TurboCASH was the first program I tried. On the plus side, TurboCASH is the kind of program that will suit people with an accounts background. You enter your transactions in journals, and then click a button to post to the ledger. There is also a double-entry T-account viewer available for each account that I found very handy. This use of traditional accounts terminology etc means that there is quite a learning curve for anyone without a basic knowledge of accounting. I still have a good grasp of accounts from school, but having been away from it all for a few years, I found I had to buy the TurboCASH Accounting Made Easy e-book for £14.95 to really get to grips with the program. The book goes into lots of detail on setting up TurboCASH and keeping accounts for both typical retail and service businesses. Once I worked through the tutorials, the program made a lot more sense. I also found the forum helpful when I was not sure how to treat unusual items in my accounts.

The interface does not look very slick, but I would not mind that if it did the job. My main problem with TurboCASH was that mistakes started creeping into the reports over time, particularly relating to transactions I had previously edited. Luckily, I had so few transactions that I was able to spot when reports did not look quite right and go back and fix things. When this happened a third time within 9 months, I stopped using the program, because accounting software that produces inaccurate figures is worse than having no software at all! The site does state that the software is in beta, so I realise that bugs are to be expected and that I used it at my own risk.

Before resorting to paper ledgers and red pens, I googled for alternative software and I came across QuickBooks Simple Start. Oddly, this software costs 72 euro + VAT + P&P if you look at the Irish QuickBooks site, even though it is available as a free download here at QuickBooks.com. The free version has been made with US users in mind, but the program is so basic that international users don’t really miss out on anything. Perhaps QuickBooks Ireland have added some fancy localised features for Irish users that justifies the price tag?!

Unlike TurboCASH, Simple Start is suitable for anyone to use, even if you have never kept any accounts before. The interface is a lot more visual and intuitive. The main screen is a diagram showing the path of money through your business, and you just click on the icon that you want to record something for (invoices, bank account, expense etc). There is no mention of posting, contra entries or other accounting lingo here. It’s plain English all the way – just money in and money out. There is very good help within the program, although it is so straightforward and intuitive that I have not needed to call on it much. Despite the easy interface, I like the way that you can still look under the hood at the raw ledger accounts and transactions by viewing ‘Accountant Reports’. You can also quickly run profit and loss and balance sheets for each month, the year so far, last year etc which is very handy. Backing up your accounts is also very quick (less than a minute), whereas after a few months of using TurboCash it used to take about 10 minutes!

I have been using QuickBooks Simple Start for about 2 months now and so far the only disappointment has been the lack of a cash flow report. I know that the whole idea of Simple Start is to just give you the basic features and reports that you need starting off, but a cash flow report is often the key report for a start-up. A minor niggle is that you don’t seem to be able to tag certain expenses as being part of cost of sales either. If you upgrade to QuickBooks Pro, you get cash flow reports and a ton more bells and whistles that I will probably never need as a freelancer. Again, there is a big price difference between buying the Irish version (370 euro + VAT + P&P) and the US version ($199.95 or $179.95 if you upgrade from Simple Start) of QuickBooks Pro. The US price is becoming more tempting as my business grows, but I will have to find out what I will miss out on if I don’t buy the Irish version. I do my own accounts at the moment, but if I ever start handing them over to an accountant, it could be false economy buying the US version if the accountants can’t work with those files or there are other issues. All that’s a bit down the line – for now the free version of QuickBooks does the job very well and my bank balance is happy with it too.

When I first looked into doing some freelance web development work, I rang Revenue to find out what the tax implications would be for a PAYE worker earning some self-employed income. It would be no big deal, I was told. I would just have to make a tax return each October, and pay the tax on my self-employed income. The lady I spoke with kept stating that Revenue were really only concerned with what my overall income was, rather than how I earned it. That made sense to me and all seemed right with the world.

However, Revenue does care about how you earn your money. If you have a normal PAYE job and earn some self employed income, you are treated much the same as a standard PAYE employee. However, once you leave the safer, more predictable world of PAYE employment behind, and fully commit to running your own business, you lose your PAYE tax credit. Single people in Ireland are currently entitled to a personal tax credit of 1760 euro, but PAYE workers get an additional credit of 1760 euro. This means that while a lowly paid PAYE worker earning 17,600 euro per annum gets off tax free, a sole trader with the same income (assuming no expenses) has to pay 1,760 tax.

It is not all bad news for sole traders. Unlike PAYE workers, they only have to pay tax once a year, and new businesses do not have to settle up until year 2. You can also claim some tax relief on business related expenses. However, these minor perks are not any justification for why PAYE workers are treated far more favourably than sole traders by the Irish tax system. I’m not arguing for tax breaks for the self-employed; merely for equal treatment. Given the increased time and effort sole traders must put into managing their tax affairs alone, surely that’s not too much to ask. Such an initiative would be of significant help to the many start-ups that struggle with cash flow problems. Last year’s budget made things more unfair by increasing the PAYE credit far more than the personal tax credit. With the tightening of belts this year and far bigger fish to fry, I doubt that the Minister for Finance, Brian Cowen, will remedy this in December. I’ll just be keeping my fingers crossed that it won’t get any worse.