No matter the size of your SME, even the smallest business can reap the benefits of accounting software beyond the spreadsheets and over-stuffed ring binders you may be used to. And since accountants can be pricey, the cost often isn't justifiable either.
When it comes to accounting software, however, there's such a variety on offer it can be difficult to know where to start. Which one is going to fit your budget and be right for your business? Broadly, strong accounting software will help you manage company expenses and income, send invoices, and generate financial reports about your business. However, you'll likely have specific needs that you want your software to be able to take care of.
If this is the case, where do you turn? The range of accounting software is so much bigger than the days of Sage and QuickBooks nowadays, meaning the options available can be dizzying. Here, we'll take a look at the best accounting software that you can use to keep your finances in check and stay on top of the books...
Are you looking for something that will help you track inventory, or will you be doing a lot of receipt-tracking or sales tax calculations? Make a list of your requirements and prioritise them from least to most important. When you're ready to start looking at software, focus on the ones that can meet these needs.
You don't want to be swayed by a premium piece of software that goes beyond your needs in terms of what it can do. A service for global teams sounds good on paper, but if you only conduct business in one country, then it's something you don't need. Stick to your list of priorities if you get distracted by things like this.
Knowing how much you can spend on your software is key. Once you've identified a budget, you can eliminate the need to look at software that's outside what you've set aside. While this isn't always the easiest to stick to and some wiggle room is necessary, give yourself a cut-off point so you know when to walk away from something out of your budget.
You might find that the software you opt for isn't working for you, and that's fine, but having to switch six months down the line because you've outgrown it isn't ideal either. When contacting any sales representatives, be sure to ask them how well their product grows with clients as businesses scale up.
Something cumbersome and difficult to get to grips with is only going to muddy the waters of number crunching. Ease of use should be a key factor when looking for the right piece of software. There are plenty out there that make the most salient information clear, while some can be customised, allowing you to add or remove fields to show you only the relevant data.
Counter to what we were saying above, if your business does sell products and services abroad or makes purchases in a foreign currency, opt for accounting software that converts to your "home" currency so that everything stays accurate.
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With a robust set of features that come as standard across all its packages, Xero offers plenty even if you opt for the Starter plan. Unlimited users, a customisable dashboard, inventory management and bank account integration all stand you in good stead.
However, it's best suited for bigger SMEs who have the budget to easily afford it. Its other plans can be expensive, but they do get rid of the Starter plan's restrictions, such as increasing the number of invoices you can send.
Despite the price, its Premium plan also supports dealing with multiple currencies, while its strong third-party integration capabilities allow Xero to connect to a hundred additional add-ons.
Though some of its plans can be a little on the pricey side, Quickbooks has a reputation for having a well-stocked selection of features that can suit a variety of small businesses. Mac and Windows versions exist, though the Windows version offers more features, so keep that in mind if you don't want to stray from your Apple allegiance.
It may not be the most user friendly, but since Quickbooks is so popular, it's easy to find all manner of tutorials, guides and videos on how to start using it. Either way, both its Essentials and Plus plans are well suited to a range of small businesses. The former lets you calculate and file VAT, manage bills and payments, and make CIS deductions, while the Plus plan includes all the above plus added support to create and purchase orders, manage stock, and track costs by project, location and budget.
Additionally, multi-currency features and payroll services are also available for an extra £1 per paid employee a month.
Suited for small SMEs with little in the way of employees, inventory and other complex needs, Zoho's Books software is refreshingly straightforward, with easy-to-understand dashboards and graphs to make sense of your most important business figures.
If you've ever found yourself having to deal with clients' late payments, then one of Books' best features is its automated payment reminders. Meanwhile, its manual journal entries, financial statements, project management, automated banking, inventory and collaboration tools make book-keeping a breeze.
And what's more, all its plans are affordable, which is great news for smaller businesses with budgets to match. Speaking of which...
If accounting software is something you can't afford, Wave is a godsend. The majority of its features are free, with the ability to track both personal and business finances in one place, rather than going to one app for personal and another for business, being a particular highlight.
While its accounting features aren't as in-depth as other software we've listed, Wave is a sound option if you only need the basics.
For freelancers and contractors with little to no accounting experience, Free Agent is particularly helpful. User-friendly and intuitive, it's free for the first 30 days, and offers affordable six month and annual subscriptions for sole traders. Great for those working with freelancers too, its multi-user options and time-tracking features make it easy for them to log in and complete their timesheets.
Invoice creation is simple to use, with payment reminders popping up at set dates after bills are past due, while its one-click reporting creates a self-assessment summary for income tax too. It's even possible to forecast your Corporation Tax ahead of time.
For sole traders looking to stay on top of their taxes, Free Agent makes everything smooth and straightforward, allowing users to file directly to HMRC in just a few steps.
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