How Budgeting Software Works

Budgeting a small business can be a bit more difficult than a personal budget, because income isn't as normalized.
Budgeting a small business can be a bit more difficult than a personal budget, because income isn't as normalized.
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Budgeting software is probably something most of us don't think about too often, but according to most personal finance experts, it's one of the most important tools to ensure financial success. Creating and sticking to your own budget can be difficult, which is exactly why budgeting software can be handy both on a personal and small business level. It can help you meet financial goals to make new purchases and give you long-term views of your investments, your spending habits and perhaps most importantly, help you tuck away a little bit in case of emergencies. Most budgeting software is connected directly to your bank account and works essentially like a smart checkbook that automatically balances and suggests ways to save money.

Budgeting software has been around for a long time. In fact, one of the first programs on home computers, the spreadsheet, was quickly turned into a way for people to balance their checkbook. Software like VisiCalc, which was the first spreadsheet program for personal computers, gave users a chance to see their data in front them in a clean, simple and orderly manner [source: Hormby].

The rise of the personal computer is also the origin of home budgeting software. When Microsoft DOS and Windows systems gained popularity, so did programs like Quicken, which were tailor-made to help track your budget.

Since then, a lot has changed. The software has become more accessible -- you can now access budgeting software directly online, through a download, CD-ROMs and even on your smartphone. One of the first programs to hit the market, Quicken, is still one of the leaders in the field -- and the company behind it, Intuit, is also leading the Web application push with the service it acquired in 2009. integrates all of your accounts online so they can be accessible from anywhere [source: Wortham].

And this is exactly where many of these services are heading. Combined with a push for more mobile applications designed to keep tabs on your expenses and track your purchases, the main focus of budgeting software is about availability and ease-of use.

There are still a lot of options, and many are better suited for small business than they are for personal or private use. Over the course of this article, we'll look at how some of the most popular software works and how it helps you keep track of your finances.