Your Guide to Software Selection

The Best SME Accounting Software

Imagine what would happen to your business if you woke up one day, started running through your balance sheet and discovered huge discrepancies. (Houston, we have a problem.) Accounting is a fundamental part of running a successful business, and accounting software for SMEs — small and medium-sized enterprises — can often mean the difference between business bang or bust. Use the right SME accounting software and everything runs like a well-oiled machine. Choose the wrong one, and you’ll break the bank — literally.

This article will cover important factors like what questions you should ask as you conduct your search, how new accounting software will impact your business and which vendors offer the best solutions for small businesses.

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Here’s an overview of where we’re headed:

What You Need to Consider When Choosing Your Accounting Software

Before you even start the process of gathering information, keep these 10 questions in mind:

  1. How many users, if any, will need access to the software? And is there the option to restrict access for specific users?
  2. Is desktop sufficient or is the mobility provided by a cloud-based program necessary? (More on that below)
  3. What are key features essential to run the business? E.g., if you have inventory, you’ll need a way to track it, or if you have employees, a payroll option is essential.
  4. Is the software designed for a specific industry such as manufacturing or construction?
  5. How can the program save you time and hassle with options like automatic tax calculations and recurring invoices?
  6. Are any fees added to the base cost? And is a free trial version available?
  7. What types of customer service and tech support does the provider offer?
  8. How is data protected? Are there security measures like encryption and authentication in place? How is data backed up and restored?
  9. Can you add features or upgrade as needed to enable the software to grow with your business?
  10. Is the software compatible with your bank so you can download transactions?

Asking these ahead of time will make your job a lot easier and help weed out options that not aligned with your businesses requirements.

How Accounting Software Keeps Your Business Afloat

SMEs, or small to medium enterprises, are the backbone of any economy. In fact, 99.9 percent of all the companies in the US are small businesses, which means you’re not alone in facing some of the most difficult challenges in your day-to-day operations. Challenges such as targeting new customers while retaining current ones, raising brand awareness, finding competent and motivated employees and more. And you have to do all this while keeping a finger on the pulse of the current trends and technologies in your industry.

Still, one of the biggest problems your business can face is cash flow issues. While sometimes that’s a result of economic downturn, more often the culprit is poor planning or lack of a thorough, organized accounting process.

That said, the right accounting software brings some considerable benefits. Here are a few of the top:

  • Avoid penalties and take advantage of discounts by having full control over your accounts payable, and make sure you get paid in time with enhanced control over accounts receivable
  • Gain new levels of insight into your cash flows and payment processes
  • Track all transactions with seamless scaling and implementation of new products or services, and find new ways to improve overall efficiency in the process

It’s no wonder professional accounting software for SMEs is in such high demand. To ensure steady business growth, you need to take advantage of professional accounting help.

Because let’s face it: you don’t want to become one of the 50 percent of businesses that fail within the first five years, or the mere 33 percent that survive the first 10. Your goal is to maximize your chances of making it where others don’t, and implementing the best practices for managing your funds is a vital part of the process.

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Top Accounting Software Options for Small Businesses

Luckily, technology advancements have made professional accounting software much more accessible to small business owners, providing most of the same functions as traditional accounting help.

Naturally, companies have capitalized on the demand, leading to a plethora of choices. Hop on Google, and it’s not hard to find an SME accounting software touting its services. Each business has different needs, and to accommodate the variety, accounting software solutions offer a diverse range of features, such as billing management, distributed order management, payment processing and supply chain and inventory management to name a few. Unfortunately, this makes it harder to find a solution that fits your exact needs.

With all the different accounting software out there, how can you know which is right for your business? We’ve put together a handful of the best cloud-based accounting systems for SMEs. Let’s take a look:

QuickBooks Online

It probably doesn’t come as a surprise that QuickBooks made our list. It’s an intuitive and simple yet powerful cloud-based accounting software for SMEs that provides easy online access, extensive tracking options and many other important features for small businesses.

With QuickBooks Online, invoicing, accepting and sending payments, and even bookkeeping all become much simpler to manage. You can also capture receipts with your phone; create invoices, estimates and quotes; track expenses; and run reports. And when tax season rolls around, the software helps you estimate your quarterly taxes (with the self-employed plan) or maximize your tax deductions.

