Accounting companies of all sizes need a robust system that can manage their finances. With accounting software, you can alleviate the time and effort of accountants or analysts. The excruciating part is locating and purchasing the perfect software for your business and team. We offer a guide and tips on how to make the decision-making process easier.
What is Accounting Software?
Accounting software is designed to assist accounting professionals and help businesses track and organize all their financial information. With this software, teams can restructure their procedures to better fit their employees like better tracking of company-related expenses. It can also help you gain real insight into spending, resources frequently needed, and profits.
The common features you will find in an accounting system center on specific needs for finance management and daily operations. These features can be as simple as tracking time for employees or more in-depth, such as reporting valuable financial information about the business. Other common features include
- Bookkeeping – using a general ledger (GL) for tracking daily transactions and purchase orders to ensure reliable records
- Cashflow – flexible payment methods and delivery
- Inventory management – maintaining the number and cost of items
- Expense management – ensuring business expenses are tracked and reimbursed for employees
- Financial reporting – such as balance sheets and important financial statements
- Time tracking – for payroll and project management
- Accounts payable management – for helping you manage your company’s service bills
- Automation – including templates, calculations, data entry, and auto populations of financial documents
The main benefits of business accounting software are expedited financial business processes and better organization of operations. It’s also a big advantage to have a system that can provide analysis and reporting based on all your financial metrics. You can get both a micro and macro view of your company; from there you can make predictions and grow exponentially.
When it comes to choosing cloud-based or on-premise accounting software, they each have their own clear advantages. For web-based programs, many are inexpensive, user-friendly, and have easy access to support. You also won’t need to maintain it or pay for hosting (but you will still need to ensure it’s properly used by your team).
An on-premise system is under your control and security. It does mean maintenance and management of the software are all your responsibility. Enterprise solutions may be better suited for private on-premise systems.
When you need to find the right accounting software for your business, it will take some thought and care. You have a sea of different software solutions and all of them have different capabilities. The best way to narrow it down is to ask the right questions.
Accounting Software Selection Guide
It’s not possible to offer you the exact software selection criteria that can meet the specific needs of your company. What you can do, though, is make sure to look internally and consider what fits your team the best. These are some common but helpful questions to ask before buying accounting software.
- What is Your Budget Range?
- What is Your Team’s Skill Set?
- What is Your Team’s Input?
- What Features Do You Require?
- How Will the Software Work with Future Planning?
- Does the Software Vendor Offer Resources?
- What is the Brand Reputation of the Company?
What is Your Budget Range?
The divide between the cost you want and the actual cost of most software is the hardest estimate because you’re wrestling with your expectations. You may want something to cost less than $100 a year, but the software market is the real decider.
It is very fortunate though that accounting solutions are incredibly affordable for small business owners. Small businesses can expect to pay around $200 to $500 a year, while enterprise software can be closer to $1000 or more. For some subscription price ranges of popular software, see the getting started section.
As you plan your accounting system budget, there are some helpful concepts to think about.
One is the overall expense of the software, especially if certain features cost more. If you build a price range with room for some of the more expensive software then it will be easier to get the best-fitting software for the team. That does not make the super-expensive options better because pricier doesn’t always mean better.
Another concern is how frequently the software will actually be used, whether it’s once weekly or every other day. It can be hard to justify spending hundreds of dollars on something you use every two weeks and conversely a pricier option can be worth it if you use it almost daily. A software that costs less or more depending on usage is rare for accounting software, but may be good to think about as well.
These may not be all the considerations for your specific needs, but they are universal ones that can help get the conversation started.
What is Your Team’s Skill Set?
If you want to find the best accounting solution you need to match it to your team’s skills and experience. There are a number of reasons why your team’s background can be a deciding factor, including accessibility and their overall ability to navigate applications.
If any of your employees are colorblind, photophobic, have low vision, or have any other needs, then you want a product with accessibility and customization options. Depending on the software you choose, there could be complications from not choosing intuitive software optimized for universal usability. For more education on web accessibility, see our super in-depth articles on the topic here.
It’s crucial to learn and evaluate your team before buying them just any software. Here are some team-related concepts to keep in mind when selecting an accounting solution.
Team Factors for the Decision-Making Process
The software application you choose should be accessible for people with disabilities like poor sight, astigmatism, deafness, and neurodivergence. Even something like color blindness may not worth taking into consideration when buying software but flexible color can mean a world of difference.
