Why Monarch Might Be a Great Option for Your Business
Monarch is an incredible tool and app that many financial coaches recommend for both personal and business financials. As a financial coach, I've noticed that Monarch is a viable solution for business owners. I've consulted with bookkeepers who have used Monarch for their business clients, and they're all for it.
Pros and Cons of Using Monarch for Your Business
When considering Monarch for your business, it's essential to weigh the pros and cons. On the plus side, Monarch offers pre-created categories that can be customized for your business needs. It's also easy to set up and use, even for those without accounting or bookkeeping experience. Additionally, Monarch can be used for both personal and business finances, but it's recommended to have a separate login for business finances if you have employees or are filing as an S Corp and paying yourself a regular W2 salary and taking owner draws.
On the downside, Monarch doesn't allow you to toggle between multiple budgets within the same login, requiring separate logins for personal and business finances. This can become cluttered if you have multiple partners or family members involved in your business.
Setting Up Your Business Categories in Monarch
To get started with Monarch for your business, create a new login for your business account if you don't already have one. Set up your sources of income, such as courses, products, etc. Customize the default categories to fit your business needs, and consider deleting unnecessary income categories if you have multiple sources of income.
Why Monarch is Useful for Business Owners
Monarch is an excellent tool for business owners as it helps track expenses and stay organized. It allows you to set budget goals and track your progress, making it easy to manage your finances in one place. Whether you're a small business owner, LLC, or have a personal budget, Monarch is a suitable solution.
Monarch Account Setup and Management
When setting up your Monarch account, it's essential to delete personal categories and create custom groups relevant to your business. Examples of custom groups include payroll, employees' contracts, professional licenses, office expenses, cost of goods sold, subscriptions, and marketing subscriptions. Create as many categories as needed to track business expenses and name them whatever you want.
Transaction Management
Monarch allows you to attach receipts and attachments to your account, and transactions feed in with a day or so lag. You can attach receipts or attachments for transactions, use tags and notes to explain transactions and provide context, and download transactions with notes for CPAs, bookkeepers, or other accountants.
Budget Management and Reporting
Monarch's budget management and reporting features enable you to create reports to see where you're spending the most money, track trends within groups, and analyze trends and changes in cash flow. You can create reports on cost of goods sold minus income, regular paycheck and owner draws, and advertising and promotions. See the total spent during a selected time frame, change dates to select different time frames, and analyze trends and changes in cash flow.
Monarch Money Reports and Features
Monarch offers various reports and features that can help you manage your business finances. You can run reports on income, employees, and wages to see the impact of new employees on business finances. You can also run reports on merchants, tags, and amounts to gain insights on specific aspects of business cash flow.
However, Monarch has some limitations. It doesn't track transaction processing fees, which may require additional accounting outside of Monarch Money. Reports are not visually appealing and cannot be easily exported as PDFs, making it difficult to share with accountants or bookkeepers. CSV files can be downloaded for Excel analysis, but attachments may not be included.
Features
Monarch offers various features that can help you manage your business finances, including the ability to track all business accounts, including credit cards, in one dashboard. You can set and track recurring calendar events for bill payments and other regular expenses, use the goal-tracking feature to set and monitor financial targets, and enable budgeting to plan and track business cash flow. You can also add financial advisors or bookkeepers with access to Monarch Money for reporting and analysis purposes.
Monarch Business Budgeting Tool
Monarch's business budgeting tool helps you ensure that all aspects of your business are accounted for, including payroll, licenses, office expenses, and more. The budgeting feature allows you to play with different scenarios and projections on a monthly or yearly basis. You can also use the forecasting feature to enter your own forecast and see how it affects your business.
Monarch provides amazing reports to help you understand your business finances, including total income and expenses, recurring and non-recurring income and expenses, and fixed expenses. However, Monarch does not replace bookkeeping software, as it does not account for transaction fees. It does provide tax benefits, including tax projections and readouts.
Using Monarch for Business Budgeting
Monarch is suitable for small businesses, LLCs, and personal budgets. I offer a workshop on creating a budget for small businesses, including advice on managing inconsistent income and personal finances. In the workshop, you'll learn how to create a budget, manage business finances, manage personal finances, set up a budget for inconsistent income, and make tax projections. Sign up for the workshop and newsletter to stay updated on new content and tutorials on using Monarch for your business.
Comparison to Other Bookkeeping Tools
I'm open to creating comparison videos and tutorials on using Monarch for your business, based on user feedback. If you have a preferred bookkeeping tool and would like to see a comparison, let me know in the comments. My clients use various bookkeeping tools, and comparisons can be run on these tools to help small business owners make informed decisions.