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Best accounting software for small business

Best accounting software for small business

In this article, we look at the best accounting software for small business. So quick question, what is accounting software and what can it do to you

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In this article, we look at the best accounting software for small business. So quick question, what is accounting software and what can it do to your small business? Accounting software helps businesses maintain financial data and display it in important reports which can help you analyse the numbers of your business and report the data to important people.

We find that businesses that don’t use accounting software tend to not know how their business is going at all. Most accounting softwares assists you with invoicing, bills, payments, payroll and taxes. They also help you generate financial reports.

A lot of startups ask me the question, “Do I need to use accounting software? Because I don’t really want to pay for one or my business is too simple and small.” 

I answer this question with more questions back to them: “Look mate, do you want a loan? Or do you want to employ employees? Or do you want to grow your business?” 

What are the Benefits of Using an Accounting Software?

The benefits of using accounting software. The importance of accounting software at the moment is enormous. Without it you cannot think of running a business. Accounting software helps in;

  • speeding up the information recovery process; 
  • adding flexibility in the bank reconciliation process; 
  • automatically planning value-added tax and goods and services tax; 
  • saves time and minimizes errors;
  • provide computerized invoice money receipts;
  • provide cash flow statement and profitability report;
  • remove business complexity; and 
  • perhaps most significantly offers an ability to see the financial status of the business in real time.

I think you’re clear about what accounting software is.

Why small business Accounting Software?

It is important for all businesses to utilise their accounting software so they can understand their numbers and know their profit, assets, liabilities, taxes and cash flow. Businesses require this information so they are able to make the right decisions in their business.

And also, they need to provide this information to third party organisations such as the ATO, banks, insurance companies and investors. 

The banks and insurance companies require you to have financial reports to be sent to them on an ongoing basis, sometimes quarterly, sometimes every six months, sometimes annually. The ATO requires you to lodge pay runs via an accounting software, A.K.A Single Touch Payroll. 

If you don’t have accounting software, you will have trouble getting a loan for you and your business. You’ll also have problems with reporting and paying your employee’s wages, taxes and super correctly. Then you can get into a whole lot of trouble. 

The biggest problem is you make slow decisions for your business. This happens so often for businesses that don’t have their accounting software up to date. 

They just don’t know how to make a decision because they can’t decide, because they don’t know their numbers.

What are the alternatives to small business bookkeeping software

You know accounting software is surprisingly expensive and so you might wonder why can’t I just do this all in Microsoft Excel. Now the one thing about Excel is that it’s really easy to use; it’s fantastic, but there is a problem – it thinks in rows and it thinks in columns.

This makes it really easy to track income and expenses. Let’s say that we have some business transactions here, I could just hit an auto sum and that gives me a total of five thousand dollars net change over this period. But if I just have rows and columns, I’m not really keeping track of my assets and my liabilities; what do I have in stock and who do I owe money to. 

Those sorts of things are a domain of debits and credits in full-blown double entry accounting systems and excel doesn’t naturally do this very very well. 

There are also many online accounting software for small business options that you can look at.

Criteria for a Good Accounting Software

If you are looking at various business accounting software packages, this is a good criteria to use when choosing accounting packages for small business;

  • Price of Software – this is obvious, it does not have to be too expensive since you are running a small business.
  • Ease of Implementation – you do not want to choose software that is too hard to actually install and use within your business.
  • Ease of Use – find accounting software that is not too complex – easy accounting software for small business, which will defeat the purpose of having it in the first place. 
  • Software’s ability to fit the business – the software should be able to match the business sector or your industry.
  • Functionality of software – look at the various tools that come with the software – things like managing payroll, taxes, reports etc
  • Software works with existing hardware – choose software that readily is compatible with the computers that you are already using. Why choose software that will force you to buy new hardware and make the whole mission expensive.
  • Growth potential of software – if the vendors are still working on the software and constantly upgrading it, you have a winner.
  • Level of support provided by the software consultant – the vendors should be able to provide consultancy or have a help desk should you run into problems.
  • Quality of documentation – the software should come with enough documentation to make implementation seamless.
  • Developers track record of performance – you want to choose software from a reputable vendor with good reviews and ratings.

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