- The Best Accounting Software to Suit Every Business Size
- What is accounting software
- Features you should look for in accounting software
- Accounting software for small, medium and large businesses
- Best accounting software for large businesses
The Best Accounting Software to Suit Every Business Size
There isn’t a shortage of accounting and bookkeeping software. However, like with most things, it is important that you pick the right one for your needs and at a price point that makes sense for your business. For instance, you wouldn’t take football equipment to play golf. Unfortunately, many entrepreneurs choose the wrong business accounting and bookkeeping software. As a result, they spend a lot of time and money trying to “fix” it and get different software to work with each other.
What is accounting software
There is rarely a one size fits all approach. This article will help you to choose the right accounting software for your business and tax requirements.
What is accounting software?
Over the past few years, we are seeing more people choose to handle their accounts without the aid of an accountant. For instance, they use software such as Quickbooks, Freshbooks, Sage 50 and Xero. We will delve into the benefits of each accounting software later in this article.
Notably, medium to large businesses tend to have highly complex needs. As a result, they still use accountants. However, accountants still use some of the software mentioned above in order to make their job more efficient.
Sadly, some entrepreneurs still use spreadsheet software or a notebook for their accounting needs. This isn’t just inefficient but it can also be dangerous when their business is audited. Statements such as “Sorry I lost the receipts” or “The notebook is here somewhere” will simply not work with tax collection agencies. Secondly, as your business grows, there will come a point when you might want to seek financing or form a partnership. Having accurate records of your accounts can make a big difference between securing a deal or having it slip between your fingers.
Now that we have determined the business value of using accounting software, it is worth taking a look at the features you should look for. We will then breakdown the top accounting software on the market and how businesses large and small can use them.
Features you should look for in accounting software
Automation is enabling businesses large and small to get more done. In the past, a company might have a whole department dedicated to accounting. However, we are beginning to see less of that. Therefore, the top feature you should look for in any accounting or bookkeeping software is one that has many automation features.
After all, there is little point in buying software which still requires a lot of input from yourself. A good piece of software is like an employee. Moreover, the more heavy lifting your accounting software does, the lower the risk of error. As a result, while other entrepreneurs sweat during tax time, you would be able to put your feet up in the confidence that it is all taken care of.
Fortunately, many accounting applications are adopting a feature which automatically updates based on the tax laws of your jurisdiction. For instance, in the United States taxation laws vary from state to state. Plus, if you deal with international customers, this can add an extra layer of complexity. Moreover, if the taxation laws change, it means that you have to adjust in order to stay compliant. Unfortunately, this causes some people to get into trouble after filing their taxes. Ignorance isn’t an excuse in the eyes of the law.
In order to combat this issue, accounting software developers are beginning to incorporate the ability to change how it processes invoices based on the unique needs of the business owner. Moreover, some have mobile apps in order to automatically record car mileage and store receipts with a snap of your smartphone camera.
As touched on earlier, any accounting software you choose has to have a mobile version. This is because you may need to record a receipt, make changes or make a note of a transaction at a moment’s notice. Moreover, accounting software which don’t have a mobile version tend to be archaic and likely to lose support in the near future.
As your business grows, so do the number of transactions. It is easy to lose track of invoices, and ensure that they are being paid on time. Humans forget, but computer’s don’t. Therefore, your choice of accounting software needs to make it easy for you to invoice clients and automatically send reminders to non payers.
As the business world becomes more software driven, there would be an increasing need for accounting software to easily integrate with other software and web apps. For instance, Zapier can be used to automatically pass information between web apps, automate customer service and increase the features of your accounting software. For instance, service providers can set Zapier to automatically pass a customer to their scheduling app after they pay an invoice. There are an endless number of ways you can integrate your accounting and bookkeeping software with apps like Zapier.
In the near future, business success would rely heavily on an entrepreneur’s ability to choose the right software and systems in order to increase efficiency. In the past, hiring superstar performers made a big difference.
You can get ahead of the trend by choosing the right accounting software from the options below.
Accounting software for small, medium and large businesses
As stated earlier in this article, I am yet to come across a true ‘one size fits all’ accounting software. Taking this into account, I thought it would be useful for you to see the best accounting software based on business size.
Best accounting software for small businesses
If you happen to be a freelancer, sole trader or other small business owner you might like the power, simplicity and low cost of the cloud based accounting software below.
Kashflow is a popular web based accounting software which is popular with small business owners.
The power of Kashflow lies in its’ simplicity. Once logged in you are given a visual overview of how many invoices are yet to be paid, and the general financial health of your business. Moreover, you can see the month-to-month cashflow of your business. Therefore, you can look back in time and see which months are lower than others and use this data to inform your growth strategy.
Interestingly, you can set Kashflow to automatically remind customers to pay an overdue invoice. You can even customise the template so that it retains the unique voice of your brand.
One of the best things about Kashflow is the mobile apps available for it. Whether you have an iPhone, iPad or Android device, you get all the features of the desktop version. Importantly, they are secure, leaving you with the confidence to make changes in a matter of seconds. For instance, you can send an invoice to any email address while on the move or make changes to payroll.
Plus, when it is time to file taxes, Kashflow will generate a document which meet the standards required by top tax agencies such as the IRS and HMRC (UK).
