I get asked this question a lot. What’s the best accounting software for a small business? The number of choices is daunting.
Unfortunately, the answer is an unsatisfying and vague, “It depends.” First, we have to define your needs. Is this a start-up with a few invoices and expenses per month? That Excel workbook you’re using might be enough, but you’re going to want something more comprehensive as the business grows. Are you going to have payroll, accounts receivable and accounts payable to track? Then you need to move beyond the ‘shoebox and a spreadsheet’ method of record keeping.
If your needs are basic, you should consider Sage Business Cloud Accounting as your first accounting package. There are two versions of this. The first (Accounting Start) is best for a start-up with no employees. You can update the bank account, invoice your customers, track receivables and prepare a dozen key reports. There are limitations, however. Payroll integration, cash flow forecasting and accounts payable are not available. It’s currently $14/month, so I guess you can’t expect too much. The second version (given the unimaginative name ‘Accounting’) will allow you to perform all of these functions without using offline tools, all for the low, low price of $30/month.
Another alternative is Freshbooks. It’s easy to use, but the Lite package is rather restrictive (five customers) and not really a value, even at $15/month, for businesses with a wider customer base. Wave is just as easy to use, and the price is right. Its basic functions are free, but it can get just as pricey as the market leaders if you need the payroll module. The base fee is $20 plus $4 per active employee per month.
If you’re going to outsource your accounting, I would stick to the market leaders. It’s much easier to find someone who knows QuickBooks Online and Sage 50 (desktop) than it is with more obscure products. If you need to upgrade your software needs, migration is easier if you are using a software vendor with packages for all sizes of business. The two major companies are The Sage Group PLC, based in the UK, and Intuit, based in Silicon Valley.
Sage used to sell Simply Accounting and they acquired Accpac years ago. You’ve probably heard of those names, but the company has rebranded much of its lineup.
Intuit makes QuickBooks software (as well as Quicken personal financial management software, Turbo Tax for personal income tax and products for professional accountants). And they also own Mint, the financial management software.
Your operating system will also be a deciding factor. Virtually every accounting package that I have ever heard of runs on Office, but many of these software programs will not run on macOS and/or Linux, including some of the market share leaders.
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