Best Accounting Software

Accounting tools are today’s most valuable online asset of finance professionals who wish to automate accounting processes in order to cut costs and boost productivity. Choosing the appropriate programs, however, can be a daunting task, because there are many factors that need to be considered in advance. If you want to find out who the leaders in this category are check out our rankings list of top 10 accounting tools. Here are some of the basic stuff you need to know about the best accounting software platforms before you start searching:

Get to know each product with free trial

Our accounting software reviews show that the diversity of this type of software is just outstanding, and so are the carefully crafted features specialized for a single or multiple industries. This is exactly why choosing the best accounting software can either push your business to the top or be a costly pick that will complicate your financial operations. In order to overcome the challenge, you need to not only realize what is accounting software and its core features, but also compose a check list of basic requirements and expectations, and consider multiple products that can respond to them. We recommend you to either try out some free accounting software tools or to go for at least a few free trials or demo for comparison, starting with some of the top accounting software providers that are currently leading the market: FreshBooks reviews, AppsForOps Expense Claim, Avangate, StockMarketEye, Float, Nichify Apps, W3B Management Solutions, e-SignLive, NetSuite OneWorld, Zoho Invoice, Chargify, Tipalti, Xero, WorkflowMax, KashFlow, Intacct, and AccountEdge.

Targeted Businesses

• Routine small business – your accounting needs are straightforward. These include: general ledger, accounts payable/accounts receivable, fixed assets, and bank reconciliation. In most cases, you only need the basic plan or core accounting with one or two add-ons to your liking. Vendor support is needed, but very rarely, perhaps only during setup. For a more detailed look on this type of solutions check out our list of accounting software for small business.
• Growing business – you may have the same accounting needs as a small business now, but you’ll need more robust features in a few months or years. Look for accounting software with scalable options, that is, you can start with a core accounting module and add more modules later.
• Large enterprise – you will need more complex and robust accounting modules. For example, instead of getting a core accounting module with bundled budget & forecast or fixed asset features, it’s recommended to get full but integrated modules. Standalone modules can handle multiple data from different departments and consolidate them to get an overall picture. In many instances, vendors need to quote a price based on the large enterprise’ specific processes. If you need some suggestions on this type of tools take a look at our list of accounting software for enterprises.
• Specific industries – some businesses like engineering and construction firms require features that enable them to break down costing and estimation by project or other categories. Software development companies also need features to match the development phases specific to launching new products. Likewise, nonprofits and fundraising entities need accounting solutions that incorporate reporting requirements specific to them. If your business has a specific need, check for accounting solutions that specialize on your field.

Accounting Software for enterprises

More than SMB assets, accounting software tools are designed for large enterprises in need of robust and complex finance modules that can handle large amount of data. Most of the well-developed accounting & finance systems are built and integrated in accordance with large businesses’ requirements, and provide the full ROI and functionality picture, rather than simply forecasting the budget or handling fixed assets. At the same time, accounting software products are designed to blend within every software architecture, eliminating the need to pay for additional functionality. Most of these product are also priced by quote, so that they will give every business exactly what it needs. For a more detailed overview of the category there is also our top 15 accounting solutions that you can take a look at to do general comparisons of the different programs.

Examples of Accounting Software

• FreshBooks: A smart cloud solution for small businesses that can streamline client invoicing. Its distinctive features are recurring subscriptions and the possibility to collect payment online (via PayPal, for instance).
• QuickBooks Online: an ideal accounting software for freelancers and small businesses. This app allows full capabilities to up to five users and limited functionalities to an unlimited number of users.
• Brightpearl: A multi-channel retail management system that handles inventory and accounting at a single platform. It is highly recommended because of its strong integrations with major retail platforms (Amazon, eBay, Magento, etc.)
• Intacct: A recognized CPA’s financial-related applications provider, suitable mostly for growing businesses that require active financial monitoring.
• QuickBooks Enterprise: It has an intuitive and easy-to-read interface, which is why it is perfect for non-accountant users. Together with the basic packages, it offers industry-specific solutions.
• Xero: An online accounting app for small businesses and individual users which features a collaboration section for group financial activities.
• Zoho Books: an intuitive accounting solution designed for small businesses to handle their finances and to remain on top of their cash flow.

