Whether you're just starting your micro business now or you're looking for ways to better manage your existing business, one of the most important things you have to do is figure out a way to manage your business financials and track your business health.

The task definition itself is not a clear and may mean different things to different businesses, whether you¢â‚¬â„¢re a contractor that bills to one customer on a weekly basis and wants to make sure that your tax and super obligations are in order or you¢â‚¬â„¢re in retail and need to keep track of the profitability of different products or the conversion rate of your online store.

We will also have to assume that doing nothing is not an option, you cannot run a business without any kind of bookkeeping whether you do it yourself or outsource the job, and it must be done in one way or another.

Let's look at the alternatives here, in no particular order:

• Pen and paper - manually keeping track of your books, we can throw in using Excel in this category.

This option is still quite popular and it has one big benefit - dollar cost is very low

(Although even the cost of Excel is more expensive than some other options)

On the other hand it is complex and time consuming and it also doesn't bring many of the business insight that other option may.

• Shoe box - you collect invoices, receipts and other documents and send them off to your accountant to process them for you and use the information later for your tax reporting.

This option has one big benefit, it is simple, and you really don't have to do much except make sure you don't lose or forget any of these documents.

On the other hand it is probably one of the most expensive ways to do it and it fails to give you any insight to your business. (Of course your accountant is always a great source of business information, but that is usually outside of this specific activity)

• Desktop accounting software - such as the well known QuickBooks.

These packages are reasonably priced (sometimes a little more than that); they have multiple versions from invoicing only to full blown enterprise management packages.

They usually require some kind of training to begin using them or at least a basic understanding of accounting concepts.

When used correctly they allow a good insight to the financial status and health of your business

• Online accounting software - such as Saasu, Xero and many others are available today.

These solutions allow you to use a web browser to access your accounting system from anywhere, they store your company data securely online and usually provide a simple user interface, which is easy for beginners and probably requires a little less accounting knowledge to get you started.

The main drawbacks are that they usually have higher ongoing costs and that they lack a lot of the functionality that is available in other desktop solutions.

• Outsourced bookkeeper - this is similar to the shoebox option, where you send you documents to your bookkeeper, or have them enter the data on your accounting software.

It makes it simpler for you but costs more and provides you with less insight into the workings of your own business.

• In house bookkeeper - a full time or part time employee of your company.

In this case your own employee is tasked with the bookkeeping in an ongoing manner; they will use your accounting software to enter the transactions into the system and provide you with reports and other required information.

This is probably an over kill for most micro businesses, who hire few, if any, employees. This option makes it easier for you, as you're assured that bookkeeping is handled, but it has the highest costs and is not certain to provide the best business insight for you.

• Micro business management software - a unique offering from Nominal accounting

Desktop software that helps you manage all aspects of your micro business:

1. Accounting: including simple bookkeeping, invoicing, payroll and time billing
2. Online sources such as payments systems, invoicing, project management and CRM systems
3. Business dashboard: including your financials, marketing and social aspects all on one place.

This option obviously brings the greatest insights to your business as well as the simplicity that is required by a micro business owner.

Study the chart below to see which solution makes more sense for you.