Accounting is a key part of the day-to-day life of any business.
Whilst an accountant is an invaluable resource, most businesses need software to manage and make sense of the numbers.
Fortunately, that software is now more accessible than ever before.
Partly because of the affordable monthly payment models and also the ease with which members of your team can use the software.
Whether you’re a new business starting from scratch or an established business wanting to migrate to a new platform, there are a number of factors to consider when choosing your platform of choice.
Below we’ve covered a lot of these points and also looked at some of the most popular business accounting solutions available, in order to help you decide which one is best for you.
In case you’re not completely sure what your standard accounting software does…
The main purpose is to see what money is coming into the business and what is going out. You’ll want to separate and categorise purchases as expenses and see what your profit is so you can budget effectively.
Most software also has some degree of automation, whether that’s for sending invoices and receipts or calculating how much tax you owe.
All this data is shared across the system, allowing the accounts team to have a complete handle on the money in your business.
Some of the solutions we look at below also have ways of tracking mileage as an expense and help businesses to manage payroll.
It may be that you need a lot more functionality than the simple features above.
Not only do you have a lot more staff on your books but you sell or manufacture products, requiring inventory tools and more advanced automations.
Other advanced features include creating packing slips, purchase orders and sales receipts, integrating bills of materials and other manufacturing specific features.
It may be that you need more detailed reports on balances, cash flow and profit and loss.
Vendors, suppliers, customers and employee details can all be logged and it also helps if this software is integrated with your CRM system and even the Microsoft 365 suite (good news: that’s one of the key selling points of one of the software below!)
Often these programs will have tiered payment plans which have more of these features built in and some, like Sage, are generally geared towards larger businesses anyway.
Specific features aren’t the only thing to consider of course.
In fact, with such a competitive market, the difference in offering between each of these programs isn’t huge. In some cases, it will come down to personal preference.
The main thing that will determine what you go for is what kind of business you have. Is there just one or two of you or are you a team of 40?
How remote is your business? Does everything happen at your office premises or are your employees scattered all over the place?
If so, it may be the difference between something that has a local/hybrid approach and something which is entirely based in the cloud.
You may also require integration with certain software that you already use.
So, what are the popular options that people go for?
There are of course a lot of providers on the market. Some have been around for a long time and some are quite new players.
The ones we’re going to give a brief overview of today are Sage, Xero and QuickBooks.
Popular with SME’s and medium sized businesses, Sage is used around the globe and is popular for its wide range of uses and the ability for multiple users to access it.
It’s an excellent local/cloud hybrid meaning the software and data can be stored at your premises at the same time as on the cloud.
As we hinted at above one of the great things about Sage is the fact that it easily integrates with Microsoft 365 meaning you can connect it with programs such as Excel and Outlook.
Like many of the other programs on the market it allows you to manage payroll, send invoices and receive payments and also has companion apps, allowing you to control things on the go.
A big draw is the huge slate of add-ons that are available, depending on your industry or the size of company. You may want human resource management or extra functionality for manufacturing companies.
On the other hand, this level of complexity may be a drawback for other businesses.
These added features increase the cost and the time and dedication required to get the most out of it. Both of which may be too much for smaller businesses.
Xero is a popular alternative for many businesses and does a lot of the same things as Sage.
It allows you to collaborate with staff and accountants and has a wide range of integrated features. Not only this but the reconciliation with your bank is fast and streamlined. It will easily integrate not only with your chosen financial institution but also with third-party apps such as HubSpot and other CRMs.
One of its defining features is the smooth interface. Different aspects of the program can be accessed through tabs along the top and each feature has a no-nonsense interface with clear buttons.
It won’t be for everyone but some will like the economical, pared down approach to each of the major functions.
Some cons are that the mobile access is not the most comprehensive around. Regardless, it’s probably satisfactory for small tasks and brief overviews.
The inventory and expense tracking and reports are also not as good as competitors such as Sage.
The other main software option we’re going to look at is Intuit QuickBooks.
Like the other options here, they have a variety of tiered payment plans to suit different sized companies. Their Self-Employed iteration is a more paired down option, that has everything you need if you’re a small self-employed service provider.
For the small to medium sized businesses however it does a lot of the things you need. It’s not as feature heavy as some of the other options but does integrate with other apps and programs.
Sales tax calculations, returns, tracking expenses, customised reports and more are all things you can tackle on QuickBooks. It also has an easy to use and attractive user interface.
One of the standout features is the ability to track mileage using your phone’s GPS, so employees can accurately track their expenses by having the app on their phone.
When it comes to other expenses however the auto categorisation could be better. The mobile app is also only going to get you so far and doesn’t have the comprehensive features you get on desktop.
Another drawback might be that even though it’s ideal for small businesses, when you start needing more than the basic features it can become pricier.
If none of these take your fancy, it’s worth checking out what other software providers, FreeAgent, Zoho Books and Fresh Books, have to offer. There are of course even more options than that when it comes to accounting software but these three are fairly popular.
As we mentioned above, a lot of the time it comes down to your personal preference but ease of use and how many extra features your business needs will also factor in your decision.
We’re big Sage fans, but we’re not just saying that. We genuinely think it’s the best option for businesses of a certain size.
If you want to know more about how it can work for your business, get in touch with us today.