As a business owner, is doing accounting and paperwork your favourite way to spend time at the office? Didn’t think so. But the right financial tools can save you time, money and frustration. Your accounting software helps you get the job done quickly and efficiently, whether you’re at your desk or on your phone.
Accounting software for your small business
What is accounting software?
Accounting is the language of business. And numbers tell the truth about a small business’s performance. Accounting software does a lot more than bookkeeping. It gives you insight to make important decisions. It keeps track of your business and pinpoints problems. Read on to find out which accounting software is best for your business.
Accounting software is powerful. More than ever, it helps you do more with less work and knowledge. It shows you how you’re doing and where you’re spending your money. The right accounting software should fit your budget and needs. It should help you:
- Handle bookkeeping tasks.
- Organize receipts.
- Pay bills from suppliers and pay your employees.
- Track sales and calculate sales taxes.
- Generate invoices.
- Gather information for tax returns.
- Track time, mileage and other business expenses.
Small business accounting software comes with different features. More sophisticated products include payroll, inventory, analytics and other modules.
Here are some tips to help you maximize your accounting tasks and software use:
- Use the right accounting software: Your needs should determine the right software for you. If your small business is a two-partner operation, avoid software that targets larger incorporated businesses. More on that later.
- Get organized: Keep accurate records of expenses and enter sales and expenses into software as they occur. Track performance and automate tasks like invoicing.
- Build accounting into your business: That way, you’ll have the numbers you need to make decisions at your fingertips. Also, tax prep will be much easier.
- Keep track of mileage: Some software lets you track your business drives on your smartphone and export location data.
- Stay on top of tax payments: Accounting software automatically calculates taxes and helps you make sales tax payments on time.
If working with numbers isn’t your idea of fun, seek help from a professional accountant or bookkeeper. If you prefer to do at least part of the work, ask your accountant which software they recommend.
How to choose the right accounting software for your business?
Your accounting needs might be simple or complex. It depends on the type and size of the business. Most accounting software for small business is available as an online subscription service. See PC Magazine’s list of top accounting software or financesonline for detailed reviews. They cover a full range of software options, from affordable or free options for freelancers to robust packages for larger incorporated SMEs.
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The Business Development Bank of Canada’s list of accounting software includes free options and made-in-Canada products that offer French versions.
Here are a few needs scenarios and accounting software choices to consider for small businesses in Canada:
- Basic needs: If you run a small business as a freelancer and your income is modest, a simple Excel spreadsheet can easily handle your expenses and income. If you don’t need to collect sales tax or generate a lot of invoices, consider accounting software like Wave or Momenteo. Both offer basic free versions.
- Average needs: Self-employed professionals and small businesses with more customers, revenue and employees may need software to handle invoicing, payroll and payments. QuickBooks Online and Freshbooks are top choices for smaller businesses.
- Advanced needs: Incorporated businesses of all sizes use double entry bookkeeping. Most current accounting software includes that feature. You may need more robust software if you have more employees. Quickbooks and Sage50cloud offer scalable solutions for larger businesses. They also offer scalable feature sets at different price levels. Xero is another choice praised for its user-friendly interface and cloud-centric mobile options. However, it doesn’t offer payroll features, except through third-party apps.
What is the best accounting software for small business?
There are plenty of options available, such as QuickBooks, FreshBooks and Zoho. As mentioned above, to drill down into features and comparisons, head over to PC Magazine and financesonline for detailed reviews. You can download a free trial version to try before you buy.
QuickBooks is a household name in business accounting software and is a popular choice for a wide range of needs. Its leader status and vast feature set also come with a higher price tag though.
On the other hand, QuickBooks’ secret sauce is its integration with TurboTax, the leading tax preparation software. Intuit makes both products. This integration lets you transfer your numbers seamlessly with a couple of clicks at tax time. It also eliminates the need to retype numbers and prevents human error.
Sage50cloud is a solid advanced choice with tiered versions for larger small businesses. New integration with Office 365 targets businesses with more sophisticated needs. On the other hand, it lacks the flexibility and mobile app features that Quickbooks and Xero offer. Zoho Books is a more affordable option for small businesses.
For freelancers and the self-employed, Freshbooks is a popular choice because of its ease of use and simple interface. Freshbooks and Wave are two choices that offres a free version for those who have basic needs.
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Business Insights and Ideas does not constitute professional tax or financial advice. You should contact your own tax or financial professional to discuss your situation.
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