Overview
The proper bookkeeping system can make a significant difference in a Christmas tree grower’s life.
One comment I often hear from growers is “I just want to focus on farming, not bookkeeping.” (If this sounds like you, make sure to read all the way to the end for a special offer from me!)
However, bookkeeping is an integral part of any Christmas tree operation and accurate books are extremely important for many reasons.
For example, proper bookkeeping is necessary for:
- Efficient tax reporting
- Accurate farm profit and loss for future planning
- Precise financial statement for banks or potential purchasers
- Freeing-up time to work on farming tasks
This article will review six popular bookkeeping systems:
- Quickbooks
- Wave Accounting
- Zoho Books
- Quicken
- Microsoft Excel (or another spreadsheet program)
- Paper Records (“shoebox method”)
When I first published this article in 2020, I recommended Quickbooks as the best all-around bookkeeping system for Christmas tree growers. However, in 2021, I discovered Wave Accounting, a free online bookkeeping system that has many of the same features Quickbooks has.
Quickbooks is still the most powerful bookkeeping system and is recommended for large, sophisticated growers. However, Wave Accounting may be the best choice for new or smaller growers who don’t require a full-featured bookkeeping system and are looking for a cost-effective alternative. Ultimately, the best system for a particular grower will vary based on his or her specific needs.
This article is based on my personal experience as an IRS agent, CPA, and Christmas tree grower. I am not being paid or compensated in any way to recommend any of the bookkeeping systems. I’ve used Quickbooks over the years to keep books, prepare financial reports, as well as prepare tax returns. I’ve also used Wave Accounting personally for the past few years. I truly believe Quickbooks and Wave Accounting are two of the best solutions for most Christmas tree growers.
However, new cloud-based bookkeeping software options keep appearing regularly. For example, a new entrant on this year’s list is Zoho Books. Other than Wave Accounting, it is the only other truly free software I’ve found, making it a worthy alternative for new or smaller growers.
1) Quickbooks
Bottom Line
Quickbooks is a full-featured accounting program that is the best choice for large, sophisticated Christmas tree growers because of its customization, robust reporting capabilities, and scalability
Pros & Cons of Quickbooks
Pros
- Full-featured accounting program
- Designed for businesses
- Cloud version can be accessed from anywhere
- Robust reporting capabilities
- Many integrations with other programs, such as Square and Paypal
- Powerful smartphone app for tracking mileage and entering transactions on-the-go
Cons
- Steeper learning curve than other systems
- More expensive than other options
- Initial setup is critical to proper recordkeeping
Quickbooks Analysis
Quickbooks is a full-featured accounting program that is the best choice for large, sophisticated Christmas tree growers. It is specifically designed for businesses and can handle small farms, all the way up to the largest Christmas tree growing operations.
One major benefit of Quickbooks is that it can generate many useful reports. These reports include tax reports for your accountant, detailed profit and loss reports to use for future planning, and reports for any vendors that may require a 1099.
Quickbooks is also extremely customizable. The accounts and reports can be configured in the way that is best for a grower’s individual situation. However, initial setup of Quickbooks is critical because of its complexity; I’ve seen many Quickbooks records that were disorganized and incorrect because the owner didn’t take the time to set up the books correctly or pay an accountant to do so.
Over 7 million businesses use Quickbooks, and it shows in their available technology. Quickbooks’ cloud version is entirely online and accessible from anywhere. It also has many integrations with other programs, such as Square and Paypal. Integrations allow time-saving import of information, such as sales data from Square.
One downside to Quickbooks is that it is more complicated to use than other bookkeeping systems; however, the interface is user-friendly and many free video tutorials are available.
Another downside is Quickbooks’ price compared to other options. Online plans start at $30/month (the “Simple Start” package); however, last year I recommended going with at least the $60/month option (the “Essentials” package) because the Simple Start package has limited reporting capabilities. Quickbooks often runs promotions lowering the price, and if you hire a bookkeeper who uses Quickbooks, you can often get a significant discount by purchasing it through them.
Although desktop software versions of Quickbooks are available, I’d recommend the cloud version (“Quickbooks Online”). Quickbooks Online is always backed-up, so you don’t have to worry about losing data if your computer crashes.
Also, Quickbooks Online can be accessed anywhere, making it convenient for a grower’s accountant to login and run reports from their office. It is also convenient if a grower hires a bookkeeper, as the bookkeeper can login to Quickbooks with a separate username and work on entering transactions from anywhere.
