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Are you tired of spending too much time on paperwork and monitoring receipts related to your business?
Online accounting software is designed to make life easier for small businesses. The software serves as the epicenter for your finances. It can help track and manage bank accounts, payroll, invoices, inventory, receipts and budgets. It has the ability to replicate an entire accounting team for small businesses that do not have the budget to staff one in-house.
Are you struggling to keep up with employee pay stubs and budgets?
How about creating invoices, sending them to customers, and tracking payments?
Online accounting software can help.
How do I know what online accounting software is right for my small business?
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.
Considerations for Small Businesses
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, than 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
Free or paid?
Online accounting software is usually provided in a subscription service. No contract is generally necessary. Instead, the small business signs up with most services offering a free trial.
If the entrepreneur likes the online accounting software after the free trial — the next step is to pay a monthly fee. There is rarely any contractual obligation. Payments for the your subscription is deducted each month from a bank account or credit card, and when you decide to cancel no additional fees are charged.
Prices can vary. QuickBooks and FreshBooks, two of the more reputable online accounting software services have a variety of plans from $10 to $60 per month. Sophisticated versions for well established small businesses can exceed over $100 per month, yet come with a number of features and tools the basic versions lack.
However, there are alternatives for small businesses on an extremely tight budget. Wave Apps, for example, is 100 percent free to use.
Accounting Software Features
The number of features offered with online accounting software does depend on the service, as well as the pricing plan. As the norm with anything, the more one pays for a service the more they are prone to receive.
There are hundreds of features online accounting software can provide for a small business. Let’s examine some of the most popular…
Most Common Features
- Double Entry Accounting: Considered the norm for online accounting software, double entry accounting utilizes at least two accounts for all transactions. Double entry accounting is designed to help with liability and small business equity.
- Transactions Downloading: Importing transactions from a bank account is a really sought after feature with any accounting software. There is no need to feel hesitant about linking bank accounts to online accounting software thanks to the advanced security of these programs.
- Cloud-based Software: All of the software we have reviewed is cloud-based which is considered the new normal. Cloud-based software provides instantaneous updates along with collaboration with multiple users, a necessity for many small businesses. Furthermore, all the vital data of your small business is automatically backed up, which is a nice luxury.
- Tax Help : Reporting tools are a gigantic luxury of online accounting software. It saves immeasurable time and energy on tax prep and helps avoid critical reporting errors that could come back to haunt your small business.
- Payment Processing: It is incredible how much time is saved letting accounting software deal with payment processing. The software can help with invoicing, budgeting, receiving and sending payments, and receiving balance sheets.
- Payroll Processing: Dealing with payroll, particular payroll tax, is a recurring annoyance. However, you can eliminate those frustrations by relying on online accounting software to handle payroll.
- Invoicing: Professional looking invoices go a long way in making a small business look legitimate. The best online accounting software features templates to make invoicing a breeze, saving you time and money. Invoicing is one of most resourceful tools for small business owners.
- Mobile App: It is not a necessity, but some online accounting software services provide a mobile app along with the subscription. It’s a nice luxury for SMBs that want to monitor finances on the go.
- Multi-Currency Support: Now with so much business being conducted online, having multi-currency support is a must for SMBs that deal with customers from all around the world. Accounting software can accept different forms of currency but is only really a necessity for certain entrepreneurs.
What will you do next?
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.
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