Your team technical skill level is a big concern to factor into decision-making. You will need to learn if your team is computer literate or has specific areas they struggle in. Navigating the user interface of a new system in general comes with learning curves. Choosing software with a simple UI could be what makes the biggest difference in productivity.
If your team is particularly tech-savvy, you can look into more complex subscriptions with a plethora of features. These teams might have a background in complex applications such as low code development, publishing, or Adobe suite software.
Performance reviews and past complaints about software are also helpful factors in decision-making. If your team consistently takes two months to get back in rhythm when learning new software, then you can predict future performance with your new accounting solution. It’s important to learn why it can take so long to adapt to a new product, but you can’t get carried away and push them into burnout because you want them to learn faster.
Taking in the needs displayed by your team can seem like extra work, but it helps you in the long run. If you pick software that’s too much to handle or offers too-simple functionality, your team’s productivity will likely suffer.
What is Your Team’s Input?
The next best thing for matching software to your team is asking them directly. The only problem with that is not everyone can immediately list all the exact capabilities they want; sometimes you have to develop those criteria together.
For the purpose of getting the ball rolling, this table covers popular and powerful features that might benefit your company.
Features Your Team May Want
Project tracking can be a great way to find out if your time is spending time on something that’s actually lucrative or not. This way you can nix projects that waste time and bring down your team with extra work.
Flexible time tracking offers teams a less rigid way to track hours without feeling micromanaged. If the software doesn’t have this feature it can easily be integrated with other time-tracking software. Some even have their own accounting features.
Diverse language options might be particularly helpful to your team and your business, but it’s unfortunately not a common feature. You can find it in Zoho Books.
Convenient payment capabilities are a must for teams that are remote or hybrid. It’s important they have plenty of options that can even fit income requirements per state as well as employee preferences.
Software with expense management with mileage tracking will be a lifesaver for employees that travel or often make purchases on the go. The last thing you want is to lose track of these expenses or miss expenses that should have been approved.
A solution with automation of simple tasks as well as easy-to-use templates can improve the speed and quality of your quotes and invoices.
Another great feature is mobile apps for Android and iOS. They are an awesome way to provide faster access for teams that spend a lot of time away from their computers.
You can get started on brainstorming with your team by watching tutorials of different accounting software solutions on YouTube.
What Features Do You Require?
The most frustrating part of knowing what you want in software is when you look at how much those features cost. It’s an annoying reality of software that the most desirable features usually cost extra.
This is not 100% true in every case, though! Free and open source software does exist in full packages, somewhere in the internet’s void (see the getting started section for software examples). With accounting software, you will find many that are reasonably priced even for their highest tiers. That unfortunately does not mean the features of each plan are equal.
When planning your capabilities checklist, keep in mind that certain functionality is almost always found in the more expensive tiers.
Accounting System Features That Make a Difference (In Your Wallet)
Something that can get particularly expensive is Artificial intelligence (AI) and machine learning (ML) for manual task automation, monitoring, and security. It can be a huge benefit for ensuring accuracy and improving workflow.
Project management or project tracking features are generally kept till the last or second to last most expensive tier. They can be used to help judge profitability and track costs for projects. You don’t absolutely need this because your team likely has their own project management software but the benefit of a tool tracking project costs can help you in the long run. If you want to cut expenses, reevaluate where you should allocate your time and anything else along those lines.
One thing that can be frustrating is the cost of users. You need to add users either way so rules and extra costs in that area can be a big con. The number of allowed users, clients, invoices, and bills can have caps for each tier. Caps are usually in increments of 5, which can be inconvenient when adding 1-2 users or even numbers. It’s definitely good to double-check user caps and the cost of adding users later on.
Automation features may have limited actions per tier. Sometimes they come with templates for certain documents or calculations. Your team can 100% benefit from automation, forms that get prefilled, and calculations to help avoid human error. The real question is whether it’s worth the extra money when it’s not a necessity in accounting software, it’s just a good advantage.
Customer support is almost always part of higher tiers or is priced as a separate add-on. This is true for all software subscriptions and it’s the same for accounting solutions. The need for minimal and extra support really depends on your team. You can look through reviews to get a feel for usability, and if anyone majorly benefited from paying extra for better support.
Many applications offer analytics features in their first tier, but advanced metrics are often limited to more costly tiers. Analytics dramatically affect decisions when spending on project campaigns or new recruits.
