Compare the Top 4 Accounting Software Systems – Which is the Best?
There are so many bookkeeping and accounting software systems available these days – how do you choose just one? Each software claims to be the best, so how do you know who to trust? Throughout my 20 years of experience as a Corporate Controller, my experience in managing a team of Certified Public Accountants (CPAs) and through my BBA in finance and MBA, I have gathered a wealth of knowledge around accounting software. I’ve seen how programs have changed and developed over the years. I can tell, quickly, which bookkeeping and accounting solution is going to be best for each individual business.
In this article I’m going to compare the most popular and widely used solutions at the time of writing. This is not to try and sway you in a particular direction, it’s to compare the cold, hard facts and sift through the marketing and advertising that glorifies each program. Each serves a purpose, all you need to do is find the one that best suits your individual needs. Bookkeeping is a professional skill. Unless this is one that you possess, chances are, you’ll be outsourcing this to a bookkeeper. This financial partner should have a good understanding of what you and your business needs. But it’s still good for you to have an understanding of the accounting solutions available.
In my professional opinion – QuickBooks and Sage (see below) are the only full accounting products. It’s an American solution for American business owners. You don’t have to be an accounting expert to use it. That being said, to get the most out of it, you would require some training. If you have a bookkeeper or accountant, you can collaborate and share your books with them seamlessly. You didn’t start your business to balance books all day – so being able to hand over the responsibility to your bookkeeping professional is a vital part of any good accounting solution.
Of course, there’s the ability to connect your bank account and automatically import and categorize your transactions – this is a basic requirement of accounting software these days. With QuickBooks, you can download their mobile app which allows you to take photos of and store your receipts while you’re out and about – long gone are the days of keeping receipts in shoe boxes!
There must be a reason that 4.3 million people, globally, choose to use QuickBooks as their accounting solution. Their basic price plan is $20 a month, one of the priciest on the market.
Here’s what $20 a month will get you with QuickBooks:
- You can track your income and expenses, so you know where your money is going. Securely import transaction from your bank, credit cards, PayPal and more. You can automatically sort transactions into tax categories to maximize your deductions and instantly see how your business is performing with profits, losses and expenses on your dashboard.
- You’ll have the ability to capture and organize receipts using the mobile app. You can sort and link expenses to transactions and stay organized with everything in one place.
- Maximize tax deductions by organizing income and expenses into tax categories. The ability to share your books with your bookkeeping professional is not only a useful feature, it’s vital.
- You can send professional looking invoices, accept free bank transfers and credit cards, track the status of invoices, send reminders and match payment to invoices automatically. You can send your customized invoices from any device so you’re not tied to a desktop.
- QuickBooks allows your bookkeeping professional to help you run reports such as profit and loss reports, expenses and balance sheets. Tracking cash flow and creating professional looking financial summaries will help you know where you stand.
- You can send professional estimates that are in keeping with your brand and business. You can accept mobile signatures and turn estimates into invoices with one click.
- Track sales and sales tax with automatic calculations on your invoices. You can even accept credit cards with a mobile card reader and connect to e-commerce tools like Shopify.
Final Thoughts on QuickBooks
As you can see, with QuickBooks you’re getting a lot of bang for your buck. Even the basic price plan has got more than what most small businesses need. As QuickBooks is a full accounting solution, it can be a little complicated and not as easy to use as the marketers make it sound. In order to get the most from this tool, you’d need to undergo training on the platform or have your bookkeeping expert take the reins. This would free up your time so you can run your business but also give your bookkeeper all the tools they need to support you and your business.
I’m not going to dwell on Xero too much. While trying to remain impartial and tell you the facts, in my opinion, Xero can handle many small needs, but in order to make it a full accounting product, you would need to purchase a lot of add-ons that would accumulate to a lot of money. In my eyes, you’re better off going for a full accounting solution to start with. This will save you both time and money. For the sake of being inclusive, let look at what Xero can give you.
Xero is primarily for UK based businesses and works a little differently on the pricing front. All of the plans that Xero offer cover the basics:
- You can invite others to collaborate
- You can create reports
- There are IOS and Android apps
- You can connect bank accounts
- 24/7 support
- SSL encryption
But here’s the catch. The basic plan which costs $9 only allows you to send 5 invoices and quotes, enter 5 bills and reconcile 20 bank transaction a month. After that the price plan jumps up to $30 a month and then $70 a month. It is also cheaper in the UK for the $70 package. Xero is trying to be a major competitor in the US. This is my favorite option for my UK clients because all levels calculate VAT.
