If you simply want to keep track of your cash inflow and outflow, you only need to monitor your business checking, and possibly savings or loan accounts.

On the other hand, if you want thorough, accurate reports to help you fully understand your business's monthly cash flow (business) (Deposits into and withdrawals from your business accounts, which you can find in the monthly cash flow report in the Reports area.) or the profit and loss statement (A report that shows the income, expenses, and net profit of a business for a specific period of time.) , you should create an account in Money for each statement you receive in the mail (bank, broker, or credit card) as well as for each asset, such as a delivery van, and liability, such as a loan.

When you use Money to track your business and personal finances, you must designate each category as business or personal. You can see your business categories in the section of the Chart of Accounts (List of your business accounts and categories in Money. Accounts are listed as assets or liabilities. Categories are listed as income or expense.) . You can see both personal and business categories on the Categories & Payees page.

Money starts you off with a set of business categories displayed in the Chart of Accounts. These categories are tailored to the type of business you described in the Money Setup Assistant.

Money also distinguishes between individual income and expense categories to help you track various aspects of your business. For example, the Sales by Item report is based on the income category you designate for each product or service.

Decide how much past account information you want to include in Money. First, consider whether you want to use Money to help with your tax returns. If so, you'll need to record transactions (cleared checks, deposits, and so on) at least to the beginning of your tax year, usually January 1. If you don't plan to use Money for taxes, the date you start tracking transactions is simply a matter of preference. The earlier you start recording transactions, the more reports and information you will be able to see.

In Money, a payee is any individual or business with whom you exchange money. You can identify business payees as either customers, vendors, or both. You can store payee data such as address, phone number, and transaction history of each payee. Money uses this information to make it easier for you to do such tasks as create or print an invoice and track the status of invoices.

You can also access information about all of your payees in Money Contact Manager (based on the Windows Address Book). Use Money Contact Manager when you want to see customer or vendor details (such as invoices due) without having to open Money. It's quicker, and because you can synchronize Money Contact Manager with Money, it's easy to bring up to date.

If you enter information about the products or services your business offers, you can then use Money to create invoices, track income and inventory, and prepare for your taxes.

Go to the View your products and services page to set up the items you sell. Fill in such details as how much you'll charge for the product or service, and if it's usually taxable.

Also, assign an income category to each item so Money can give you accurate sales and other reports. For example, Money uses the income category information to prepare a Schedule C tax form report.

When you create an invoice, Money will provide the lists you've created of products, services, and customers. You specify the quantity or rate and Money automatically calculates the amount, adds the tax if applicable, and provides an invoice total.

You determine whether a product or service is usually taxable, and then you set the usual sales tax rate by customer or the actual sales tax rate by item when you prepare the invoice. This allows you to sell a taxable item to a retail customer with full tax and to a wholesale customer with no tax, or to charge a different sales tax depending on the customer's location.

Money can analyze your business profitability with a profit and loss statement (A report that shows the income, expenses, and net profit of a business for a specific period of time.) and report on the overall financial health of your business with a balance sheet (A financial statement that shows a company's assets, liabilities, and owner's equity at a given point in time.) . With the cash flow report, you can see the flow of cash into and out of your business accounts. You can also see a list of bills your business owes, and the sales you made.

As a self-employed person, you can deduct many business expenses, which can reduce your tax liability. The more deductions you find and track, the more tax you may save.

If you faithfully categorize your income and expenses and use Money to help determine which expenses are deductible, Money provides detailed reports for tax time, such as a Schedule C report and a Tax Software report.