Some level of reporting is a big benefit and advanced reporting can definitely be worth the extra cost. Of course, if it’s not worth it if the cost of the software is way out of budget, then you’re better off looking elsewhere.
It’s strange to limit, yet common among most software, but exporting data is often limited or only offered in the higher subscription plans. Your reports on important numbers will be easier to utilize if you export them, so this may be a need that warrants upgrading tiers.
The best way to find out what capabilities tend to cost more is to look through several accounting software subscriptions. You will be able to see what’s available and consider which features are worth your budget.
How Will the Software Work with Future Planning?
This isn’t the first concern for most teams, but it’s worth asking if the software will be able to handle your future growth. This could mean having scalability and backup for over a year’s worth of client data.
It could also mean considering the cost of more team members years down the line, and preemptively looking for discounts for more users. You may not find growth business options and that’s fine but it’s worth considering now.
Accounting Software Features for Growing Businesses
User permission options can help when your company hierarchy grows more complex. Some people don’t need full access and just need viewing for performances or presentations.
Coming back to additional users, a good sign you can grow with software is how easy it is to add or get rid of users. It’s ideal if you can add people without spending too much and if you can take people off and see a difference in costs.
You may struggle to find a solution that fits you and also doesn’t do increments, but it may be worth the extra time to find. Zoho Books is an example of a product that does allow you to add individual users. Open source software would also eliminate this issue.
Scalability for all your data, statements and reports can be especially important if you have a large client base that is always growing. You want a system built to not just withstand but match your growth, with plenty of wiggle room. Keep an eye out for storage caps, as well.
You don’t have to limit your choices based on this if you don’t expect exponential growth in your team or client base, but it’s worth keeping in mind. Another great way to know if software vendors can help with growth is if they have dedicated resources to help you with implementation.
Does the Software Vendor Offer Implementation Resources?
Some of the best accounting software will provide your team with resources for implementation, like onboarding services and real-time customer support. Depending on your team, these resources could be invaluable.
The problem is that most customer support is limited in subscription tiers, especially in a free plan. Many vendors only offer support or onboarding as a separate add-on you buy at the time of purchase.
Resources Offered by the Best Accounting Software
Knowledge bases are usually free, giving businesses a self-service option that helps them use the software to its best ability. It’s a great resource but can’t help with incredibly specific problems. Community forums are another great way for end-users to ask questions or find answered questions and are almost always free.
Customer support in the form of email, live chat, or phone calling usually isn’t offered in the free tier. It’s important to check the support of the plan you want. If there’s a steep learning curve, you will certainly wish you had paid for a plan that includes support.
Setup services, whether cloud or on-premise, can be amazing for getting your team started, but they aren’t super common. It’s still worth asking about, though!
Onboarding and training are super effective ways to provide your team with the help they need to learn the software and cut down on time lost while learning. It’s unfortunate this isn’t always offered, but again it’s worth inquiring about for software you like.
Educational webinars and blogs are awesome resources for learning about new ways to use the software as well as relevant tax laws, or other business finance topics.
If you do find a great product for your team, but if there aren’t many available resources, don’t worry. You can most likely get by without them. It’s just important to ask for the best resources because you deserve to get your money’s worth.
Speaking of commitment, you need to be incredibly wary of any contract you sign because the company you sign that contract with might be a scummy, soul-sucking corporation. Well, more soul-sucking than most corporations.
What is the Brand Reputation of the Company?
The right accounting software that fits your business needs can be ruined in a finger snap if the software vendor is Marvel-villain levels of problematic.
An easily overlooked research criteria is finding out if the company has frequent customer complaints. Acquisitions by large companies can have complications and affect service quality—not all of them, but some. Not to mention contracts with similar stipulations to a blood pact will be less than beneficial to your team.
Ways to Avoid Bad Accounting Software Companies
The most effective way to judge a company is to research their background. Their mission statement may be enticing, but their customer issues, lawsuits, scandals, and acquisitions will say more about their service.
Reading through as many reviews as you can is a surefire way to cut through double-talk used to hide issues in the software. Even high-rated reviews can give you insight into common issues, bugs, and UI difficulties.
It may be obvious but you need to be careful to avoid getting overwhelmed during any consultations with their sales teams. Any pushiness or inability to answer questions about service can be a red flag.
