Frustrated Beginner

Hello,

 

I've recently stumbled across YNAB in my search for a business-friendly alternative to Quickbooks, that could help me get a tighter control over finances (especially cashflow) in order to potentially scale my business. I've just started my journey to budgeting and I have some questions.

 

For starters, money transfers between different checking accounts should be zero-sum, however, it is recorded as "Spending".  For example, if I transferred $100 from Account A to Account B, and put this under any category it would show up as $100 spent on my report when I expected it to be recorded purely as a zero-sum "transfer". Is there a separate category for these kind of zero-sum transfers that is not part of the "money spent" category?

 

How does reconciling work? I've linked my bank accounts and import data daily, but it is not real-time and therefore is not accurate. I've had to reconcile my balances multiple times because of this, yet I'm not too sure how this works.

 

Is there a detailed step-by-step guide on the technical aspects to YNAB? There is a lot of nuances that I feel like I'm missing to really get the most out of YNAB. 

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  • Gold Door said:
    help me get a tighter control over finances (especially cashflow)

    YNAB wants you to reserve funds for specific purposes and NOT "cashflow" an expense.

    (This is how most people use that term, in my experience. If you simply mean where funds are located, YNAB handles that well.)

    It absolutely will help get a tighter control over finances by allowing you to make a priority-based plan that you continue to refine as life events unfold and you realize the plan could be improved.

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  • Gold Door said:
    it is not real-time and therefore is not accurate.

    You can enter transactions yourself, which will be matched upon a subsequent import.

    If you are talking about income, you would do well to be ahead enough so you don't immediate need those funds. Some amount of delay is therefore naturally tolerated. Many people strive to push all income into the following month's plan (budget).

    Like 1
  • YNAB is a cash-based allocation budget system. It is not an alternative to business accounting software like Quickbooks.

    Like 3
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 4 wk ago
      • Reported - view

      nolesrule But it can be used in its place, right? At least for smallish businesses. My understanding is that YNAB themselves uses YNAB rather than Quickbooks. I could be wrong. But, no, it is not traditional accounting software.

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      • amp97
      • amp97
      • 4 wk ago
      • 1
      • Reported - view

      Superbone Yes, it can definitely be used for small businesses, although it may be best for a business without inventory. 

      Like 1
    • Superbone YNAB used to use it for their company finances, but I don't think that's currently the case.

      Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 4 wk ago
      • Reported - view

      dakinemaui OK, I wasn't sure. I know they experimented with it at one point.

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    • Superbone I can confirm that YNAB used to use YNAB for budgeting (and had done so since the beginning). After moving to accrual accounting, we made the switch to Xero to handle that better.

      Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 4 wk ago
      • 2
      • Reported - view

      Superbone It can be done, but I don't recommend it. It's fine for budgeting, but it's crappy as accounting software. Besides inventory tracking, Quickbooks and accounting packages have other features that are important for small business such as invoicing (print and digital/email) and accounts receivable, sales receipts, payroll data entry (even self employed sometimes need this if they go the S-Corp W-2 route). I've never stopped using Quickbooks. But I've actually stopped using YNAB for my self employment income, because I didn't find it worthwhile.

      Like 2
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 4 wk ago
      • Reported - view

      nolesrule Thanks for the explanation. This is an area that I have zero experience in.

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    • Superbone Counterpoint: I use YNAB for my (very simple) small business finances, and it works fine because I don't need any of the things that Quickbooks does better—plus it lets me set aside chunks of money and not spend them accidentally, which you'd think would be a feature of every accounting package, but is not. I'm not saying it'll work well for all or even most small business, but if you're eBaying or consulting or otherwise running a small business with a simple structure and no inventory, it works fine and the marginal cost is zero if you already use YNAB for your personal finances.

      Like 2
  • Hi Gold Door !

    When you have a moment, check out this article on how to set up a business budget.  Jesse chats more about the process in this podcast about YNAB for Your Business.

    It's great that you're reconciling your accounts frequently, but if the reconciled balance doesn't match your actual account balance you should add any missing transactions to bring things up to date.

    Here are a few blog posts on using YNAB for your business:

    Please keep in mind that they were created based off of our previous version of YNAB (YNAB 4), so you won't recognize some of the screenshots. The information is all still relevant, though!

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  • I think this also depends on the goal of what you want to manage. If you want reports of what happened, it may not be quite as 'tight' as could be helpful.
    I run both a spreadsheet, and YNAB for my small business. My spreadsheet is better for organizing information after the fact. YNAB is better for me planning how to spend the money that has come in and keeping track of long term forward thinking goals. So I track setting aside money to pay my accountant to do our taxes in YNAB, but in my spreadsheet I track what I spent the money on. My categories are a bit different in YNAB vs what I keep in my spreadsheet as well. So I do both because it's what makes the most sense right now.

    It would be kind of cool if YNAB could incorporate some of the other features that are helpful for businesses, but that's not their primary focus.

    (and as far as transactions go - I prefer to manually enter transactions for my small business, my personal budget, and for my BF's personal budget. I like to keep my fingers on the pulse better than trying to sort out what gets imported after the fact. It takes me less than 10 minutes a few times each week to handle all 3 budgets, so not a huge time sink at all)

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