For as long as trade has existed, so has accounting. Goods are sold, profit is made, expenses are accrued, and everything gets recorded (presumably, ha!).
And it wasn’t THAT long ago that electronic spreadsheets were considered “a big advancement” in accounting technology. Businesses put away those old ledger books and took to smudge-free financial data entry.
Today’s small business accounting software is another thing altogether… minimizing mathematical error, quantifying a business’s financial health, making predictions, creating KPIs – and all done in a matter of seconds.
And like any good product out there, there are a multiplicity of options to choose from (even if the process is somewhat painstaking).
But before I get into how to make that choice…
There are a couple of things you should think about putting on your Indianapolis business’s spring cleaning list: checking for obsolete inventory or uncollectable debts. Some goods just don’t get sold and some debts just can’t be collected.
The plus side of looking into these? Tax deductibility. If you want to talk more about these or any other deductions your business could be taking, let’s chat:
Now, you might feel like Goldilocks when it comes to choosing the right small business accounting software for your business, but here are some insights to help you decide …
Small Business Accounting Software: The Indianapolis Owner’s Guide
“One man’s crappy software is another man’s full-time job.” – Jessica Gaston
Nobody runs a small business long before learning the importance of managing and tracking finances.
Enter small business accounting software, which can also organize receipts, reconcile your books and talk to us and your bank to take a lot of tax and money-related stuff off your plate – not to mention lower the chances of an expensive mistake.
We kick off our series on software breakdowns here with a look at what’s involved in finding the right accounting software.
Oh, the choices you have
You basically use accounting software to track transactions to or from your business to an individual or another business, whether to customers or vendors or some other A/P or A/R source.
If it seems like there’s a bewildering variety of accounting software out there to handle this job, that’s not your imagination: There is. Start by narrowing the offerings according to what industry or industries they can serve best. You want one of those industries to be yours.
Most small business accounting software brings you similar advantages. You’ll get a better idea of your outgoing and incoming cash flow from a wide range of reports the software can generate. A lot of the drudgery of accounting will be done automatically, freeing your time for more important jobs. The right software will also synchronize your information for reporting and tax requirements and make it easier to work with us and other financial pros you hire.
Size does matter
Is this the first accounting software for your small business? A lot of people start with something like Quickbooks, which has an intro price of less than $20 a month (even less if you’re self-employed) as well as discounts and free trials.
Is your business at the next level, looking to upgrade from a basic accounting package? Maybe you’re looking for functions such as forecasting, more data storage, or accounts for different staffers or offices of your company. At this stage especially, look for software with experience in your industry.
If your business has grown beyond that, you might be nearing an enterprise-class operation that needs accounting software to handle multiple offices and maybe international operations.
And if you’re anywhere beyond this level, you’re probably a company looking for truly customized accounting software.
The price tag
This software comes in as many prices as it does flavors. Most come in a subscription-based, internet-delivered cloud model where you choose your tier and pay monthly (as with Quickbooks above).
Prices run from a few bucks a month (even less) to the high double figures and more depending on your needs. Think carefully if you want/need customization, which also drives up the price. Other things that can drive up the price? Support, training, redesign, and upgrades. You can often buy such add-ons as advanced payroll (we’ll address payroll software in a future piece), CRM, HR, and more. One of your first tasks will be getting a price quote from the vendor.
At the very least, your accounting software should be able to handle your budgeting and forecasting, inventory, general payroll, financial reporting, and billing/invoicing.
Here’s a sample of features you’ll probably see as you start clicking vendors’ web pages:
Intuit Quickbooks: Tiers more advanced than what we mentioned are still well less than a hundred bucks a month for this household name in accounting software with features including seats for up to five users, on-demand online training, management of employee expenses and 1099 contractors, and app integration, among others.
Xero: The usual suspects on the accounting features page also include multi-currency capability, quick quote generation (to help you secure jobs before the other guy), sales tax calculation, and Gusto payroll interface (an add-on with a monthly extra price). Pricing from about $10 to a few twenties a month for “Early,” “Growing,” and “Established” businesses.
Freshbooks: This is a software that is designed for the smaller freelancer, or “simple” business but which offers a bit more power than the final option that I will be sharing with you. It is less expensive than the first two, and perhaps less robust … but might be perfect for the smaller, simpler business.
Wave Accounting: Organizes income, expenses, payments, and invoices with 256-bit encryption security and other touted measures for handling credit card and bank account information. It is completely web-based and uses double-entry accounting software. Claims that its most basic accounting package is free – so your first question to them might be, “Why is this free?”
Ask, ask, and ask again
Do NOT be shy when shopping for small business accounting software.
Your good questions include:
What’s included in your quoted price? How much consultation and staff training will you get without shelling out more? Are add-ons extra?
Is your system implemented by configuration or by scripting/coding? Which do you need and what’s the price difference?
How are future upgrades managed? How frequent are their upgrades? Are they included in your subscription? What about scheduling to avoid downtime?
What’s your experience serving my industry? Can you speak to current users who work in your industry?
What about security? How have they put it to the test? Can you get that writing?
Asking the right questions means you’re more likely to choose the right software for your Indianapolis business. And if you’re still not sure, you can always consult with an accountant (we know a good one).
Lastly – you can just say to us: you guys decide. And we’ll take it from there on your behalf.
Deciding on just the right software for your business financials can be difficult, especially if you’re not sure what would be best for your situation. We’d be happy to take a look at the options with you and give you our best recommendation.
And of course, we’re happy to talk about any other business-related financial decisions that you need a second pair of eyes on:
On your team,
Palmer Accounting & Tax Services Inc