In the initial stages of your business expansion, accounting software is one of the first investments you need to look into. It is crucial to choose the best software solution that suits your business requirements. Because; it tracks the cash flow of your entire organization. Accounting software for small businesses is a robust tool to manage finances efficiently.
It minimizes the mistakes and makes your process more efficient than traditional methods. It enables your business with automation to save you time and a platform to store important documents and receipts for future reference.
In this article, we will dive deep into what is accounting software? And how to choose business accounting software?
- 1 What is Accounting Software?
- 2 5 Steps to choose an accounting software:
- 3 Top 10 Accounting Software For Small Business in the market to use in 2021:
- 4 Conclusion:
What is Accounting Software?
Accounting software is a set of algorithms that help bookkeepers and accountants record and report financial transactions of your organization.
The features will differ from product to product or vendor to vendor. Large scale business will require a personalized solution that integrates and processes a large amount of data from all the departments.
Small and medium-sized business owners (SMEs) can opt for off-the-shelf products.
Bookkeeping software is a powerful tool for today’s businesses. It allows you to track all financial transactions, detailed reports, and analysis. Small business accounting software will generate invoices, track cash flow, spot and follow up with pending payments.
Earlier businesses had to track these transactions and reports by hand using a book or a journal.
Additionally, detailed reports were not possible due to the labor involved to consolidate the reports.
Business management software allows you to automate tedious tasks and reduce the cost of accounting. It is a perfect tool that enables businesses to make better financial decisions because of timely reporting.
Accounting software allows you to store a large amount of data without consuming your physical space.
How to Choose Business Accounting Software?
Now that you know what is accounting software? It is crucial to choose the best software solution that will help to accomplish your business goals. You need to consider; the following when you choose business accounting software:
On-premises or cloud:
When you decide to invest in accounting software, the first question you need to ask is whether you need online software or you require an on-premises solution.
Many business owners; today choose a cloud-based option because of the flexibility and other advantages it offers compared to a traditional system.
Few businesses that deal with sensitive information like defense or government will require on-premises solutions.
Benefits of cloud-based software:
- Cloud-based accounting software is just like a plug and plays wherein you do not have to install; just need to log in and enter your transactions.
- The vendor is responsible for upgrades; that is why your team is working on an up to date software.
- Flexible to access the system on a compatible device with the internet.
- Vendors are responsible for backing up and maintenance of software that helps to be cost-effective.
- All your offices and outlets will be well connected.
- Easy to integrate with other cloud-based software.
On-premises or offline software:
- It does not always require the internet to perform tasks.
- You are in control of managing and maintaining the servers that make it more secure.
The best accounting software for small business is cloud-based as you do not have to invest a lot initially and offers various features.
Security of data:
The accounting team deals with the finances of your organization; which is why data security should be your concern. When you decide to opt for online accounting software, then you need to pay detailed attention to this.
When you search for vendors, ask them on which servers they store the data. Amazon and Rackspace are a few of the most trusted cloud hosting service providers. If the vendor stores your data on a local server, then it is crucial to know about the security measures in place to safeguard your data.
You can also check whether their services use an HTTPS connection. HTTPS ensures encryption of data while transferring data from your computer to the vendor’s servers.
It is essential to understand your needs and make a list of features; that you need in your accounting software. Following features should be there in your software for efficient functioning:
- Invoice generator and personalized features.
- Track expenditures according to department or categories.
- Inventory management, stock flow, and wastage.
- Verify online transactions.
- Generate purchase orders and track inventory purchases.
- Calculate and manage taxes.
- Handle customers and vendor lists.
- Manage accounts payable and receivable.
- Calculate and maintain balance sheets and profit and loss statements.
- Add and remove team members.
Additional features you might choose in your accounting software according to your business requirements:
- Handle multiple currency transactions.
- Process payroll.
- Classify transactions as per projects.
- Grant and restrict access to team members as per their job role.