2) Wave Accounting
Bottom Line
Wave Accounting is great Quickbooks alternative for new or smaller growers due to its low cost (free), easy-to-use interface, and decent customization.
Pros & Cons of Wave Accounting
Pros
- Free (as long as you don’t use their payroll or payment solutions)
- True double-entry accounting
- Easy-to-use interface
- Fairly customizable
- Integrates with many bank accounts and credit cards
- Can be accessed from anywhere
Cons
- Limited reporting compared to Quickbooks
- Few integrations with 3rd-party applications
- Accountants and bookkeepers less familiar with it
- No smartphone app
Wave Accounting Analysis
Wave Accounting is a great Quickbooks alternative, especially for new or smaller growers who don’t need a full-featured accounting system and are looking to save money.
The major benefit of Wave Accounting is that it is free! Wave makes money by charging extra for payroll, invoicing, and payment processing services. If you don’t need any of those features, Wave will be completely free for you to use.
Wave Accounting is also fairly easy-to-use, although there will still be a learning curve if you’ve never used a bookkeeping system before. Many growers will likely find Wave simpler than Quickbooks.
Another benefit of Wave Accounting is that it is fairly customizable. Wave lets you update the chart of accounts, which is critical to booking income and expenses correctly. However, Wave has limited reporting capabilities and does not offer powerful, customized reports. The reporting will likely be sufficient for new and smaller growers, but larger growers may be need more customized reports. For example, Wave does not let you create sub-accounts, which leads to a messier chart of accounts. However, this shouldn’t be a dealbreaker for a new grower looking to save money.
Wave Accounting is also entirely cloud-based, making it easy to access from anywhere. However, Wave currently does not have a smartphone app.
One downside is that accountants and bookkeepers are not as familiar with Wave Accounting as they are with Quickbooks. If you hire an outside bookkeeper or your accountant runs reports and makes adjustments to your books, you may want to stick with Quickbooks as almost all accountant and bookkeepers are familiar with it.
Another downside to Wave Accounting is that it doesn’t offer as many integrations as Quickbooks. For example, if you use Square to process your credit card payments, Quickbooks can automatically pull your sales data from Square. Wave Accounting does not have an integration with Square, so you’ll have to enter sales data manually or through a spreadsheet downloaded from Square.
3) Zoho Books
Bottom Line
Zoho Books is great Quickbooks or Wave Accounting alternative for new or smaller growers due to its low cost (free if your revenues are less than $50k/year) and detailed reports.
Pros & Cons of Zoho Books
Pros
- Free (as long as your revenues are less than $50k/year)
- True double-entry accounting
- Very customizable
- Integrates with many bank accounts and credit cards
- Can be accessed from anywhere
- Users report smartphone app is excellent
Cons
- Some users report confusing interface
- Few integrations with 3rd-party applications
- Accountants and bookkeepers less familiar with it
Zoho Books Analysis
Zoho Books is another great Quickbooks or Wave Accounting alternative, especially for new or smaller growers who don’t need a full-featured accounting system and are looking to save money.
Similar to Wave Accounting, the major benefit of Zoho Books is that it is free if your revenues are less than $50k/year. After a grower crosses the $50k/year threshold, plans start at a reasonable $15/month.
Users report that Zoho Books is more complicated to use than Wave Accounting, so if you’re brand new to bookkeeping, you may want to start with Wave Accounting.
One area where Zoho Books excels is with detailed reporting. Unlike Wave Accounting’s basic reporting and lack of customization, users report that Zoho Books is extremely customizable
Zoho Books is also entirely cloud-based, making it easy to access from anywhere. Zoho Books also has a top-rated smartphone app.
Similar to Wave Accounting, accountants and bookkeepers are less familiar with Zoho Books than Quickbooks. If you hire an outside bookkeeper or your accountant runs reports and makes adjustments to your books, you may want to stick with Quickbooks as almost all accountant and bookkeepers are familiar with it.
4) Quicken
Bottom Line
Although Quicken is a powerful tool for personal finances, it is not the best choice for a Christmas tree grower because of its limited capabilities.
Pros & Cons of Quicken
Pros
- Cheaper than full-featured programs (such as Quickbooks)
- Simpler to use than Quickbooks
- More reporting capabilities than a spreadsheet or paper records
Cons
- Designed for personal finances rather than businesses
- No full cloud option available (only software with limited online features)
- More expensive than Wave Accounting
- Few integrations with other programs
- Limited reporting compared to Quickbooks
Quicken Analysis
Quicken is another popular software program that is similar to a digital checkbook.
