Ask YC: Accounting suggestions - how do you do it?

Once you start making money I think the best thing to do is hire an accounting firm or internal accountant/bookkeeper.

I recommend Quickbooks (the desktop version) if you are doing it yourself and/or have multiple businesses. If you want your partner(s) and/or accountant(s) to have easy access, Quickbooks Online is good, though it has some limitations. I've always used TurboTax business without any problems (and TurboTax personal for that matter).

I always use the Desktop versions of TurboTax. I don't think there is an online business version, but if there is, don't use it. You want that CD so that if you need to amend 5 years from now, you can use it.

For Schedule C and supporting documentation for Quickbooks I use Excel. I don't put every transaction into Quickbooks because that is crazy. Every so often, depending on the business, I reconcile the spreadsheet with my bank accounts by exporting data from underlying billing systems or PayPal or whatever. Then I put the aggregate values into Quickbooks.

For Schedule C, I have a spreadsheet that I've tweaked over the years to make doing my taxes really easy. I can go into more detail if you want.

I have keep scanned and paper copies of everything. I know it is anal, but it makes me feel good and it is proved its weight in gold in several situations.

I also highly recommend PayCycle. It integrates right into QuickBooks and makes doing everything associated with employees super simple.

Btw, I have had my books professionally audited once, and there were no problems.