Types of Accounting Software

Accounting software can optimize your business in many different ways, depending on who you are or what you’re looking for. Sometimes it’s better to take a look at the bigger picture first, and define the category you belong to before investing in a product.

• Payroll Software. Payroll programs are standard tools for accounting and drafting reports, which work with drag-and-drop capabilities and are usually easy to understand. Their main feature are cash-flow calculators applied by multiple users, and they are far more industry-specific than other accounting products.
• Enterprise Resource Management Software (ERP). ERP suites include all the standard reports and financial tools, the same as points of sale, inventory control, billing, purchasing, and customer relationship management. They can also be industry-specific, particularly for sectors such as construction and manufacturing.
• Freemium Software. The main difference between this type and the other two types is that accounting features are slightly limited, or require paid subscriptions in order to be accessed. Most of them are on-premise, meaning that you have to use your company data or your financial information to download them.

Key Features of Accounting Software

• Core accounting – it’s the basic component of all accounting software, so make sure you’re getting this module. Features include general ledger, accounts payable, accounts receivable, fixed assets, and bank reconciliation. Most vendors offer this as their basic plan, while a few vendor even give it away as a freemium to get you on board for future paid subscriptions.
• Billing & Invoicing – this module can be part of the basic module or as a separate component. It lets you to automate routine collections. Billing & Invoicing can vary by industry based on payment methods, industry standards and practices, and scale of operations.
• Budget & Forecasting – often packaged as an add-on, this module lets you estimate next year’s budget based on historic data and sales targets. A standalone module can consolidate different departmental budgeting and forecasts for an overall company estimates, while a bundled feature usually only allows a single budget and forecast tool.
• Fixed asset – whether as an add-on or bundled with core accounting, fixed asset lets you manage financial information on important company assets. Features include depreciation calculation; audit history; and cost. This module is critical if the business has a lot of assets in different forms. Otherwise, a bundled fixed asset may suffice.
• Payroll system – lets you process employee payrolls, print checks, automatically withhold and pay taxes and create legal and tax reports on schedule. The module is often packaged as an add-on or standalone product. A practical feature to look at is an automated reminder when to issue government payments to avoid penalties.
• Project accounting – it’s usually packaged as a standalone product targeted at businesses with project-oriented operations like construction and software firms. This product is usually bundled with core accounting on top of costing and estimation of overheads, labor, materials, and equipment, among others. Project accounting solutions range from simple systems that can manage projects one at a time, or complex solutions for multiple and simultaneous but interrelated projects.
• Fund accounting – targeted at nonprofits and government agencies, which have a separate set of financial reporting requirements. Features include: tracking donation expenditures; grant management; and Governmental Accounting Standards Board (GASB) regulations.
• Inventory management– it’s a specific module to manage inventory. The system allows you to manage the movement of products to avoid over or under stocking. It features tools to track orders, sales, and deliveries. More specific inventory systems have a tool to calculate stock depreciation if your business has a low shelf-life product line.

Benefits of Accounting Software

Automating finance and accounting processes is driven by the need to cut costs and to improve productivity, relying on a transparent financial picture to reveal trends and opportunities. These are some of the most important advantages and benefits of accounting software:

• Improved productivity. The role of a proper A&F program is to drill deep into your daily routine and to take over complex processes that take hours to complete. What it does is to collect data, organize it, and analyze it for you, automatically meaning that you can focus on more important tasks in the meanwhile.
• Savings. It doesn’t mean that you have to start all over – A&F products are made to be integrated into your existent financial framework, so you don’t have to worry about adjusting them to standards and revenue frameworks. Thinking about it, having an A&F system that will integrate multiple data operations in one platform is more cost-effective than running multiple systems and transferring data manually.
• Resource Transparency. The magic of A&F systems is that they make finance management easy, and are usually packed with explanations and simple interfaces for non-accountant users. For you, this would mean that you don’t have to train staff to use them, and that everybody in the company will be familiar with your financial capacity even without explaining.
• Automatic Production of Documents. Together with the fact that it wraps data into comprehensive views, an A&F system can also generate reports based on it. Invoices and credit notes will be produced automatically, and the risk of human error will be completely eliminated.
• Smarter Strategies. Remember that your intention is not only to have bills clean at the end of the month, but to use your current financial state to develop smarter strategies for the future. A&F systems will enable you to forecast possible scenarios and to follow trends, because they are fast enough to meet the needs of the growing financial markets.