Although Quicken is probably better than using a spreadsheet or paper records, Quicken is not the best choice for a Christmas tree grower because it is specifically designed for personal finances rather than businesses. Quicken is not true double-entry bookkeeping, meaning that it is easier to make errors in Quicken than in Quickbooks or Wave Accounting.
Quicken is cheaper than Quickbooks, at around $50 to $100 per year; however, the cheaper price shows in its limited reporting capabilities and few integrations with other services.
Also, there is no fully online option available for Quicken similar to Quickbooks Online or Wave Accounting. Quicken only recently released an online tool with limited capabilities that comes with purchasing the standalone software.
5) Microsoft Excel (or other spreadsheet program)
Bottom Line
Microsoft Excel (or other spreadsheet programs) are useful to track and calculate information to put into a bookkeeping system; however, they should not be the primary bookkeeping method for a Christmas tree grower without sophisticated accounting and Excel knowledge.
Pros & Cons of Microsoft Excel
Pros
- Inexpensive
- Customizable
- Easy to use for basic functions
Cons
- Need to know accounting to properly keep records
- Have to create own reports from scratch
- No built-in double checking of entries
Microsoft Excel Analysis
Microsoft Excel and other spreadsheet programs (such as Google Sheets and Apple Numbers) are often very useful tools; however, they should not be the primary recordkeeping program for most Christmas tree growers. A small grower who has extensive accounting knowledge can probably get by with just using Excel; however, a grower who is not familiar with accounting will likely make errors.
Some growers keep a spreadsheet of income and expenses, which they then turn over to their accountant at tax time. The issue with Excel is that there are no built-in checks and balances. A double-entry bookkeeping system, such as Quickbooks or Wave Accounting, has built-in steps to ensure bills are paid, expenses are captured, and bank accounts are reconciled.While all this is possible to do by using Excel, a grower would have to build it from scratch while having extensive accounting knowledge.
Excel can be useful to track information to put into a bookkeeping system, such as a tree count, merchandise inventory, or mileage log. However, it should not be the primary bookkeeping system for most Christmas tree growers.
6) Paper Records (“shoebox method”)
Bottom Line
A Christmas tree grower should not rely solely on paper records due to their ability to be lost or damaged, as well as their limited usefulness.
Pros and Cons of Paper Records
Pros
- Inexpensive
- No technology necessary
Cons
- Not backed up electronically
- Can’t create reports easily
- Easy to make errors
- Often disorganized
Paper Records Analysis
The paper records bookkeeping system is called the “shoebox method” because it often involves stuffing receipts into a shoebox and handing them over to an accountant. This method should not be used by a Christmas tree grower.
Paper records are inevitable; however, a grower’s main recordkeeping system should not be paper records. Papers records can easily be lost or damaged, and are not as convenient to work with as software or online programs.
A bookkeeping program, such as Quickbooks or Wave Accounting, should be used. All paper records, such as receipts, bills, and bank statements, should be stored safely to avoid loss or damage. Preferably, paper records should be scanned and stored online using a program such as Dropbox, Google Drive, or Evernote.
Conclusion
Quickbooks is no longer the best all-around bookkeeping system for Christmas tree growers. While Quickbooks is likely still the best choice for larger growers, new and smaller growers will likely find Wave Accounting or Zoho Books better suited to their needs. However, the best system will vary based on the size of the Christmas tree farm and grower accounting knowledge.
If a grower is unfamiliar with proper bookkeeping practices, they should hire a knowledgeable bookkeeper or accountant for assistance. At the very least, a grower should ensure their books are properly set up to maximize effectiveness and minimize the possibility for mistakes.
I’m looking for 10 Christmas tree growers selling more than 1,000 trees per year who are looking to reclaim hours of their time and reduce stress by having me take bookkeeping off your hands immediately.
– Andrew
The best part is, you don’t have to lift a finger, I’ll do all the tedious accounting entries for you, including any necessary setup or cleanup.
And if you aren’t completely satisfied and get hours back of your time, I will do two things: 1) refund your money and 2) help you find someone who can help you.
I do this because I want every Christmas tree grower to have an amazing experience with me and I’m confident I can deliver on my promise, which is why I’m currently limiting this offer to 10 Christmas tree growers because that is all I can handle at this time.
If that sounds fair, please fill out this interest form and I’ll be in touch!