QBO Invoice Example

Example of an invoice.

QuickBooks Online works on Android, iOS and the web as well as seamlessly integrates with a lot of other software solutions, including Square, PayPal and Shopify. That’s a significant benefit since it means you don’t have to worry about working on multiple systems for different parts of your business. When you’re managing most (if not all) of the work yourself, streamlining is the name of the game.

As for pricing, you can check out the software with a 30-day free trial and then choose from several tiers, depending on your needs:

  • Self-Employed (for sole proprietors): $5/month
  • Simple Start: $10/month
  • Essentials: $17/month
  • Plus: $30/month
  • Advanced: $60/month

QuickBooks also offers add-ons for each price point. All options come with the QuickBooks Live Bookkeeping option, where a certified bookkeeper will help you get everything set up and provide ongoing support. If you need to run payroll, all but the self-employed tier let you pick from self-service payroll (the DIY version) or full-service payroll (where an expert will do everything for you).

Specific benefits include:

  • Easy to use interface and navigation
  • Easy invoice customization
  • Unlimited invoices via email
  • Mobile accessibility
  • Online banking
  • Easy third-party integration
  • Dashboard customization

QuickBooks offers support via community portals, and if you work directly with a QuickBooks bookkeeper, you’ll have continual, personalized assistance.

Price: $$$$$
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Company Size Suitability: S M L

Xero 

If you prefer software that’s won some awards, look no further than Xero. Most notably, it claimed the title of the World’s Most Innovative Growth Company on Forbes two years in a row (2014 and 2015).

Behind the accolades, however, you’ll find online accounting software that’s more than capable of handling the myriad needs associated with running the finances for a small business.

The software comes with essential accounting functions like invoicing, bank reconciliation, bill pay and reporting. It also supports more complex business activities, such as running payroll, tracking inventory, purchasing orders and converting to multiple currencies. If you have employees or run a product-based business, having access to these features will make your life easier.

Xero Multiple Devices

Access your info from multiple devices.

Like QuickBooks, Xero offers a 30-day free trial, after which you can choose from the three price categories based on what stage your business is at:

  • Early: $9/month
  • Growing: $30/month
  • Established: $60/month

What do you get when you use Xero? Here are the top benefits:

  • Price and quality
  • Cash coding
  • Find and recode
  • Management report
  • Ease of use
  • Easy third-party integration

Xero provides support through an extensive FAQ repository.

Price: $$$$$
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Company Size Suitability: S M L

Wave

Can’t afford to bust your budget? Wave is free accounting software for SMBs. What do you get for that lovely goose egg of a price? More than you might think. Customize your sales taxes, journal transactions, accept payment in foreign currencies, calculate exchange rates, set reminders for bills and invoices and search transactions descriptions.

Wave Accounting Dashboard

The dashboard view gives you a snapshot of your accounting data.

Using Wave, you can expect the following benefits:

  • Easily send receipts and invoices to clients
  • Free pricing model
  • Fast invoicing
  • Easy to sync
  • Mobile compatibility
  • Multi-currency capabilities
  • OnDeck partnership

If you ever need help, you can turn to Wave’s customer service team, the phone and chat services, the Wave help center, their YouTube channel or blog, Wave+ (professional accounting and bookkeeping services) and their community.

Price: $$$$$
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Company Size Suitability: S M L

Sage 50cloud

If you’re a Microsoft user, this is a solid choice. You can automatically sync Sage 50cloud with your contacts in Outlook, giving you easy access to customer information. And thanks to integration with Office 365, it’s a breeze to use apps like Word, Excel and PowerPoint from anywhere, on any device.

Sage 50cloud Office Integrations

Integration with Office 365 apps and more.

More than a bare-bones solution, Sage 50cloud gives you control over extra functions you might not find with more basic products. The features let you track income and expense management, manage your inventory, pay bills, invoice customers, grant remote access to data for any employees or your accountant, and set up automated bank feeds. The higher priced tiers also come with advanced budgeting options, audit trails and more.

Currently, Sage 50cloud only offers support for web and Android devices, so if you’re an Apple lover, you’ll have to look elsewhere.

