If you’re running a small business, keeping a tight grip on your finances is critical to success. The accounting apps discussed below can help keep your company in the black.
Most apps start small and add features and (hopefully) usability improvements year by year. Small business accounting apps, on the other hand, have evolved in the opposite direction. Products from companies like Peachtree and DacEasy and MYOB started their lives as full-blown, multiple-module, highly complex applications that were priced for the small business market in the early 1990s. The problem? They offered far more than most companies needed. They also used a lot of accounting jargon that people didn’t understand, and, worst of all, they could be very hard to use, even for a professional.
More than 20 years later, we have multiple versions of QuickBooks for Windows, as well as QuickBooks Online. Intuit remains the market leader, but other cloud-based applications like Xero and Zoho Accounting, which were launched on the internet instead of making the leap from desktop software, provide similar tools and usability. There are now many choices when it comes to online double-entry accounting solutions. The problem, in some cases, is that these cloud-based accounting services have actually come full circle in terms of their evolution. That is, their capabilities have begun to rival those early, not-so-friendly but powerful DOS-based applications.
Still, at their best online accounting apps have a lot to offer, as detailed below.
Even the very smallest businesses need to keep track of their money, from payrollto taxes. In fact, many operate so close to the bone that every dollar is critical. Very small businesses and freelancer need accounting software at least as much as their larger counterparts. The problem is, what they need and what a bigger business needs are most probably not the same thing at all. If you’re a freelancer, contractor, or sole proprietor and you’ve tried a cloud-based accounting solution aimed at larger businesses in the past, you may have found that you’re paying more than you really want to for features that you don’t really need. And maybe you went back to the old tried-and-true methods of keeping your books in a spreadsheet, or even in actual, literal books—made out of paper! It’s easy to understand how that could happen, but it’s a shame in this day and age not to take advantage of best-of-breed accounting software, wizard-based simplicity, access from anywhere, and the safety of an offsite backup.
But don’t despair, there’s a whole breed of online accounting tools made just for freelancers and sole proprietors, and we’ve reviewed them. The best of them are extremely affordable and offer mobile versions, integration with major banks, quarterly estimated income tax calculations, reports that make sense for very small businesses, and more. They may not offer a ton of integration with other add-ons and corporate homepages for employee access—or a bunch of other things you don’t need. The best of these services are listed in the table above, and we go into more details on the specifics of these stripped-down services in the Best Online Accounting Services for Freelancers.
For this roundup, we’ve reviewed cloud-based financial applications. Some are better suited to freelancers (as noted in the chart) than to small and medium-size businesses, since they have strengths in just one or two areas, like invoicing or estimating quarterly taxes.
The larger group contains web-based solutions that would be suitable for more complex small businesses, companies that want an application compliant with double-entry accounting rules. Each offers a core set of features that includes a chart of accounts; customer, vendor, and item records; income and expense tracking; forms like quotes and invoices; and reports.
In addition, you can set up connections to accounts at financial institutions, download transactions, and reconcile those entries with matching ones entered in the application itself. A few of the solutions reviewed here offer true inventory tracking, and most can integrate with a payroll service.
How do you determine which web-based solution is best for your small business? You probably won’t find one whose feature set exactly matches what you need. Besides, what you need right now may not be what you need a year from now.
The right apps for you will likely be based on a number of factors, including:
Small business accounting is an area where there’s still a lot of competition, which is healthy, but it makes your decision-making process harder. Consider the chart above and click through to the full reviews, take a look at the screenshots, and take advantage of the free trials offered. What you choose now may or may not be what you need in five years, but the landscape will look different by then. Change and growth are progressing rapidly, but that will be the case for a long time. So pick the best match for your current circumstances and dive in! Contact Musato Technologies today for a tailored-made accounting application and other IT services