Modern businesses have moved on from spreadsheet accounting. Accounting software is now used to process all financial transactions, including accounts receivables, accounts payable, payroll, income and expense statements, cash flow analysis, etc.
Accounting software is a vital tool for small businesses that cannot afford extra human resources to manage their accounting requirements. It helps them process data and track their profitability while streamlining their payroll, expenditures, and financial analysis.
Not all accounting software is created equal. If you are still using outdated software, you risk missing out on newer, advanced features that have emerged with the latest technology.
Benefits of Accounting Software
Accounting software has revolutionized the practice of accounting in many ways. Here are a few benefits of using software to manage your accounting;
- Faster and simple data entry processes
- Comprehensive financial reports
- Detailed and accurate financial analysis and projections
- Increased efficiency through automation
- Better accuracy of financial and accounting data
- Lower human resources costs
- Flawless access to data by all departments through centralization
- Fast approval of invoices and cash disbursements
Factors to Consider Before Choosing Accounting Software
Businesses have a multitude of accounting software to choose from today. However, a few of them are genuinely above the rest when it comes to serving the needs of small businesses.
When choosing accounting software, you need to consider the following properties of the software:
- General functionality
- Price
- Ease of use
- Reporting functionality
- Customer support
- User and data security
- Ability to scale
- Third-party app integrations
The Best 5 Accounting Software for Businesses
- Xero
With over 2 million users worldwide, Xero is top of the list of accounting software for small and growing micro-businesses. It has the functionality to support micro-businesses and those with about 100 employees. Xero is also web-based, allowing your staff to access it remotely via any connected device.
Xero delivers a multitude of robust accounting features to meet the needs of any business. There is also unlimited user support and a host of financial management features. Xero also makes it easy to connect and share data with more than 800 apps, including PayPal and the full-service payroll add-on Gusto.
Pros:
- Free unlimited users
- Built-in inventory management
- Low starting price
- Full-service payroll integration through an add-on
- Automatic importation and coding of all bank transactions
- Integration with third-party services including ADP and Vend
- On-the-go access to invoices, bank account balances, spending, cash flow, etc.
Cons:
- Charges a fee for ACH payments
- A limited reporting function for the bottom tier
Sutherland Black are Xero Gold partners with the expertise to help you get the most out of your Xero accounting software. We can help you migrate seamlessly to Xero and streamline all your business processes
- QuickBooks Online
Intuit’s QuickBooks Online is popular accounting software for small businesses and for several reasons. QuickBooks has a great dashboard, where all accounting services can be accessed to make bookkeeping more efficient and fluid.
QuickBooks excels in delivering a well-rounded, intuitive, and double-entry accounting experience.
Pros:
- Highly scalable
- Numerous online training resources and support forums
- Cloud-based and with a great mobile app
- Easy integration with third-party apps like PayPal and Stripe
- Tiered subscription to match your business size and needs
Cons:
- You must upgrade to add more users
- Syncing issues with bank and credit card
- Wave Accounting
Wave is a highly user-friendly financial management platform, even for those with no prior accounting experience. It is an excellent option for businesses that need free software that meets their accounting needs.
Wave allows you to manage your accounting and invoicing in one place through internal integrations. It also provides free unlimited invoicing, bank and credit account connections, and multi-business management at no cost.
All these features of Wave make it a highly attractive free software.
Pros:
- Free
- Unlimited users
- Unlimited invoicing with customizable templates
- Double-entry accounting functionality
- Dedicated invoicing mobile app
- Unlimited invoice tracking
Cons:
- No upgrade available for additional features
- No inventory management feature or time tracking
- FreshBooks
FreshBooks is an excellent choice for service-based businesses. It has more options for invoice customization than most accounting software. Aside from essential bookkeeping services, you can also use FreshBooks to send, receive, pay, and print invoices.
You will find it easy to request deposits, collect retainers, send proposals and invoices, and receive payments as a small business.
Pros:
- Great user interface
- Easy to use
- Advanced invoicing functionality
- Highly affordable
- Third-party app integration capability
Cons:
- No payroll services
- No inventory management
- Limited mobile app features
- Sage 50cloud
Sage 50cloud accounting software is an out-of-the-box, highly customizable, and comprehensive accounting software for small businesses. Sage has many features, including integration with Office 365 and many other features all small businesses will require, such as invoicing and payroll management.
The robust features of Sage make it an ideal choice for businesses that require more advanced features than those found on other accounting software. Its cloud and mobile accessibility make it convenient for remote use by all business employees.
Pros:
- Simple and straightforward to use
- Data can be shared with cloud-based productivity apps
- Sales optimization features
- Expense management
- Payroll service
- Tight controls which prevent mistakes
Cons:
- Stock not automatically integrated into P&L
- Unreliable remote access
Conclusion
As you assess the needs of your business, updating to a new, state-of-the-art accounting software should be at the top of your priority list.
However, as your business grows, so does its accounting complexity. Your business will require a professional accounting firm that provides fast and accurate services. We are leading Edinburgh professional accountants with a full range of accounting, tax, and business advisory services.
With dedicated and experienced professionals using cutting-edge technology, all your accounting and business advisory needs are delivered efficiently for an agreed and fixed monthly fee.