Jen I'd like to setup my very simple business in YNAB too.  I don't have separate credit cards or bank accounts for the business though. Is there a way to set up a separate business budget, but not have separate credit and bank accounts?

Mark Hyams If your business transactions run through the same accounts as your personal transactions, you'll keep it all in one budget file. The best way to do that is to create a Category Group for your business categories. 

Jen Ok thanks!

Mark Hyams Sure thing, let us know how it goes!

Jen I'm having a hard time figuring out how to treat income. I'm responsible for paying Gross Receipts Tax (in New Mexico) twice a year, so I'm excited to have a GRT category that I can budget with. The way it works is every July, I pay GRT based on my gross income Jan-June, and the same thing happens six months later. YNAB will be great for tracking what I owe in GRT until it's due. But I'm unsure the best mechanism on how to deal with the income, because I also need to track my gross income for Schedule C purposes at the end of the year.

Say I get a check for $86. I charged $80, and since I pass on the GRT (like sales tax) to the client, they payed the $6 GRT. Do I put all $86 into "inflow:to be budgeted" and then immediately budget $6 to GRT? Or is it better to split the transaction into $80 to "inflow: to be budgeted" and $6 to the GRT category in my business categories? Or is it better to have an "income" category in my business categories, split $80 into "income" and $6 in GRT, and then move the $80 into "inflow:to be budgeted"? If I do the last one, I get a negative amount for the "budgeted" income. Does that matter?

On top of all that, I need to be able to track the whole $86 as gross income for Schedule C. (I then deduct the actual GRT paid in a calendar year as "other taxes" on my 1099 business expenses.)

Thanks for the help! Hope this all makes sense!

Mark Hyams thanks for the clear details!

Here are two ways to track all of your income, and the GRT as well:

1. Always enter it as Inflow: To be Budgeted, and you'll be able to run reports on it.

Then, budget the GRT to the GRT category immediately -- the disadvantage here is that it's not as automatic as putting it straight into the category by splitting the inflow transaction. You'll need to be careful to budget the correct amount, and avoid moving money out of the GRT category.

2. Do that last thing you mentioned, have an "income" category in my business categories, split $80 into "income" and $6 in GRT, and then move the $80 into "inflow:to be budgeted." A negative budgeted amount is no big deal -- it just tells you that you budgeted less there. Here's a quick video on how and why it happens. In your case, it's not because of Available rolling over, but because of the amount budgeted directly to the category. This is ninja-level budgeting, for sure.

 The disadvantage here is that your Income vs. Expense reports won't work because you won't be running income through the default Inflow: To be Budgeted category. You'll have to run a Spending Trends report on just the Income category group, if you create it like this:

Let me know how it goes!

akkoch I've heard good things about Stripe! It integrates with a lot of options, so that's good for when you grow. Keep us posted on how it's all working out!

Slate Gray Python (e5183818ddf9) Congrats on being ready to hire your first employee! :-) YNAB is so helpful for ensuring money is set aside for payroll, including the taxes. Will you be doing payroll yourself, or do you have a provider? Let me know if you need a referral!

Turquoise Memory (20e8230556a4)  Check with a tax adviser on this since from my understanding the schooling would not be a business expense/tax deduction. This isn't ALWAYS true, but is most of the time. For the others, what I did is paid from personal funds and kept good records. I treated it as owner's contribution to my business, so didn't even add them to my biz budget in YNAB since I'm not planning on paying myself back for them. If you DO want to reimburse yourself for those expenses, you can create an "Owner Loan Repayment" category and set a goal for the total amount you want to repay to yourself. Then, as your business income grows, you can fill that category so you can pay yourself back. There are other ways to do it, but that is the simplest way, and will help keep everything straight. Just be sure to keep your receipts and make good notes! :-)

Rebekah Zobel Jones Thank you! I could possibly just mark those expenses that I'm spending from my personal budget towards my business as "professional development," and maybe just use them for tax purposes (with the exception of schooling, if it's not tax deductible, as you say). And not spend out of my business expense account until I actually have money in there. 

Ryan Oakley  Wave is a great app and works well! I look at it as a step up from using YNAB as your ONLY bookkeeping software, without going all the way to Quickbooks Online or Xero. It doesn't have all the features of the latter two, but does do more business-like reports than YNAB does. YNAB is an excellent piece of the puzzle and I'd be lost without it, lol, but it's not the entire puzzle! :-)

Kate Great! You don't need much to get started. My suggestion would be to start a new checking account and maybe get a new credit card that would be JUST for business purposes. Try to get a client BEFORE spending any money on websites, marketing, etc. Good luck!