You should consider online accounting software for small businesses like a hammer in your tool box. If can very much serve as the foundation for the finances of the small business, however, it is not the only tool in your arsenal.
Some online accounting software for small businesses like QuickBooks and FreshBooks are complete, all-in-one packages. You really only need that program to handle everything from payroll to inventory, invoices and receipts.
However, some online accounting software for small businesses like Xero and ZipBooks handle some aspects of accounting while not being strong in other areas. Therefore, they are best when combined with other software and/or accounting team members.
Finally, there is the consideration of price. QuickBooks is the highest rated online accounting software for small businesses but also the most expensive. Wave Apps, meanwhile, is completely free to use but lacks certain features. However, if you are a startup short on funds — it is far better than nothing.
The first step is to figure out a budget. How much can you afford to spend on accounting software in addition to your accounting staff, if applicable. If it’s just you, then online accounting software is highly recommended for your small business.
Other factors in addition to cost to consider for your small business:
- Ease of Use: What is your skill level with computers? Are you able to use one proficiency or is your knowledge lacking. Some online accounting software is dedicated to entrepreneurs that may rarely use computers for their small business — such as mechanic or construction trade.
- Accounts Receivable: A huge part of accounting is managing receivable accounts. After all, you need to get paid for your services and it only happens by creating professional looking invoices and getting them to the customers. From there, it is a matter of tracking payments.
- Bank/Credit Card Accounts: Online accounting software connects you to your bank accounts and credit cards. It makes it not only easier to receive payments, but also keep an eye on business expenses and overall available funds.
- Payroll: The processing of payroll varies widely based on the type of online accounting software. Some even track time and automatically deduct taxes from pay stubs, while others only provide manual time entries or no payroll at all. Selecting a provider may very well depend on how much you need accounting software to assist with payroll.
- Financial Statements: Online accounting software typically provides detailed reports about the financial health of the small business. The reports can include everything from profit and loss, balance sheets, and statement cash flows. Customizable reports are also available with some providers.
- Payment Types: How do you want to get paid? Small businesses can accept payments in a variety of ways, with one of the most convenient being online payments. Accounting software can help direct cash flow to your bank account or credit card, or both.
- Prepare Key – Prepare Profit and Loss, Balance Sheet, and Statement of Cash Flows
Now is the time to master accounting for your small business. Online accounting software is not only convenient but it saves time and money – two vital aspects of any small business success. If you have been doing it the old fashion way, now is the time to make the transition as online accounting software is very affordable and for the most part easy to use.