If you want to give the software a whirl, there’s a free trial option. After that, the subscription-based pricing breaks down like this:

  • Pro Accounting: $465.95/year (for a single user)
  • Premium Accounting: $730.95/year (for a single user, but with the option to add up to five users)
  • Quantum Accounting: $1,834.95/year (for three users, with the option to add up to 40 users)

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With Sage 50cloud, you can expect benefits such as:

  • A robust reporting function
  • A strong inventory reporting system
  • Security
  • Customization of client information
  • Ease of use
  • A user-friendly interface

Finally, Sage offers a variety of support options. You can create a support ticket or if you need an immediate answer, hop on live chat. You can also turn to the in-software help, knowledge base, forums, on-demand learning topics and year-end resources. And for updates, you can follow Sage on Twitter.

Price: $$$$$
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Company Size Suitability: S M L

FreshBooks

FreshBooks caters specifically to small businesses, and it clearly shows. The intuitive and easy-to-use interface makes accounting tasks such as billing easy to learn, so even business owners with little accounting experience can use it without raising their blood pressure and stress levels.

You can automate various time-consuming tasks such as following up with clients or organizing expenses in just a few clicks, and since it’s cloud-based, you always have access to all your information and processes no matter the device you’re using at that moment.

Some of the top features include invoicing, time tracking, automatic expense tracking (just connect your credit card or bank account), estimate creation, reporting and payment acceptance, giving small business owners a range of functionality to meet their needs.

Freshbooks Carousel Invoices

Example of a new invoice.

When it comes to devices, FreshBooks works on the web, Android and iOS, and the mobile app guarantees you’ll have access to your information no matter where you are.

FreshBooks offers a free trial and then several tiers of affordable, subscription-based pricing. Here’s the breakdown:

  • Lite: $15/month
  • Plus: $25/month
  • Premium: $50/month
  • Select: custom pricing

Freshbooks provides plenty of benefits for your business, including:

  • A dynamic solution for SMBs
  • Responsive mobile design
  • Time-saving auto-bills and recurring payments
  • Support for seamless project collaboration
  • Custom invoices for clients
  • Unlimited access to the data

Users have support thanks to an impressive FAQ section on the FreshBooks site, or you can email or call if you have specific requests.

Price: $$$$$
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Company Size Suitability: S M L

Is Cloud or Local Better for Your Accounting Software?

A key consideration is whether to choose a local or cloud-based solution. It’s no secret that the cloud is the way of the future (and the future has arrived in many cases). So, what makes the cloud the better option for SMEs?

  • Mobility and ease of access: track changes on the go, from anywhere using any device.
  • No upfront commitment or investment: cloud-based software often uses a subscription model that’s relatively easy to understand and affordable to install.
  • User-friendly: vendors usually designed systems with small business owners in mind. The non-technical terms and easy-to-use interfaces mean that even with limited knowledge in accounting, you can learn the intricacies of the software in a short time.

Of course, without an internet connection, cloud-based software can’t function, and while it’s unlikely your provider’s servers will go down, it’s still possible. Also take into account that with a subscription model, you pay for the software for as long as you use it, whereas the costs for local software tend to get lower after the initial onboarding phase. However, local solutions require maintenance, so both options produce expenses in the long run.

Both local and cloud-based options have their advantages and drawbacks, and as always, keep your requirements in mind during the selection process. But the ease of use and core functionality of cloud-based solutions make them the better choice for most small businesses.

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Keep Your Business Flying High with the Right SME Accounting Software

You want your business to grow. Which means you need to be on top of your financial information at all times.

Modern accounting systems let you simplify, streamline and escape the tedious, time-sucking world of spreadsheets. Track all your info on user-friendly dashboards, link your software to bank accounts to keep everything in sync and generate reports without the headaches.

The software for SMEs available today is adaptive, with customization and scaling options that meet the individual needs of any business. Compare the options on our Leaderboard for the most up-to-date information to help you make the best choice. With the right accounting software in place, you’ll be able to spend less time managing your finances and more time growing your business.

What are some of your must-have features for accounting software? Let us know in the comments!

Zachary TotahThe Best SME Accounting Software

1 comment

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  • Quickbook Support Number - August 4, 2018 reply

    Almost every client of an accountant is a cloud user as Cloud is used in the professional world. There are so many reasons that make cloud accountant better than a local accountant. Quick book is one of best Cloud accounting software that works well for everyone.

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