In order to automate the accounting process, Kashflow integrates into various software such as PayPal, Stripe, and Dropbox. Therefore, you don’t have to copy transactions over or pay more for a complex solution for delivering files after receiving payment. Cashflow ensures that your accounting process runs smoothly. And if your needs become incredibly complex or you need tax advice, you can speak to an experienced accountant without leaving the app.
Kashflow pricing begins at $8/£7 permonth and stops at $20/£18 per month for those that need all features.
Xero offers similar functionality to Kashflow; however, it differs in the sense that it offers more features at lower price points. Moreover, Xero is one of the top rated accounting software for small businesses. As a result, it has a lot more integrations with other web services. Therefore, there is a good opportunity to automate a large part of your business. Moreover, you can schedule payments and connect your bank, PayPal and other payment sources for automatic recording and tracking.
Xero’s mobile app experience is second to none and incredibly simple to use. If you know how to send an email, you already know how to use Xero. Everything is beautifully presented and enables you to have a quick glance at the financial health of your company.
Finally, when it comes time to file tax returns, Xero enables you to print off reports and send them to your tax collection agency.
Xero offers a 30 day free trial which comes with all features. You can even add additional members during the free trial. Pricing begins at $9/month and goes all the way up to $70 for their advanced package. If you are a small business owner or self employed, the $9/month package would be suitable to your needs. You can always upgrade as your business grows.
Best accounting software for large businesses
The accounting needs of a large business are very different to that of a large businesses. For instance, a large business might need its’ accounting software to integrate with that of suppliers, take payments from a range of machines etc. Therefore, accounting software for large businesses isn’t just more expensive, but they require a knowledgeable professional to manage the software.
Acumatica is an ERP piece of software, and it’s functions go beyond accounting. ERP stands for “Enterprise Resource Planning”. As a result, Acumatica can be used to handle manufacturing, marketing, accounting etc. The power lies in the fact that because it is integrated into one solution, everything flows seamlessly. Plus, it is a web app; therefore, employees can login from anywhere.
Managers like Acumatica because it is easy to check on the entire performance of a company, make changes and see points of improvement. Moreover, due to the fact that it’s browser-based, your company doesn’t have to buy expensive custom hardware or have issues with compatibility.
Prior to ERPs such as Acumatica hitting the market, companies had to have a room full of servers and pay a technician to manage it all for them. This didn’t just increase costs, but it led to some downtime. On the other hand, with Acumatica your accounting software and other key components of your business are securely stored in the cloud. You can set user permissions so that what your high level employees see is different to that of the intern.
If you were to buy a subscription for each piece of software separately, it would cost tens of thousands per month. However, with Acumatica you are charged based on the size of the application and the resources used. As a result, pricing is fair and Acumatica grows with your business.
AccountMate shares some similarities with Acumatica. It differs in the sense that it is very customisable. Think of it like Lego. As your business grows and the needs change, you can pick and choose the “blocks” you need in order to maintain efficiency. Moreover, you can choose to either host the software on-site or in the cloud. As a result, it fits around your company.
Interestingly, AccountMate have a range of free video tutorials hosted on their site so that people can get started right away. One criticism I have of their software is that the design looks a bit dated. It makes it easier to navigate; however, it won’t be winning any design awards.
One of the most powerful features AccountMate has is that it allows for complete and total control of every part of your business. Moreover, if you need a feature which isn’t available, they can build it for you. Unlike some ERPs, they built the entire system from the ground up.
Therefore, if your business was to grow into one as complex as Amazon, AccountMate would be able to grow with you.
As you can see, accounting software for medium to large businesses requires more features than accounting software for small businesses.
Ideally, your choice of software should fit the stage your business is in. If you get one that is too fully featured, you end up paying too much. On the other hand, if you get one missing many features, efficiency is likely to reduce.
Taking the above into account, I decided to include a table which shows you the different categories of accounting software, the best software in each category and how to use them.
|Accounting software type||Description|
|Accounts Receivable||Accounts receivable software helps you perform a key part of your business: getting paid. It enables you to monitor unpaid invoices, average customer value etc. Moreover, it enables you to extend credit to creditworthy customers. Accounts receivable software also enables you to see cashflow, and see opportunities to increase it.|
|Accounts Payable||Accounts payable software has features which help in managing cashflow, integrate with vendor software and increasing the productivity of your tools and employees. Accounts payable software can be used on their own (small business) or integrate with other accounting software (SMEs).|
|ERP||ERPs are fully featured accounting and management solutions. You are able to manage all the parts of your business using one dashboard and add modules as the needs of your business changes. They are typically the most expensive type of accounting software, but can result in huge savings and an efficiency increase.|
|CRM||Customers are the lifeblood of any business. Customer relationship management software (CRM) makes it easier to retain customers, establish demographics and open up new opportunities. CRM software either come with accounting features built in or can integrate with the rest of your system.|
|General Ledger software||General Ledger software brings your accounting system software together. You can’t improve your business without easy access to all the data. Your data should also be easy to understand, and show a historical view of your cashflow. General Ledger features come with some integrated accounting software solutions.|
In conclusion, I hope that you have found this article on accounting software useful. Check out our other posts in order to run your business more efficiently and save costs.