Latest Trends

Nobody knows what the future will bring, but that’s not a reason to be fraught by close misses and half-truths. Therefore, we can’t expect a huge outbreak in the case of Accounting Software, but rather an extension of what has been happening so far:

• Cloud storage will become the only storage. Yes, local storage is on its way out, and it doesn’t take to be a fortune teller to predict it. That’s the only way mobile technology will make sense for people to access their files on the go, being sure at the same time that they are protected.
• Smart scanning for less data. That’s where innovation becomes visible. The introduction of Optical Character Recognition will enable us to transform printed materials into digital data in minimal time, meaning that accountants can forget about manual checks.

Potential Issues

• General vs. industry-specific accounting – An accounting software designed for your industry outperforms a general accounting solution. But consider other factors like vendor support, integration, and scalability to ensure the industry-specific software is truly superior.
• Cross-process integration – other business processes like CRM, sales software, and project management solutions often work best when integrated with your financials. A reliable accounting software should not be capable of integrating to its own modules, but also across other processes. If the accounting software can export data to standard file formats like CSV, TXT, or PDF, it’s likely compatible with other business solutions.
• Scalability – even if you’re a small business, give scalability a serious look. You can never tell if your business needs to expand, along with your financial needs. At the least, the accounting software should let you export data in case you need to get a more robust solution in the future.

Types of Deployment

Accounting software can have three deployment types. These are (1) on-premise, (2) cloud-based, and (3) hybrid. Each has its pros and cons. So, you have to carefully consider which one fits your business and culture. 

On-Premise. This classic deployment type requires you to install the software in your office machine. The best pro about this is that you can work offline while the biggest con is an issue of security, related to hardware loss or failure. Also, software products of this deployment type tend to not have collaboration features. Users only pay once for these types, which may last only until the next major upgrade. 

Cloud-based. One great thing about cloud-based accounting software is that you can access your data anytime, anywhere, and on any device. Also, you don’t need costly powerful hardware for this to run. You outsource the computing power to the software provider. One major benefit is that this allows for easier collaboration. There are three major cons: (1) they come in recurring payment plans, (2) you can’t access your data without connecting to the internet, and (3) security/privacy of your information could be at risk.

Hybrid. Some accounting software products have both an on-premise client and an online portal. This really takes the best of both deployment worlds. You can work offline and you can perform work and store your information securely online. Also, you can collaborate with other users here. However, this deployment type may be costly. 

Payment Schemes and Costs

Cost is a very important factor to consider when choosing the right accounting software system for you. You cannot go overboard and spend on an advanced platform designed to streamline your accounting but will set you back with its price. Also, costs come with payment schemes. Also, different software providers offer different payment options. Here are the most common ones. 

Free. Yes, there are free accounting tools out there. You can refer to our FAQ section about them. 

One-Time. There are software companies that will give you access to their products for a one-time fee. Usually, prices depend on the number of user licenses. Some companies offer a lifetime license with free updates. Others make customer support and product features obsolete when they roll out new versions. So, watch out for these kinks when you first sign up. 

Monthly Subscription. This payment scheme is popular among SaaS providers. It’s perfect for when you are new to a software solution as you can opt-out easily. However, it’s usually more expensive than its yearly counterpart. 

Yearly Subscription. This payment plan, as its name suggests, lets you pay for one-year access to a cloud-based accounting software solution. It is usually offered cheaper than the monthly plans. However, it is harder to opt-out. 

One way to ease yourself into a long-term payment plan is to start with a free account first. Or, if a provider doesn’t have a free version, check out their free trial. When you like what you have, you can then test it for a few months more with a months-based subscription. If you think you can go with the product long term, then its time to subscribe to their much cheaper yearly plans.