Outright does three things, for free, within an extraordinarily clean, understandable interface. It tracks income and expenses. It creates reports. And it uses that data to give you an estimate of what you might owe in taxes. Though you can enter some data manually, the site—it's Web-based, so there's no software to install—is really built to import financial information that comes from your participation with Outright's partners, like Freshbooks (invoices), Shoeboxed (receipts and business card management), and oDesk (pay-tracking for remote contractors). Best, it does all of this for free.

I hate it when I have to use a gargantuan application for a few simple tasks. Besides the unnecessary expense, I'd just rather use a solution that meets my modest needs and not much more. I'm self-employed, which further simplifies my needs. I have no employees and no inventory, and would rather not deal with an accounting solution that tracks information (or the lack thereof) related to those elements.

And I'm not alone. According to Bootstrap, 75 percent of the 20 million small businesses in the U.S. have no employees. So it built Outright as a solution to handle the core requirements of the myriad small, simple businesses that have been operating for awhile or that have sprung up in the current economy. It's a far cry from QuickBooks and Peachtree, but not everyone needs that level of accounting muscle.

Setup and Features
Setup of Outright was always easy, but is now even easier than when the site launched. You simply click the Settings link and follow the instructions for integrating external data with Outright (usually, it just involves entering login information for the other service). Outright will download current information on a set schedule.

Outright has added a crucial element: the ability to download transactions from your business credit card, as well as from PayPal, Expensify, and eBay. Further, it's adding smart categorization. That is, the site automatically matches transactions to appropriate categories. Those that are unrecognized remain uncategorized; you can go in and match these yourself.

That information lands in one of two places: your income register and your expense register. Click on the Income tab to see what's been brought in. This screen looks like a checkbook register, with lines for outstanding invoices on the top and payments received below. To see an invoice from partner site Freshbooks, you just click the View link of the corresponding line. You can also delete invoices by clicking a link. Unfortunately, you can't add invoices in Outright that are sent from outside of FreshBooks. You can, however, manually enter payments received.

The Expenses tab works similarly. A register displays any expenses that have been downloaded, and you can add your own. Outright originally did not allow you to enter your own categories, in order to keep things simple for tax reporting, but it's recently added that ability.

The Taxes page is as simple and understandable as the rest of the site, but it's where some of Outright's most useful, powerful machinations lie. Outright calculates the tax impact of your income and expenses and tells you how much your quarterlies should be (employing a conservative estimate).

On this page, you can also see what your profit is. Further, three lines display the approximate tax you owe, taxes already paid through this quarter, and your suggested tax payment. Once you've paid your taxes and tell the app (unfortunately, you can't pay taxes through Outright itself), that payment appears in your expense register and in a box at the top of the page with your other quarterlies. When tax prep season comes, you can see a pre-populated version of your Schedule C.

It would be nice if Outright did something similar for state taxes. The company says that's coming, as early as the 2009 tax season, for some states. Exports to tax prep programs also wouldn't be amiss; that capability is also on the drawing board.

Such a simple program doesn't require a spate of reports, and Outright supplies only what's necessary. It previously provided a Profit & Loss report, Income by Customer, Expenses by Vendor, and a 1099 report (if you're paying contractors more than $600/year). Two new ones have been added: Income by Category and Expenses by Category. Customizable graphs make it easy to see what's up , and graphs are available now for all reports.

Bottom Line
Half of all small businesses are still not using accounting software. Perhaps one reason is that there aren't a lot of accounting applications that require only an average of 26 minutes per month (by Bootstrap's calculation; the company is working on reducing that to 15 minutes). In fact, I haven't run into another financial application that handles accounting like Outright does, with this level of skill, usability, and elegance. It's still young, and still lacking in some capabilities—and some partner choices—that would broaden its appeal. But its innovation, security, and simplicity make Outright a good choice for the self-employed and very small businesses, especially given its new ability to download credit card transactions.

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