Here's what's lead me to this conclusion. At beginning of this year at our house we went through a traumatic upgrade from a 2004 version of QuickBooks to QuickBooks 2011. My wife Levi, the accountant in the family (she has a 5 year accounting degree so accounting is a area that I don't argue about... I just say, "yes dear") and since 2004 she has refused to upgrade because there were some accounting features in the new versions that she didn't like. In 2010 I got her a new Windows 7 laptop which she loves. The only problem is QuickBooks 2004, of coarse, won't even install on Windows 7. Keeping her old Windows XP laptop going that is literally held together with duct tape (she slammed it in her car door a a while back) is quickly disappearing as an option. I finally convinced her to upgrade to QuickBooks 2011 that will run on Windows 7. There was a lot of huffing and puffing and swearing at QuickBooks and staying up until 1 AM but after a month or so we finally finished the transition.
Going through this process of of upgrading made it clear to me that we use only a fraction of the features in QuickBooks and at the end of the year we end-up with a handful of spreadsheets so why not just do the whole job start to finish with spreadsheets? I'm sort of a minimalist at heart. I run my part of the world (PFRE Media LLC) entirely with a few spreadsheets and am totally convinced that's all you really need. Levi doesn't read this blog or I'd probably be in deep trouble for dismissing the importance of QuickBooks.
Nowadays if you are willing to put your spreadsheets in the cloud, Google Docs provides a wonderfully simple, effective and free spreadsheet application that is compatible with MS Excel and Numbers on the OSX. They even have a bunch of useful templates, one of which I have linked to the above image. I was amazed at all the spreadsheet templates google docs has and since you can download them as .doc files you can open them with Excel or Pages and use them on your desktop.
I have a spreadsheet for monthly expenses, monthly income, a yearly budget spreadsheet and a few other spreadsheets for miscellaneous tracking. You can download any credit card statement, bank statement or PayPal statements and put it into your spreadsheet. But I'm old fashion in that I don't keep my financial spreadsheets in the cloud. I use Numbers on the Mac ($19.99) and keep them right here on my desktop. I also don't use those features in QuickBooks where you give it your account numbers and passwords and it sucks down all your records. That's just too freaky for me.
The main thing is when you are in business for yourself you MUST keep good financial records and have a budget.
What do others use for their financial tracking?