It is not necessary that all your team will be tech-savvy or the owner has an accounting background. An easy to use interface helps your team to adapt the small business software quickly. It ensures that the business leaders; who do not have an accounting background, access the reports and reduce the training investment and time. Easy to use interface simplifies the task for your team.
When you choose accounting software, you need to ensure that it is scalable.
In the initial stage of your business, you might not require all the features; but as your business will grow, you will need to add on more features.
But at that time, you should not realize that your option is not scalable; you have to migrate the data to new software. It is a challenge to migrate the data, which is the reason why it is essential to choose scalable accounting software for small businesses.
For instance, you opt for a solution, and with time you realize that the software has bugs or has hidden costs. You would not like to be with such accounting software. So it is crucial to know the options of data export before you choose a solution.
The software should allow you to extract the data in an excel sheet because other software will accept excel files to import your data. Additionally, it is always best to back up your data at regular intervals; to avoid any loss.
Finance is a fundamental part of any organization, and you need to spend it very wisely. Some accounting software vendors will not tell you about the additional charges for support and upgrade if they have any. That is why it is essential to know if there are any additional or hidden charges in the name of add ons and maintenance fees.
We suggest you look for an option; within your budget and provides; all the features you need. The best way to ensure there are no hidden costs is to check their website. It will be mentioned out there regarding add ons and upgrades.
The relationship between you and the accounting software vendor does not finish after implementation. Irrespective of how easy, cost-friendly, or scalable an option you choose, you will require after-sales at some point. At that point, you should not realize the support is not knowledgeable and friendly; all your investment will go in vain.
You might doubt how we check the post-sales beforehand. Here is a simple tip for you need to leave a message or contact the support center.
Depending on their response and resolution time, you will understand the potency of their after-sales.
5 Steps to choose an accounting software:
- Understand your needs.
Talk to your team who will use the system and check all areas they need help. Once you understand your needs start looking for a suitable option.
- Know your budget.
Understand how much you can spend on accounting software. It will help to filter the vendors.
- Explore and analyze.
Visit a tech recommendation platform where you can explore and analyze your options.
- Schedule a demo.
Ask your vendor to provide a demo and clear all your doubts during the session.
- Take a trial.
Almost all the vendors provide free accounting software for a limited period to get your hands on it.
Top 10 Accounting Software For Small Business in the market to use in 2021:
There are multiple accounting software vendors in the market, but you need to choose the best one.
Our team did scrutinize and analyze the software vendors based on their interface, after-sales support, cost, and other vital parameters.
We have compiled a list of the best ten accounting software in 2021; based on all the features we mentioned above and the user reviews about their system.
Tally.ERP is an all inclusive accounting system that supports your banking transaction, manage inventory, comply with taxes and many other features
You can generate invoices, enter counter sale, manage the rate, get detailed reports of margin and losses with Marg accounting software.
You can deploy Zoho books on portable devices, track sales and purchase orders, file taxes, and generate invoices through a single platform.
Quickbooks helps your business to manage the cash flows, track time, grant and restrict access to multiple people based on their role, online banking and has a good after sales.
Sage 300cloud is a robust tool that lets you manage your customers and employees, ship orders on time, manage your inventory, accounting, and finances, and gives you intelligent business reporting.
The bookkeeper is a complete accounting solution for your business that easily generates invoices, calculate taxes, integrates with e-commerce, calculates payroll, and keeps your data secure.
zipbooks is a modern bookkeeping software with all the features you need. Additionally, it offers an automated feature to engage customers.
Focus I Advanced Accounting Software
Focus I advanced accounting software is a feature-packed solution that provides error-free billing, invoice with taxes, marketing integration, manages your resources and documents.
You can grow your revenue with profit books because it provides powerful invoicing, manage your inventory and finances.
Busy Accounting Software
Busy accounting software increases your business efficiency by managing your finances, inventory and operations.
Accounting software is an all-inclusive tool to simplify your finance process. It is a challenge to find the most appropriate software solution for you.
Because there are many small businesses software; that is available in the market. We recommend you explore, analyze and choose the best software; that will truly simplify the task for you.