There are more than two dozen accounting software in the market which may be able to fulfill most of your daily bookkeeping and accounting tasks/requirements. So how would a small business owner be able to evaluate whether an accounting software is suitable for his/her company?
You may compare the different accounting software based on cost, how friendly they are to users, or the capability to invoice customers, pay bills, pay employees, accept online payments (such as through PayPal or Stripe) from customers, connect with bank and credit card accounts, and compile financial reports.
The cost of the software should be relatively low and be affordable for most small businesses owners.
The accounting software should be online or cloud-based.
The setup of the software must be easy enough. You only require very minimal knowledge on bookkeeping and should have no problem setting up the software on any computer or mobile phone.
The software must let you easily manage accounts receivable and accounts payable.
The software must be capable of quickly creating invoices and tracking payments.
The software must let you quickly enter and pay bill payments.
Must be able to download transactions from your bank (by having your bank and credit cards connected to the software).
Must accept online payments after automatically sending invoice reminders to customers with overdue invoices.
Must be able to generate/compile financial reports including profit and loss, balance sheet, and statement of cash flow reports.
Must be able to process payroll for all your employees.
To move forward, you may start using one of the accounting software mentioned below.
QuickBooks: Usually it is the most widely-used accounting software for small businesses.
Xero Accounting Software: Usually it is the default alternative to QuickBooks Online. This software lets you scale up as your business grows.
FreshBooks: It allows most freelancers to streamline their customer invoicing and payment collection.
One common question that people asked is the reason for using an accounting/bookkeeping software that is online or cloud-based.
In the old years when people first bought their bookkeeping software, they are based on and installed on a single desktop computer. And people had to use the software on a single computer. Time has changed. Nowadays, this type of software are installed on the cloud, and you would simply use your computer web browser to access it. For example such as Xero, you can download and install the Xero app on to your mobile phone. On the go, you will be able to access to the bookkeeping data and financial reports on your mobile phone. You can work remotely from anywhere.
The online or cloud-based software also mostly allows you to automate certain important tasks. One such task is to have your bank account connected to Xero. Once connected, transactions will be downloaded on to your software. This eliminates you from having to manually enter the transactions.
The cloud-based software does not require you to handle/maintain the upgrade of the software. The technical upgrade is all done from the software provider/vendor.
Keyword: Xero Accounting Software