Accounting software helps small business owners to track their accounts receivable and payable. Entrepreneurs and their accountant can understand their profitability and prepare their taxes with such tools.
Small businesses can simply use out-of-the-box software without extensive customizations. However, they need a customized enterprise resource planning (ERP) system when their accounting needs change, such as when they become complex.
Accounting software varies in terms of capabilities and price tags. Small businesses should consider factors such as their industry type and the number of employees when choosing accounting software.
The following are the top handpicked accounting software for small businesses.
Why You Should Automate Your Accounting Activities
Businesses that run their accounts payable manually spend their evenings and weekends handling such tasks. The activity can even interfere with your core business because you can’t rush these activities because mistakes can be too costly. In fact, it can cause companies to deal with late payment fees, miss out on early-payment discounts, hurt their credit rating, and ruin their reputation.
The only solution is the automation of accounting needs using online tools. These tools are used to process invoices received via an online portal or email.
Automation allows users to do the following tasks.
- Scan and upload electronic invoices into the system
- Alerts the software when the invoice is due
- Users can approve invoices payments within the software
- They can track project time and payments.
Benefits of Automating Accounts Tasks
Some small businesses accounting needs are payroll, inventory management, and invoice processing. Mistakes are inevitable with manual data entry and can lead to underpayment or overpayment. This can cause a loss of money and damage your company’s reputation.
Software, on the other hand, automates data entry. In fact, the tools are able to read pictures of the invoices and identify the amount and due dates.
Eliminating repetitive, manual, or paperwork saves time which you can use for your core business. Automating repetitive tasks reduce error-prone spreadsheet tasks. It also eliminates low-value tasks such as copying, faxing, filing, and storing physical documents. A team that uses its accounting tools correctly will have nothing to reconcile because all the data is checked and copied in the system. You can then deploy the extra resources to the support team or other departments.
Automation saves time and allows accountants to focus on what they’re trained or hired to do. Focusing their efforts on complex transactions, new business models, estimates, and other higher-risk areas increases productivity.
Automating accounts is an excellent opportunity for talent development, leading to improved retention and eliminating costly turnover.
Users use spreadsheets in manual accounting activities. These methods lack preventive controls, have minimal security, are exposed to increased cyber-attack risks, and are prone to errors.
Automation eliminates the use of spreadsheets because invoices are created and sent online. Similarly, payments are received and made through digital methods integrated with the accounting software.
Accounting software unifies data which allows users to explore trends or gather insights on a real-time basis. Automating accounting activities saves time for quality insight and analysis that support data-driven decisions.
Your accounting staff can create dashboards and reports that can be easily adjusted to new business changes, revenue streams, and cost centers.
Best Accounting Software
1. Accounting Seed
The highly-customizable software solution helps you handle all your business’ accounting-related aspects. The tool is easy to use, highly flexible, and offers a collaborative environment to help you make strategic business decisions.
Further, the Salesforce-powdered platform allows reliable connections and open customization due to its open architecture. The streamlined database offers best-in-class collaboration, security, and automation.
Invoicing is one of the most crucial accounting needs that most service-based businesses encounter. Compared to other software in the market, FreshBooks provides its users with additional customizations for invoicing.
Some of the tool’s primary functions include sending, receiving, paying, and printing invoices, as well as handling basic bookkeeping needs that a business might have. Therefore service-based companies can easily send invoices, proposals, receive payments, track project time, collect client retainers, and request deposits.
Although the cloud-based software permits third-party integration and has advanced invoicing features, it does have payroll service and inventory management. Further, its mobile app has certain limitations.
The company offers website creation, web hosting, and accounting software. Users without prior accounting knowledge can organize and automate their accounting and bookkeeping using this tool. So they can create and send invoices, view business reports and accept online payments.
Further, the accounting software is designed for eCommerce and freelancing businesses. As a result, the system can be integrated with PayPal, eBay, Etsy, Amazon, and more.
On the other hand, GoDaddy is not the perfect tool for small businesses seeking comprehensive accounting solutions such as automation, payroll, and tax forms.
4. Intuit QuickBooks
Most accounting professionals working in small businesses use QuickBooks for their accounting needs. It offers its users endless online training resources and features, thus making the tool extremely efficient and fluid.
You can integrate this cloud-based tool with third-party applications. It has a mobile application and is scalable, thus a perfect tool for small businesses as well as their tax and bookkeeping professionals.
However, users experience occasional syncing issues with credit cards and banks. Further, an upgrade is needed when adding new users.
5. Invoice Meister
The accounting software is suitable for SMEs and helps these businesses create invoices, manage their revenue and expenses, and organize their business. Users can generate detailed analytical reports that offer actionable insights for agile decision-making.
The tool offers an array of invoice templates that are easily customizable according to your needs. In fact, you generate invoices with your signature, logo and send them using your personalized email.
The cloud accounting systems offer business and accounting services. Sage allows users to choose their needs, company size, and industry and then matches them with specific accounting solutions.
You don’t require accounting knowledge to use Sage and can be used by multiple users. Additionally, the accountant can access the books and use this cloud-based system at no extra fee. Therefore, users can create and send invoices, receive and make payments, manage payroll and forest cash flow.
7. Wave Accounting
The accounting software platform is the perfect choice for service-based small businesses and freelancers that prepare and send simple invoices and don’t run payroll or track inventory.
Its features are enough to meet their accounting needs and generate necessary reports at the end of the year so that tax return is prepared. Additionally, Wave accounting software can run multiple businesses using one account, has no billing and transaction limits, and has unlimited users.
On the other hand, this accounting software has limited third-party app integrations and no inventory management. It also charges higher fees for ACH payments and credit cards.
Microbusinesses prefer Xero because it’s simple accounting software with a clean interface and is easily integratable with third-party payroll services. In fact, a company can collect its payment online when they integrate the software with GoCardless and Stripe.
The mobile-based software has a mobile app and offers simple inventory management. Xero users can integrate the payroll with Gusto and more than 800 apps like Square and HubSpot.
This accounting software is simple but powerful and can take your business to the next level. It’s a web-based software that streamlines all your accounting tasks. You can use it to create ledgers, income statements, and more.
Additionally, you can set recurring billing to help you get paid on time. Still, your team members can access real-time data and gather actionable reports hence an effective tool for collaboration.
10. Zoho Books
This is online accounting software that helps users prepare and send invoices. The tool has several products, including inventory control, accounting software, customer relationship management (CRM), and human resource management (HRM) software.
The accounting software offers robust features, and you can integrate it with over 40 apps. You don’t need prior accounting knowledge to use Zoho Books because it’s easy to set. However, the tool doesn’t offer payroll solutions, and so you have to choose another accounting software to manage your payroll.
Every business has different accounting needs. Similarly, accounting software offers various features to help you automate your accounting activities. The featured accounting tools will help create and send invoices and generate reports that enable you to make data-driven decisions. They also automate repetitive tasks and eliminate the use of error-prone spreadsheets.
Although some of the tools mentioned above don’t support payroll and inventory management, you can integrate them with other software to help you perform those tasks.
SMEs using these tools have started to realize the high potential features that these accounting tools offer to their businesses. Additionally, you can compare and leverage the features of the 10 best accounting software for 2022 and beyond.
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