Choosing the right accounting software is crucial when it comes to running a successful business. You need to know what money is where whilst also tracking money due and cash flow. However, doing so effectively can be tricky.
One of the benefits of living in the digital age is that there are new technologies that can help us optimize our workflow and enhance our productivity. Tasks that once would’ve have taken us a day to complete can now be done automatically thanks to the development of new software and online tools.
When it comes to accounting, there are many different software packages out there. The best software packages are those that are easy to use, affordable and have a system in place that allows you to get help if you’re experiencing a problem. Let’s take a look at the top four accounting software packages and see how they compare.
FreshBooks is cloud-based accounting software that is great for small businesses, entrepreneurs who are starting out and freelancers. It is designed so you can create and customize invoices to send out to your clients or customers, organize expenses, track the time of yourself and your team as you work and keep your team in sync with the project schedule. With over five million users worldwide, there are plenty of people out there ready to recommend this software.
The online software uses a dashboard which allows you to keep track of your tasks, manage invoices and collect payments. What sets FreshBooks apart from other software is how you can customize the system. You have the flexibility to create invoices that reflect your brand by changing fonts, colors and templates. You can also use FreshBooks to send out overdue payment reminders, add late fees, set up direct payment gateways for your customers and automate billing processes. Essentially, when it comes to the accounting side of your small business, there is nothing you can’t do through FreshBooks.
The software also offers a mobile app, so you can constantly stay up-to-date with payments even when out of the office. However, FreshBooks has been recently updated and the newer version is now missing some of the features the classic version offered.
Pricing: A 30-day trial of the software is available for free. After this, there are different plans available depending on your budget. The Lite monthly plan starts from $15, but if you have more than fifty clients, you can upgrade to the Plus or Premium plan, which costs $25 to $50 a month respectively.
QuickBooks Online is a well-established online accounting application that is suited to many different types of businesses. Regardless of size, QuickBooks Online offers plans that can serve a wide variety of businesses, from small to big enterprises. There are different add-on solutions that you can purchase as your business grows, making QuickBooks Online a great product for everyone and anyone looking to optimize the way their business runs.
As with FreshBooks, you can use QuickBooks, and its dashboard, for invoicing and paying bills. However, you can also use it to create budgets, track inventories, pay employees, accept credit card payments and view your GST and tax status.
When you open the software, you can immediately see key data such as the business’ income, expenses, profits and losses. This gives you a great snapshot of how your business is doing and what needs to be paid and collected in the next month.
Pricing: Pricing for the software depends on your business size. QuickBooks Self-Employed starts from as little as $10 a month but if you are mid-sized business you are probably better off with QuickBooks Plus, which costs $60 a month.
Xero can be a good accounting software alternative to QuickBooks Online for small businesses, specifically those teams with five or less members. Xero offers many of the same tools and functionalities as QuickBooks Online but without additional costs. However, unlike QuickBooks Online, Xero does not have live support available should you encounter a problem.
Using Xero, business owners can access their financial data from any device and track wages, manage revenue, oversee expenditures and analyze cash flow. The software also has connections with over 5000 different banks and financial institutions, making online transactions easier to enable. Another feature is that the software shows real-time currency exchange and can be used with multiple languages and currencies. This is particularly useful for those businesses that operate overseas or in multiple countries. Through Xero, you can also submit payroll tax payments and file different tax forms.
Pricing: Xero offers a 30-day free trial and then Xero Standard starts from $30 a month. This version offers unlimited billing and invoicing capabilities as well as payroll for up to five people. To enjoy the multiple currencies feature, you will need Xero Premium at $70 a month.
If you are starting out as a business owner, or if you are strapped for cash when it comes to paying for an accounting software service, then Wave may be the best option for you. Wave is a free accounting software package that only charges you once you start using premium services. For those starting out, it is understandable and easy to set up. If you’re trying to figure out what accounting software will work best for your business, this a great option.
It can be used for billing, invoicing and payroll but does not have an inventory management system in place. While Wave doesn’t offer as many features as its competitors, it may be the best option for sole proprietors and freelancers with little accounting experience.
Author: Laura Martins is a content manager for RateCity, a free resource you can use to make smarter financial decisions and compare thousands of financial options.