and the app automates as much as it can. This means that ZipBooks creates a journal entry every time an invoice gets sent out by debiting the accounts receivable account and crediting the revenue account.
One final note on ZipBooks invoices: ZipBooks gives you real-time feedback on how clear and informative your invoice is on a scale from 1 – 100. To create this scale, we studied thousands of invoices that have been sent and we’ve narrowed down factors that help clients pay faster, like enabling credit card payment and writing a cheerful thank you note in the footer. As you check off those things, your score will get higher.
Customer billing and credit card payments
Another ZipBooks feature that you won’t be able to find in any other free accounting software option is the ability to charge a client on a recurring basis. You can setup a recurring profile in ZipBooks and it will send customized recurring invoices to your client as many times as you want whenever you want.
Credit card processing in the recurring profile has three options: no credit card billing, manual credit card billing, and auto-billing. If you enable credit card payments in a recurring profile, each invoice will be emailed to the client with a payment form in the invoice. You can also enable auto-billing which means that after the customer pays the first invoice, subsequent invoices will be paid automatically.
ZipBooks billing allows for partial payments and when a payment is made, ZipBooks automatically sends a receipt to the client and marks the payment in ZipBooks. ZipBooks also create a journal entry to record the payment by debiting the bank account and crediting accounts receivable.
As already noted, ZipBooks lessens some of the accounting busywork of sending invoices and getting paid, but sometimes there are transactions that have to be created manually. When working with transactions, you can filter view by account, split transactions into different accounts, and even confirm and reconcile transactions against a bank statement.
Because manual transaction entry can get pretty tedious, ZipBooks also gives you the option to integrate your bank feed with your accounting software so that your bank data gets pulled directly into your transactions without you having to manually create each one, one by one.
Whether you do your taxes on your own, or you have a CPA who does your taxes for you, you’re going to need an up-to-date and accurate income statement and balance sheet report in order to know the value of your company and how much money you made. You can use quarterly income statements to calculate quarterly estimated tax payments and a balance sheet report is useful for figuring out your end-of-year tax liabilities.
Every business wants to pay as little tax as possible, so being able to show all your expenses by category is pretty important so you can itemize your incurred business expenses that are tax deductible. ZipBooks lets you create custom categories that are nested in the parent expense account so that you can keep things like meals and entertainment separate from mileage.
What’s the catch? How is it free?
ZipBooks has lots of other perks like the ability to keep books in multiple currencies and manage multiple team members in one account, so it can probably seems a little too good to be true—but it’s not.
We make our money by taking a little bit of money for every credit card charge that goes through our system. We understand that not everyone will use credit cards, but enough do for us to pay the bills.
ZipBooks also provides professional services like bookkeeping, tax prep, and payroll. Small companies to companies might not need these services when they start out, but as they grow and get complicated enough, some business owners decide that it no longer makes sense for them to do this type of work themselves. We hope that by building good relationships with our customers through free accounting software, our customers will trust us to do bookkeeping and tax prep instead of turning to a brick-and-mortar service provider.