There’s no arguing that accounting is a critical – but often confusing – part of any business, no matter how big or small. Thankfully, gone are the times of being spread(sheet) thin and having to handle the books manually. Accounting software has been a game-changer for small business owners especially, making it easier to manage inventory, employees and customers, while running a financially healthy business.
With countless accounting software options to choose from, finding the best fit for your small business can feel overwhelming. To help you navigate this decision, we’ve laid out tips for choosing an accounting software and highlighted pros and cons of some of the most popular software out in the market today.
How to Choose an Accounting Software
- Consider the cloud: Many options store data in “the cloud” rather than on a server or hard drive, allowing you to access your account when connected to your small business Internet or remotely, anytime and anywhere you have a connection.
- Focus on usability: A software with a cheap price or fancy bells and whistles is only beneficial to your business if you know how to use it. The interface should be intuitive and easy to use, and access to a support team is critical should you ever need assistance.
- Balance cost and features: Don’t get roped into overpaying for features you know you will never use. Determine the must-have features for your small business, then focus on finding a plan that fits your accounting needs AND your budget.
- Check out the add-ons: Bonus features often make your life easier where you least expect it. For example, integrations with other software can save valuable time and are well worth an additional cost.
- Ask for advice: Sometimes the best choices are made based on the experience of others. It can’t hurt to ask an accountant or financial advisor for advice or consult other small business owners in your network for recommendations.
Now that you know what to look for, here are pros and cons of some of the top accounting software options for small business owners.
QuickBooks
Pros:
- Top-notch user interface
- Expansive additions and integrations with third-party applications
- Scalable software and plans
- Commonly used by accounting professionals
- Cloud-based software
- Sophisticated mobile app
Cons:
- Highest price of accounting software examined
- Upgrades required for more users
- Online documentation is lacking
- Occasional synching problems with banks and credit cards
Summary: QuickBooks may very well be the best and most comprehensive accounting software overall, but it comes at a price. For more information and pricing details, go here.
Xero
Pros:
- Very reasonable price point
- Exceptional online support
- Simple inventory management, updated inventory and expense tracking
- Thorough record and transaction forms
- Customizable reports, online quotes and smart lists
- Third-party app marketplace
- Cloud-based software
Cons:
- Payroll is not currently available for all states
- Limited reporting available
- Fees charged for Automated Clearing House (ACH) payments
- No phone or chat support
- Basic mobile app with lackluster options
Summary: Xero is a great, affordable option for smaller businesses that focuses primarily on payroll inventory tracking and mission critical business functions. Learn more about their plans and features.
Freshbooks
Pros:
- User-friendly dashboard and easy-to-navigate interface
- Supports third-party app integration
- Relatively inexpensive for a cloud-based software
- Advanced invoicing features
- Has gone through several major updates recently to provide upgraded software features to customers
Cons:
- No inventory management or payroll service
- Mobile app has limitations and doesn’t allow you to access reports on the go
- Poor inventory tracking and management compared to other software
- Lack of extra features that competitors offer
Summary: For small business owners of service-based companies looking for a reasonably priced option, Freshbooks may be the best software for you. Click here for more details and pricing info.
Wave
Pros:
- Free software for accounting, invoicing, and receipt scanning
- Ability to run multiple business in one account
- Unlimited number of users with varying user permissions
- Unlimited income and expense tracking, transactions and billing
- Unlimited invoicing with customizable templates and payment terms
- Double-entry accounting
- User-friendly desktop and mobile app and dedicated invoicing mobile app
Cons:
- Limited third-party app integrations
- Higher fees for credit cards and ACH payments
- Full-service payroll is limited to only 14 states
- No inventory management
- Poor scalability – doesn’t provide more advanced accounting plans outside of free software to increase functionality
- No support – live chat support is only available for other paid services
Summary: If you believe the best things in business come free, this choice could be a no-brainer. Visit Wave’s website to learn more about their features and decide for yourself.
We’ve outlined important considerations when choosing an accounting software that best fits the needs of your small business. If you’re still feeling unsure, many companies offer free trials online, so you can test-drive multiple software options before committing to a final decision.
