Small businesses can gain a host of benefits from accounting software including elimination of manual bookkeeping, time saving, and enhanced efficiency. They can switch over from spreadsheets to a more advanced and specialized accounting software system as their business grows. In this article, we detail the many advantages of accounting software for small business. First, we give you advice on how to go about selecting a suitable solution. Then, we go on to describe five popular accounting software for small business that you can consider for your special needs. You can learn about their key features, benefits, support offered, and pricing schemes.
Small businesses that have only a few employees and little inventory can make do with a free accounting software for small business solution or a low-priced one. But if your business is thriving and you keep on adding clients and employees, then you should take the time to invest in a robust accounting package. You need not worry about using accounting software as most apps have a simple interface and can be managed easily even by lay persons.
Key features of accounting software
- Business tax reporting
- Sales tracking
- Merchant support for credit card payments
- Inventory management
- Integration with existing business apps
You should start your search by looking for a system that is designed for the unique needs of particular industries such as construction, manufacturing, wholesale distribution etc. If there are specific accounting requirements for your industry, then invest in a platform that meets these needs.
Get feedback from users
Shortlist a few suitable apps and contact the users of these solutions. Learn about the advantages and weaknesses of each application, which features are easy to use and more difficult to manage, as well as areas that can be improved. There is no perfect accounting software or one-size-fits-all solution available. Therefore, you need to do your homework properly to weigh the pros and cons of different apps to zero in on the best fit for your small business needs.
Prepare a list of questions to ease your search for the right software:
- Is the solution scalable to meet the growing needs of your company? Can you add extra modules as you go along and need to meet extra demands?
- Can you upgrade the system to a more robust one in the future? Plus, can you easily switch over to another vendor if you are not satisfied with this one?
- You can save a lot of time downloading your banking transactions. Therefore, find out which accounting software is used by your bank.
- Should you try on-premise software or a cloud-based one? With on-premise software, you can keep your data securely stored on your company servers. Cloud-based solutions offer the advantage of anytime, anywhere access. Plus, you don’t have to worry about installation and maintenance. Cloud-based software vendors also take care of updates, upgrades, and security.
- Can you restrict access based on user role? Some of your company employees may have only basic tasks to perform, so you may need to limit the access levels of such users.
- Does the software have a free trial that lets you check out the features before you invest your money? Another advantage of the free trial is you can read the user guide and tutorials in the help section to learn about the usefulness of the system documentation.
You may need to pay for customer support based on which tier you choose. Some vendors offer free support for a limited time initially to help new users learn to use the software. But afterwards you may be charged for accessing support on a per-use, quarterly, or annual basis. Some software solutions have free online user forums where you can ask questions and get your issues resolved.
Extra features you don’t need
As a small business, you don’t need the robust features of enterprise accounting solutions. So, don’t worry about the bells and whistles of the software as you may be charged for including premium features in your pricing package. There are plenty of accounting systems especially designed for small business so you are spoilt for choice.
Ask your accountant
Accounting software is not meant to be a replacement for your company accountant. Rather, it can only make their job easier. You still need an accountant’s expertise and knowledge to ensure your company meets the stipulated accounting and tax legal requirements and filings. Find out from your accountant what reports they need and generate them in the accounting software. You can then deliver them to your accountant online or take printouts if needed.
Use the above tips to select a suitable accounting solution for your small business. To further help you and give you ample choice, we provide in-depth reviews of five leading accounting software apps for small business:
Xero is a market-leading accounting software solution that is designed for the needs of small businesses in multiple industries. Many users name it as one of the handiest tools for managing financial activities. Our own experience is that the solution is user-friendly and offers smart features to make accounting easier and more fun.
Freelancers and small business owners will find that Xero offers the features they need. One big advantage is even lay users can find this application easy to use as it simplifies complex financial concepts. This is the main reason why Xero is so popular in the market. However, if you get stuck with the more difficult accounting concepts, you can take assistance from vendor’s certified advisors.
