In Pursuit of Profit
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So, in that regard, there is not one single best software out there that every small business should use. However, there likely is the best bookkeeping/accounting software for you to use.
To determine which software is going to be the best fit, let’s take a look at some of today’s most widely used accounting platforms.
Remember, as you read through this guide to small business accounting software, it is important to think not only about your company’s current needs but its projected future needs as well. The best software will not only meet where your business where it is right now but will also grow with your business.
FreshBooks is an extremely easy to use accounting software for microbusinesses, freelancers, and consultants. Its intuitive platform makes FreshBooks a favorite with even less financially savvy individuals, though its customization options are somewhat limited. While startups like the simplicity that FreshBooks offers right out of the gate, growing companies will likely need to migrate to a more robust platform pretty quickly as their invoicing needs expand.
With their customer-based pricing structure, users pay a monthly fee based on the number of customers they are invoicing, not the number of invoices they are sending. As a result, FreshBooks is well-suited for project-type work, retainer-based work, and subscription services. At the lowest plan level, FreshBooks starts at $4.50/month (for the first three months), with an option to save by purchasing on an annual basis. The highest plan level allows for many of the accounting functions that other platforms offer standard like bill payment and automated client emailing. Like Xero, FreshBooks also offers a Gusto add-on feature to manage payroll.
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Sage Business Cloud Accounting is another great choice for microbusinesses. Sage offers far more functionality than FreshBooks like a robust mobile app, multicurrency support, and a whole host of third-party app integrations. Additionally, Sage is well positioned to support businesses selling goods rather than just services due to their inventory tracking features and robust bill payment functionality. Real-time financial reporting accompanies advanced A/P (accounts payable) and A/R (accounts receivable) functions, making invoicing and cash flow management a breeze.
Their entry-level accounting software plan called “Sage Accounting Start” is $10/month, while their more advanced plan with unlimited user functionality called “Sage Accounting” is $7.50/month for the first six months and then $25/month thereafter.
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Xero is a top-rated accounting software that seems to punch above its weight class – offering lots of advanced features like expense reimbursement tracking, project management, file storage, contract management, and more with a starting price of $13/month for early-stage businesses. Their features-based pricing structure limits the bells and whistles provided for startup businesses to offer a discounted rate and then adds in more sophisticated functionality for growing and established businesses like detailed financial analytics and multiple currency conversions. However, all plan levels allow customized invoicing and the ability to accept payments directly from the generated invoices. Additionally, Xero users have the option to add payroll through Gusto for an additional fee that is quite affordable for companies with a small number of employees.
Unlike some small business accounting platforms that are meant only for microbusinesses or startups, Xero can support businesses through numerous growth stages, offering small, medium, and large businesses alike the kinds of accounting functionality that they need to manage their daily operations.
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QuickBooks (QB) as a brand remains synonymous with accounting software, landing it what appears to be a permanent spot in any list of accounting software options for any size business. QB Online is a popular cloud accounting choice these days because it offers a wide variety of features for small businesses and freelancers alike. Businesses using QB Payments for their credit card processing will find that QB Online provides best-in-class bookkeeping functionality.
Most notably, QB Online provides extensive integrations with other business apps and software platforms, offering a fairly seamless experience across numerous business applications. Former users of QuickBooks Desktop will likely find QB Online fast to learn because of its similar usability, making it an easy choice for companies that are on a legacy QuickBooks platform or that have experience with these types of platforms.
Pricing transparency enables users to understand exactly how much they will be paying for the features they need. With tiered user-based pricing, QB Online starts at just $15/month for freelancers (for the first three months) and increases as more users are added, advanced options are utilized, and provided support increases.
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Wave Accounting is becoming more popular among small businesses due to its ease of use and robust functionality. With bank and credit account tie-ins, Wave provides business owners with an easy way to reconcile accounts and better manage cash flow. Wave also allows users to generate a whole slew of professional financial reports (balance sheet, cash flow statement, P&L, etc.) that are sure to impress investors, partners, and other key stakeholders.
The easy to read dashboard provides a quick business snapshot that is something both the financially savvy and the less financially savvy alike appreciate for day-to-day business operations as well as future strategic planning initiatives. As a result, Wave is popular among not only small businesses but also accountants and tax preparers.
One of the best parts about Wave is that it is a totally free accounting software for small businesses! Invoicing, accounting, and banking functions are all free for Wave users. The only fees you will pay are for add-on services like payroll processing and financial advising.
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Kashoo is a top-rated accounting software for startups and fast-growing businesses. Like Wave, Kashoo provides cloud-based invoicing, expense management, transaction tracking, and financial reporting across desktop and iOS mobile devices (Android is not included). However, many of the advanced features found on higher price point plans from competitors are not available in any version of Kashoo, including time tracking, inventory management, and workflow management.
Kashoo also offers payroll processing as well as various payment automations with some of the most common payment providers to make managing a small business easy. Additionally, Kashoo uses its suite of offerings branded as “trulysmall.invoices” and “trylusmall.accounting” to provide full encryption, making it more secure than some of its counterparts.
At $30/month Kashoo is more expensive than its counterparts, but they also offer a more limited version for $20/month that provides the basics of double-entry accounting for invoicing, payment management, and expense tracking at a discounted rate.
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NetSuite by Oracle delivers everything you would imagine that a big company like Oracle would provide – ERP (enterprise resource planning), payroll, HR, CRM (customer relationship management), ecommerce, and accounting in a series of customizable modules. Oracle’s approach is to offer business owners everything they need from one provider. As a result, NetSuite is a great choice for thriving businesses that are looking for the option to add advanced functionality as they grow. NetSuite offers rich reporting, extensive customization, and unsurpassed financial visibility making them the leader in:
Unfortunately, a lack of pricing transparency means that you will need to talk to a sales representative to determine how much you will pay for NetSuite depending on your company’s needs. The implementation tends to have a very high upfront cost, and will almost certainly need to be managed by an in-house accountant or experienced third-party accounting service. However, the long-term benefit of not needing to switch platforms down the road can justify the extensive implementation needs.
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If you need help determining which small business accounting software is going to be best for your company, reach out to us today. Our experienced consulting accountants can examine your bookkeeping needs and recommend the right software. We will analyze what your business needs now and take a look at where it is projected to go to make the best recommendation for both your current and future needs. Whether you are starting a new business or adapting to fit the evolving needs of a growing business, our team has access with a wide variety of accounting software options to help advise on what will best suit your company. And once the right platform has been identified, we can help with implementation or migration from another accounting software to keep your operations running smoothly. Contact us today to learn more!