by Lauren Maffeo
Published on 31 January 2017
Owning your own business guarantees adventure. You get to chart your own course by bringing a new product to market; leading a team of A+ employees; and boasting more freedom than most people dream of.
If you already have your own business, you can start laughing now.
We both know how much tedium there is to being your own boss. And balancing the books falls into that category. "Accounting can be a very tedious, detail-oriented process where a missed period or misplaced number can have drastic consequences," says Capterra Product Research Specialist Cailey Gibson.
That's a big reason why small businesses shop for accounting software. Research has found that 77 percent of people who purchased accounting software were "Satisfied" or "Very Satisfied" with their choice to do so.
There's just one problem: even folks with accounting degrees can get confused when they shop for their first software. Which features matter most for your small business? Should you select on-premise or cloud-based accounting software? How will it work with the other software tools that you're already using?
To get some answers, we went straight to the best source: entrepreneurs who shared their accounting software tips for first-time small business buyers:
"With cloud-based accounting, you don't have to be in a specific physical location to access your figures or…an important document. You can handle all your accounting needs no matter where you are, which is very convenient.
"Another benefit is that a cloud-based accounting system is typically more secure than an on-premise system, because it's not subject to being lost, misplaced or destroyed in some type of catastrophe. Also, it's really convenient to be able to call up a cloud-based invoice if you ever have an issue with a client or vendor and send them the document online in just a few seconds."
- Tabitha Jean Naylor, Marketing Consultant and Founder of Successful Startup 101
"Choosing the software with the interface you feel most comfortable working with is crucial, as it will save you so much time in carrying out day-to-day tasks. To get a quick feel for the design and usability of the software, contact the service providers and request access to their demo account prior to signing up for a free trial.
"This will allow you to instantly evaluate what is on offer, without the arduous task of inputting all your financial data. More importantly, it will eradicate the inconvenience of signing up for multiple free trials and help you concentrate your purchase decision on the products you felt the strongest experience with."
- Brandon Ackroyd, Founder of Tiger Mobiles
"Hours billable, invoices, and taxes are the big three [features] when it comes to accounting software. It is important to find a software that seamlessly integrates all of these needs into easy-to-read reports.
"More importantly, anything you send out (invoices, tax information, etc.) should be in the proper format and easily understood by the recipient. Ensure that you see how the information is sent off before committing."
- Evan Harris, Co-founder of SD Equity Partners
Read more: How to Choose Tax Management Software
"The latest trend in accounting software is to have an ecosystem of added applications that connects with the main accounting software. These applications can help in numerous areas, such as managing customers (CRM), accounts payable, documents, and even filing 1099s.
"The ecosystem provides access to these added applications in an on-demand manner, so in effect, they can build systems based on unique needs. Taking all of that into account, I recommend finding a software that has a robust app ecosystem."
"After you've shopped around and decided on an accounting software, be sure to look out for promo codes. For example, many podcasts are sponsored by software programs (such as QuickBooks), and they might offer you a one-month free trial or a certain percentage off your purchase.
"This is a great way to try out the software program for a bit before purchasing it in full, and it's always nice to save a bit of money while you're at it!"
- Charlotte O'Hara, Owner of Charlotte O'Hara Consulting
Read more: Filter for accounting software with free trials on GetApp
"There are a lot of accounting tools out there, and the user - especially small business users - will have to reach out to the accounting software's customer service at some point.
"By knowing how the customer service process works, how timely the service is, and how friendly the staff is, your company can better understand how you will be supported in a time of need."
- Evan Harris, Co-Founder of SD Equity Partners
With those tips in mind, you should start building a shortlist of software to consider. GetApp's Category Leaders ranking of the top accounting applications is a strong starting point. This quarterly list is updated based on five data points to help readers find the strongest cloud-based software tools.
Here's what our sources - and other small business owners we asked - say about these apps:
"I use FreshBooks, which is an awesome cloud-based system. It's got a fantastic user interface, it's really easy to set up, and best of all for me, it's a snap to configure my bank accounts so that all my expenses import. Plus - and this is key - the tech support is amazing.
"They answer every question in a clear way that is easy to understand, and they don't make you feel stupid for asking the most basic questions. This is my money, right? So if I have to ask questions to get satisfaction that everything is secure, I want to be able to do that in a comforting environment and the folks at FreshBooks do that really well."
"A Xero customer for over 5 years due to simplicity and reliability of the product. During this period a number of key features have been introduced, but the intuitiveness of the software has not been compromised in the slightest. This is one of the fundamental reasons I have recommended the software to many small businesses in the hunt for a long-term online accounting solution.
"However, there is a major downside in that the lowest-priced subscription restricts you to a maximum of 5 sales invoices a month, [which is] inadequate for the vast majority of startups. This is likely to force most small businesses onto the standard package, which more than doubles the monthly expense."
- Brandon Ackroyd
"QuickBooks helps me keep track of money coming in and out of my business. It's an all in one easy-to-use place, and I'm always ready for tax time. QuickBooks connects to over 16,000 financial institutions to download and categorize my transactions. It also pulls in data from apps like PayPal and Square. I love it and would recommend this app to anyone thinking of starting a business."
- Zondra Wilson, Founder of Blu Skin Care
"We recently changed our small business bookkeeping and accounting software from a desktop-based QuickBooks to cloud-based Xero. My number one tip for fellow small business owners to consider when searching for their bookkeeping and accounting software solution is to make sure that the software will integrate and "talk" to your checking account and credit card account.
"This will make sure your books are constantly in sync and save you hours of mind-numbing data entry every month - which is the cause of most small business owners' dread for bookkeeping tasks. Having your data feeds all in sync with your accounting software can directly translate to a tighter business operation."
- Bryan Clayton, CEO of GreenPal