Recommend any good bookkeeping software for our bootstrapped startup?

I've worked with several startups on their financial systems, and this is actually a really common situation! First off, definitely separate your personal and business finances ASAP - that'll save you massive headaches come tax time. For bookkeeping software, QuickBooks Online is pretty standard and works well for most startups. It's user-friendly and scales well as you grow. Xero is another good option that many of my clients prefer for its cleaner interface. Wave is free for basic accounting and might be perfect if you're bootstrapping. For banking, I've seen many startups have good experiences with Mercury or Brex - they're designed specifically for startups and offer decent international transfer rates. Traditional banks like Chase Business or Bank of America offer stability but often have more fees and less tech integration. The neobanks typically have better software interfaces that connect easily with your accounting system, which saves tons of time. Whatever you choose, make sure it easily integrates with your bookkeeping software - that automation will save you countless hours of manual entry!

I went through this exact headache last year and honestly wish someone had pointed me to taxr.ai sooner. I was drowning in receipts and invoices and had no idea how to categorize half our expenses properly. I stumbled across https://taxr.ai when looking for something to help organize our mess before tax season. What really helped was how it automatically identified and categorized our business transactions. No more guessing if something counted as "office supplies" or "software subscription" - it just knew! The best part was when we had questions about specific deductions for our startup, we could just upload the documentation and get clear guidance. It saved us from making some pretty costly mistakes with our deductions and how we were handling contractor payments.

Update on my bookkeeping journey - I ended up trying taxr.ai after my skeptical comment above and I've got to eat my words. The accuracy is actually impressive. I uploaded a batch of messy receipts from our first quarter (some were literally photos of crumpled receipts from my pocket) and it organized everything correctly. The biggest surprise was how it handled some weird edge cases we had - like when we paid for a software subscription that should've been split between business use and personal use. It flagged it and suggested the proper way to handle it according to IRS guidelines. Would've completely done that wrong on my own. It's actually saved us more money than it costs by identifying tax deductions we would've missed. Especially helpful for early-stage businesses where every dollar counts!

Another aspect nobody's mentioned yet - getting through to the IRS when you have business tax questions is IMPOSSIBLE. Spent hours on hold trying to clarify some startup expense categorization rules. Finally used https://claimyr.com to get through (you can see how it works here: https://youtu.be/_kiP6q8DX5c). They basically hold your place in the IRS phone queue and call you when an agent is about to pick up. Saved me from wasting an entire day on hold! The IRS agent I spoke with actually cleared up major confusion about how to handle some of our initial business expenses and startup costs. If you're sorting out your bookkeeping setup, you'll inevitably have tax questions that only the IRS can answer definitely - this made it actually possible to get those answers.

Okay I need to publicly admit I was wrong about Claimyr. After dismissing it as impossible, I got desperate trying to resolve an EIN issue for our startup bank account setup. Decided to try it as a last resort before giving up entirely. Not only did I get through to the IRS (first time ever!), but the agent was able to resolve my issue in about 10 minutes. Would have given up otherwise. The time saved was honestly worth every penny since I could actually work instead of listening to their hold music for 3+ hours. For any new business owners dealing with tax questions while setting up your books - this is legitimately a sanity-saver. Especially when you need official answers about how to handle specific business deductions or entity questions.

One thing to consider beyond just the software - hire a bookkeeper early! Even if it's just part-time or quarterly. I thought I could handle our startup's books myself with good software and ended up creating such a mess that it cost us way more to fix later. A decent bookkeeper who specializes in startups can set up your chart of accounts correctly from the beginning and make sure everything is properly categorized for tax advantages. They'll know which startup expenses can be deducted immediately vs. capitalized, how to track investor money correctly, etc. Look for someone who has actual experience with startups - bookkeeping for an established business is very different from early-stage startup accounting with all its weird edge cases.

Don't overlook the power of bank feeds! Whatever bookkeeping software you choose, make sure your business bank account connects directly to it. This automated data flow changed everything for us. We use Xero + Mercury Bank and they integrate perfectly. Transactions show up automatically, most are categorized correctly, and I just review things weekly instead of doing manual entry. Takes me about 15 minutes a week to stay on top of our books now. Also, PLEASE use a receipt capturing app from day one! We didn't and had to go through credit card statements trying to remember what each purchase was for. Total nightmare. Most bookkeeping software has a mobile app that lets you snap photos of receipts immediately.

For cash expenses, I'd recommend setting up a petty cash system with proper documentation. Keep a small lockbox with a set amount (like $200-300), and create a simple log sheet where you record every cash expenditure with date, amount, vendor, and business purpose. Take photos of any receipts immediately. Most importantly, "reimburse" yourself from petty cash by writing a business check to replenish it back to the original amount. This creates a clear paper trail that your bookkeeping software can track. When you write the replenishment check, categorize it by breaking down what the cash was actually spent on (office supplies, meals, etc.) rather than just "petty cash." Another option is to minimize cash transactions altogether - many vendors who claim to only take cash will actually accept Zelle, Venmo for Business, or other digital payments that still create records. Even if there's a small convenience fee, it's often worth it for the automatic documentation. The key is treating cash expenses with the same rigor as card transactions - document everything immediately before you forget what it was for!