Key features of Xero include mobile apps for iPhone/iPad and Android, purchase orders, expense claims, financial reporting, free unlimited email support, and inventory management. You can benefit from the 30-day free trial and select from three pricing plans: Starter plan ($25/month), Standard plan ($50/month), and Premium plan ($60/month). Plus, the vendor offers training for new users as well as reliable support via phone, email, and tickets.
2. Zoho Books
Zoho Books is a widely used accounting software solution designed for growing businesses. The system is intuitive and easy to use, and enables small businesses to manage their finances and cashflow. Plus, you can get valuable insights based on which you can make smart business decisions. Zoho Books is part of the Zoho suite of products, which means the company will take care of security, support, and uptime.
Zoho Books can be used to send professional invoices to customers and receive online payments from them. The application is fast and robust, and helps you to control your company’s finances easily. Top features include profit and loss, balance sheets, and cash flow statements.
Zoho Books stands out among the crowd because of its smart design with the features arranged in a simple manner to facilitate easy operation. Similar to other Zoho products, the navigation is easy and you can swiftly move around and view screens filled with info. The dashboard offers quick overviews and visual graphs of your company’s financial data, and you can access the other system features in the tabs located on the vertical navigation toolbar.
Zoho Books provides a 14-day free trial and three pricing plans: the Basic plan costs $9/organization/month, the Standard plan is priced at $19/organization/month, and the Professional plan costs $29/organization/month. The company offers training to new users as well support via phone, tickets, and email.
3. QuickBooks Online
QuickBooks Online is an ideal accounting application for small businesses and freelancers. This easy-to-use integrated solution simplifies small business accounting. It offers full features to up to five users and limited features to an unlimited number of users. For these reasons, it used by numerous finance officers, solopreneurs, bookkeepers, accountants, and small business owners.
QuickBooks Online automatically syncs your company’s financial profile to a single dashboard where multiple users can look at detailed reports of the organization’s performance. This app creates profit and loss and trade sheets and offers billing and invoice features, all of which are mobile compatible and print friendly. On top of that, you can create your own custom reports and feeds from within the dashboard.
You can use the QuickBooks Online dashboard to add users, edit permissions, and track invoice details, payments, and sales history. Additionally, the system integrates smoothly with Intuit GoPayment and QuickBooks Online Payroll. There is a convenient 30-day free trial and two paid plans: the Essentials plan priced at $18/month for the first six months and the Plus plan which costs $24/month for the first six months. Finally, support is offered via phone channel.
FreshBooks is used by more than five million businesses to streamline time tracking and client invoicing. Freelancers can also use this solution simplify their collection and sales cycle. Another advantage is you can custom brand your financial documents with your company logo and colors. This software is popular because it offers useful features at an affordable price.
FreshBooks is a reliable and fast application that makes accounting fun. Small businesses can use it to handle invoices and recurring subscriptions and invoices easily, and to collect online payments from customers. On top of that, the app enables Google Checkout, PayPal, and credit card. Plus, you can seamlessly integrate it with leading third-party business systems. With this single system you can manage all your company’s finances and accounting tasks, which means you don’t need pay for maintaining multiple software applications.
FreshBooks offers a 30-day free trial and three paid packages. They include the Lite plan ($15/month) for billing up to five active clients and the Premium plan ($50/month) for billing up to 500 active clients. You can get discounts for annual subscription. Finally, you can get training for new users and support via phone and email.
Wave is popular in the market because it is a free app. At the same time, it does not lack useful features as it combines accounting, invoicing, and receipt scanning in a single compact package. This solution is recommended for small businesses, solo entrepreneurs, freelancers, and consultants.
Wave is easy to set up and use. It offers an insightful dashboard that displays everything you need to know about your company’s finances. The solution simplifies accounting and invoicing processes, and makes it easy to track invoices, chase payments, and manage employees and taxes. You can utilize it to create and send out professional-looking invoices, estimates, and receipts. Plus, you can use its tracking features to closely monitor your company’s finances.
Key features of Wave include payroll, yearly record keeping, direct deposits, direct credit card payments, and tax calculations and deductions. As mentioned above, Wave is a free product. However, for credit card and payroll processing services in select countries, the company has a pay-as-you-go payment scheme for companies. Finally, the vendor offers reliable support via phone, tickets, and email.