Wave has served over 3 million customers and tracked over $180 billion in income and expenses since their launch in 2010. There must be a reason that 3 million people have chosen this accounting platform. First and foremost, the main factor that attracts small business owners to this platform is that it’s free. It’s hard to resist something that’s free – but as with everything in life, you get what you pay for. I would say that Wave will help very small businesses if all they need to do at this moment in time is create estimates and send invoices. If you’re just getting your business up and running Wave would be a simple, short term solution until your business starts to grow and pick up momentum. Don’t be fooled – Wave is by no means a full accounting product.
Pros for Wave
- You can quickly create and send professional looking invoices
- You can send invoice reminders
- Wave allows you to accept credit card payments so you can get paid faster
- You can connect your bank account
- You can scan and send receipt to Wave
- The program is 100% web based
- You can download free apps for sending invoices and scanning receipts
- Protected by 256-bit SSL encryption
Cons for Wave
- This is not a full accounting solution, only a short term one
- Depending on how fast your business grows, you’ll need to change to another accounting platform at some point
- It’s not bookkeeper or accountant friendly
- You’ll be charged for credit card processing and payroll
- You cannot produce detailed reports
- You cannot have multiple users
- It’s limited in its capabilities compared to other accounting software
I’ve saved the best for last. While trying to remain impartial, Sage must be my favorite accounting solution. Here’s the quick facts:
Sage was founded by a man called David Goldman who wanted to automate the accounting process for his own business – so it was made by an accountant for other accountants and bookkeeping professionals, not by marketers
- The company employs 13,000 people and serves millions of customers in 23 different countries including mainland Europe, Africa, Australia, Asia and America
This software is a premium, paid accounting solution. Not only does it manage accounting, it manages HR, payroll, payments, assets, construction, real estate and enterprise systems. Sage offers business the freedom to work on the move with the cloud, and also on the businesses premises. They have a solution to fit the needs of startup businesses, those who are looking to scale up as well as larger enterprise companies.
With Sage, there’s a wealth of choice and support available. That’s what makes it, not only popular, but effective as an accounting program. Having seen so many different accounting solutions, Sage is still one of the top recommendations I would make, purely because there’s something to suit every business in any stage of development. Sage also allows me the access that I need as a bookkeeper to be able to help and support my clients in a way that’s in keeping with their needs.
From a client’s point of view, Sage’s social and mobile technology provides live information so you can make fast, informed decisions anytime, anywhere in the world. With a good, experienced bookkeeper and Sage by your side, you’ll be able to understand your cash flow so you can track your income, expenses, and chase invoices. You and your bookkeeper will no longer have to spend hours reconciling your bank accounts because Sage does this for every transaction on your statements—automatically. Even while you’re out of the office, you can create and send professional-looking quotes and track payments against invoices using your mobile phone or tablet. Sage is a really powerful accounting tool.
This information is impressive, but if you’re just starting your business, you’re probably wondering if it’s worth paying for this accounting solution. I would argue that it absolutely is and here’s why. For as little as $10 a month, you get:
- Record income & expenses
- Bank reconciliation
- Accountant access
- Instant automatic backup
- Supports one user
You don’t need anything more than this when you first start out, but you’ll have the opportunity to scale as your business grows without having to switch to another accounting solution.
There’s no one-size fits all for bookkeeping and accounting software. The perfect solution is dependent on so many factors like the size of your business and the country you’re doing business in. However, the solution is not as complicated as you might think. All you really need to do if find a dedicated bookkeeper that you can trust. Someone who’s going to be an advocate for your business and help you get on top of your finances. A good bookkeeper will help you to choose the software that’s most appropriate for your business. They will help you by suggesting which one best suits your needs.
Don’t believe everything you see on the software’s websites – of course it’s going to tell you what you want to hear, just so they can make the sale. Sadly, accounting software appears to be designed by marketers more than accounting professional these days.
Unfortunately, I don’t feel comfortable endorsing any of these softwares. Not because of their quality – they all serve a purpose for someone. The reason I’d rather not make a recommendation is because the product that’s going to be the best fit for you and your business is dependent on too many varying factors. I cannot make an assumption without knowing more about you and your business. If you would like me to assist you in deciding which bookkeeping and accounting software is best suited to your needs, then please feel free to contact Tralissa Inc. at firstname.lastname@example.org – I’d be more than happy to assist you.
To see similar articles by Traci Yates