It’s been about a year since I moved YNAB to YNAB, and I wanted to report how it’s been going.
In a word, awesome.
Monthly bookkeeping used to be the absolute bain of my existence (and I’m a trained accountant, so it’s not that the stuff is technically hard for me). I hated it.
Now, I hate it less, because I’m done a lot faster. What took me about 4 1/2 hours each month in 2011, took me about 2 1/2 hours in 2012.
So the speed is obviously a big win.
Tax Planning (and Preparing)
What about taxes? Well, here’s a little test to see if your accountant actually cares about your numbers, and is a tax planner instead of a tax preparer. The two are so very, very different. The test? If they demand that the format you give them is importable into Quickbooks. Yes, it saves them time, because then they can export that Quickbooks format into their tax preparation software, give it a once-over, and finish preparing your return.
I went to the Reports section of YNAB, and did an export of Last Year of the Income v. Expense report. I gave the spreadsheet to Casey (a guy I will recommend again, and again, and again to every YNABer that needs a live person to help with their tax strategies. Here’s his book, and here’s a podcast I recorded with him recently) and did he come back and demand it be in a Quickbooks format?
Nope. He combed through the data, had questions for me, and then went on his way.
I’m generalizing here (and getting off-topic), because I’m sure there are many tax professionals that just like the time savings of having it be QB-importable, but also really do look at your numbers and try and save you money. But if you get the feeling you’re just one of a thousand returns done by your accountant, and that he is, perhaps, running a tax prep mill more than a tax planning practice…you should probably shop around a bit more.
Anyway, doing a quick export and handing my tax data off to Casey was super easy.
So, speed has improved, and tax preparation is still a piece of cake. That all pales in comparison to the greatest benefit of using YNAB for YNAB: The Budget.
I’ve always been so extremely conservative with the business money, I’ve never really had to budget (your alarm should go off right there).
The business has always been profitable, except for a dark time in 2009 when we were sprinting to the finish line of YNAB 3 and I was draining every last dollar I personally had. But besides that period that I will never repeat? It’s been profitable. (I should say, that had I been budgeting in 2008 and 2009, I likely would never have experienced the dark period that was YNAB 3 Development).
So, I never budgeted for the business until 2012.
And then I started budgeting every single dollar (duh), and saving for rainy days (double-duh) and… it’s been awesome.
A few wins, all directly related to the fact that I’m now budgeting for the business:
- We spend less frivolously.
- We save for big projects (like the iPad, and Other Big Things).
- We set aside money for fun things, like our meetup this year, where we’ll be doing some wilderness survival training.
- We set aside money for Christmas and birthday presents.
- We set aside money for our Buffer, just in case the revenue stops flowing for some reason (My target is a three-month buffer for the business).
- We can be more aggressive with our hiring.
That last bullet has made all the difference. I see new hires as debt, more or less. I promise I’ll pay them indefinitely, and they promise to totally change their life, and spend (potentially and hopefully) years pouring their heart and soul into YNAB. This is debt in my mind, and I take it very seriously.
So serious, in fact, that I was pretty afraid to hire people. The budget has fixed that. I now see a Category in the Budget that says [redacted] and I get excited about it! I see the funds are there to hire someone, and everything’s giving me the green light.
It’s help me be more aggressive.
And for some of you swashbuckling entrepreneurs that roll in a totally different way, it may tell you to slow down a bit :)
Either way, running the business with YNAB has been one of the single best business moves I’ve made. If your business is YNABable (you don’t have inventory, or significant AR/AP tracking needs, and you don’t need significant reporting on capital), you ought to give it a serious go. You can read how I moved to YNAB to get a step-by-step.