Which Accounting Software Should My Company Use?

New business owners invariably ask the question.

The problem is – it’s the wrong question.

If you want someone to write the copy for a press release, you wouldn’t care if it was written as a GOOGLE DOC or a MICROSOFT WORD DOC. You just want to make sure that is well-written.

These days it is pretty much a given that you’ll want a cloud-based accounting package so that everyone that needs to, can collaborate from wherever they happen to be.

An experienced bookkeeper will probably prefer a package that they are familiar with.

If you don’t have an accounting package, find a good bookkeeper and let the bookkeeper choose the software. However for a small business these days, it should be one of these cloud-based packages:

  1. Xero
  2. Quickbooks Online
  3. Wave
  4. Sage One

Bookkeeping isn’t rocket science and most people could do it if forced to learn. However, not everyone has both the temperament – and the time – to do it accurately and on time, while juggling a myriad of other responsibilities.

So entrust the bookkeeping to someone with the experience and the temperament to do it well.

In other words:

Choose the bookkeeper not the accounting software.

On the other hand, a good bookkeeper can adapt to the software that you’re already using. If you’ve been using a particular package for a number of years, a new bookkeeper should be able to figure it out within a few hours or days. If they want you to change from an existing package, there would need to be a pretty good reason.

Do You Need to Use Accounting Software?

The truth is, if you only look at your financial statements when you file your taxes, the money spent on monthly bookkeeping may be wasted to some extent. Keep in mind that bookkeepers do more than just record transactions. They also help discipline you to keep good records.

For some small companies it would be possible to “do the books” at the end of the year. As long as you’ve kept the records you need.

Of course it goes without saying that you can’t get away from doing payroll (if you have employees) and taking care of billings and collections on at least a monthly basis.

Using a payroll service and something like STRIPE or PAYPAL for invoicing, can work for some very small companies.

STARTUP SAVANT

The Startup Savant has compiled a useful list of cloud-based accounting systems. I agree with them that Xero is one of the best packages around. They have listed all of the best online packages, however their analysis leaves a little to be desired:

PROS AND CONS TO USING AN ACCOUNTING SOFTWARE

Pros:

  • With accounting software, the chance of human error is less likely. All accounting software tools are extremely accurate (provided you enter the right information). – if you aren’t skilled, entering the wrong information is almost a certainty!
  • By using business accounting software, you’ll be able to save countless hours over the lifetime of your business. Your financial reports are totally automated. – financial controllers often spend days doing a month-end close / that just isn’t true
  • If your business needs to invoice customers, you can customize and send them out with your accounting software. This’ll help you get paid faster! – true but you can use PayPal or Stripe without accounting software
  • No more calculating on your own because most accounting software automatically calculates your financials for you. – NOT TRUE see answer to 2 above
  • With the built-in expense tracking, accounting software is extremely useful for keeping an eye on where your money’s going.- many entrepreneurs only look at the financials when filing their taxes – they somehow find other more useful key performance indicators (“KPIs”) to manage their businesses…in between year ends

Cons:

  • Since many of the accounting software tools are web-based, an internet connection is required. Even the ones that aren’t cloud-based need web access from time to time for syncing purposes.- Who doesn’t have access to the internet?
  • Accounting software most likely won’t be the ‘end-all’ for keeping finances in check. It’s likely that you’ll still need an accountant depending on the nature of your business. – tax compliance is way too complex for the untrained

WHICH IS THE BEST ACCOUNTING SOFTWARE?

is the top accounting software for your business. If you want to get a more complete picture of the tools that interest you, read our full reviews or sign up for free trials to the ones that interest you. – Really? Who wants to set up a series of different packages and then take each for a test drive?

In general, we do prefer Xero due to their frequently updated software and 24/7 support. They’re one of the best accounting software tools available for entrepreneurs in most fields. It’s flexible, powerful and affordable.- Generally a good choice!

Let’s Start WORK
TOGETHER!