Top Accounting Software For Your Business

Can you keep track of your business finances a better way? Learn about accounting software available to make your life easier.
If you run a business, you already know it is never easy. It can seem like a juggling act. There are many details to manage, even if you are a small business owner instead of the head of a major corporation. Organizing the paperwork and financial data involved with business operations is often a daunting task. Yet, it is an essential one. You must make sure you document sales and expenditures for tax purposes, as well as to analyze trends within your business. Accounting software is available to help you do that.

Exact numbers are difficult to confirm, but 2020 data provided by U.S. Small Business Administration Office of Advocacy indicates there are approximately 31.7 million small businesses nationwide. There are also countless large businesses. Accounting processes of some sort are essential for all of them, but not every business needs identical accounting features. That is why taking the time to select the proper accounting software for your company is important.

Do You Even Need Accounting Software?

Accounting software is not required, especially if you already have an accountant. However, having accounting software can save you time and stress in several different ways. Typing information into proper accounting software allows you to keep it well organized. You can access the exact data you need when you need it. Accounting software is also useful for keeping track of inventory, avoiding the need to type or write the same data in multiple locations, and tracking the current and projected financial outlook for your company. Other reasons to consider getting accounting software include:

  • Difficulty With Mathematical Calculations

  • Disorganized Invoices or Payment Records

  • Rapid Business Growth Requiring More Record Keeping

  • Concern About Possible Costly Tax Mistakes

  • Your Accountant Requires it for Record Transfers

Types of Accounting Software

Accounting software comes in four categories. Understanding each is essential to select the type your business needs. The most basic option is spreadsheet software. Spreadsheet software is inexpensive. In fact, some spreadsheet programs are free. Spreadsheets allow you and your employees to enter data into organized columns of information you create. For example, you may create a spreadsheet with client names, addresses, and phone numbers. It might also include information about money owed by or paid by each client. While such a system keeps information organized, it is easy to mistype, create duplicate listings, or forget to type certain information at all. Thus, spreadsheet software is not a good solution if your company has many products or clients. Instead, consider one of the following software types:

  • Commercial off-the-shelf (COTS) accounting software is typically used to meet small business needs. It comes in two forms. The first requires on-site installation. You may also have to employ an expert to maintain the software on-site after it is installed. The second is online software that typically requires you to pay monthly to login and use the service. In either case, most COTS is generic and usable regardless of the type of business you run, but some is meant for use in specific industries only.

  • Enterprise resource planning software (ERP) is a special type of software often used by large corporations. It allows the integration and sharing of data between multiple departments within a single company. ERP is often an expensive option, and the installation process is frequently tedious. 

  • Custom accounting software is accounting software designed specifically for a certain company.  It is typically created as a last resort when a company head cannot find COTS or ERP software that suits the needs of the organization. Custom software often requires a lot of ongoing maintenance and troubleshooting.

Features of Different Accounting Software

There are hundreds of potential features accounting software may have. Almost any accounting software you choose probably meets basic universal accounting needs, such as invoice processing. It is the special features beyond the basics you must examine closely when choosing your accounting software. Some possible bonus features you may encounter are:

  • Tax Form Generation

  • Check Printing Capability

  • Balance Forwarding

  • Invoice Duplication

  • Ability To Print Secondary Items Relating to Invoicing (Receipts, Envelopes Etc.)

  • Electronic Funds Transfer (EFT) and Credit Card Support

  • Variance and Sales Forecast Tracking

  • Profit and Loss (P&L) Statements 

Accounting Software for Small Businesses

Owning a small business often means dealing with a tight budget. Therefore, purchasing accounting software with many bonus features is not always possible. Instead, you must pick the features most important to your business operations. The type of business you run has a direct impact on the type of software you need, as well as what you can afford. Here are some top accounting software options for small businesses:

  • Wave is free basic invoicing and accounting software for entrepreneurs. Although, payroll services require payment of up to $35 per month.

  • Xero is an accounting software services for small business owners just starting out. There are three monthly service plans ranging from $11 to $62 per month. Xero also offers a mobile app and cloud-based data storage.

  • QuickBooks has been providing top accounting software to business owners for years. Today, there are different QuickBooks packages available to meet all needs and budgets. They range in price from $12.50 to $90 per month.

  • FreshBooks is designed with service-based businesses in mind. It includes a level of customization and integration not found in many other accounting programs, including Shopify and other app integration. FreshBooks also offers custom accounting plans as an alternative to its three levels of standard service plans. Those three plans have a price range of $6 to $20 per month.

How to Make a Final Choice Between Accounting Software Types and Companies

Features and budget are not the only concerns when selecting accounting software. You must make sure the software you choose has a good reputation. Data security features and ease of use are also vital. Having top accounting software cannot help you when you cannot understand how to use all its features properly. Before making your final choice, also check to see if the company has a good reputation for customer support. That way you can get any software glitches that may arise corrected quickly. If you select a company that meets each of those standards, your accounting software is sure to make running your business far easier.