Something of huge importance is going through the entire contract and terms of service (TOS). Not to be morbid, but it’s where the bodies are buried. Auto-renewals, privacy issues, and clauses that make it harder to cancel may never be mentioned during your consultation with their representatives.
You don’t need to be paranoid that every accounting software provider is a predatory company. Many are perfectly wonderful and provide great service. It’s just very important that you take your time and avoid putting in your effort for a service that ends up giving you more frustration than actual help.
How to Get Started
If you’re ready to start your search for a new software package to meet all your accounting needs, here are a few suggestions for where to begin. The first thing you will want to know is general costs, and instead of giving an estimated range, below is a table of specific plans for popular accounting software.
You should also check out some of our full-featured and very affordable software for small business owners. There are great enterprise-level software products and plans available as well, but they will be significantly more expensive.
Price Ranges for Accounting Software
As a whole, accounting software systems vary from expensive to very affordable. If you are a smaller company, then there are plenty of affordable options, but the more complex your needs, the more likely the service you need will cost thousands of dollars.
The table below shows a range, but each plan listed is the product’s most expensive tier. This way you can get the bad news before the good news and consider the highest costs first.
|Freshbooks Premium plan
|$27.50/mo ($55 when not on sale)
|Xero Establish plan
|Intuit Quickbooks Advanced plan
|Zoho Books Ultimate plan
|$240/mo billed annually
|Quickbooks Desktop Enterprise Diamond plan
|$3780/yr (billed month to month)
Something that could help your search is actively ranking potential software on a shortlist and brainstorming those rankings with your team. There are a number of online applications for tier lists, or you could use your own project management tools.
Popular Accounting Software
If you’re a small team and want to get started on the right foot, then these platforms are a great way to start. They all have diverse plan costs and starter tiers that are less than $50 or even cost nothing.
|Quickbooks Online (Intuit Quickbooks)
|$0 for their Free plan
|$0 for Accounting package
|$12 for their Early plan
|$30 for their Simple Start plan
|See their pricing page here.
|See their pricing page here.
|See their pricing page here.
|See their pricing page here.
Zoho is an absolute powerhouse when it comes to offering a suite of business software tools with their products. For the majority of their services, they provide a free plan for small teams, and that is no different when it comes to Zoho Books.
They have a wide range of tiers, all billed annually per organization rather than per user. There are user caps on each plan but you can add additional users for $2.50/mo billed annually. In terms of functionality, they are extremely feature-rich, offering automation features and diverse monitoring and reporting capabilities.
If you’re looking for a fluid user experience, you should know the Zoho platform has a reputation for a steep learning curve. Tech-savvy teams that will be less overwhelmed by their extensive tools are the best users for Zoho’s software.
The Wave Accounting software packages are rare and refreshing compared to most accounting business software because they provide several services completely free of charge. They are cloud-based and require only an internet connection. You can even access them using their mobile apps for iOS and Android.
Instead of offering plans inside a subscription, they offer each service as its own subscription. Their accounting, invoicing, and banking subscriptions are all offered separately and for free. Services that do cost money include payroll, payments, and advisors for support.
The features in their accounting package are basic. The package comes with an analytics dashboard, unlimited users and collaborators, as well as unlimited connected credit cards or bank accounts for payments. Reporting capabilities offer details on past due bills, profit, and losses.
The downside to free subscriptions is they often are not designed for major enterprises with complex teams. They also rarely offer any type of customer support. Wave does provide a self-service knowledge base you can find here.
Xero is a web platform offering 3 affordable plans for freelancers, independent consultants, individuals, and small businesses. Their starting plan, Early, provides 24/7 online support right off the bat.
Some of their capabilities include invoicing, bill payment tracking, and cash flow analytics. They do have limits in their software functions, like different caps on invoicing and bills for each plan. If you prefer an option with fewer limits, you would want their Established plan for $65 per organization per month.
When it comes to Quickbooks Online (also called Intuit Quickbooks) is one of the best accounting software products for small businesses. If you’re looking for their enterprise solution, you can find that here.
Their cloud-based solution provides a variety of plans for small companies and even has an alternative subscription for independent freelancers called Self-Employed at $15/mo. The Self-Employed plan is less business-focused and better for individuals that want to be able to properly pay income taxes.
General features of Quickbooks Online plans include cash flow, income, payments, invoicing, and simple reporting. Their more in-depth reports have personalized dashboards with financial metrics to track performance, but they are only offered in their Advanced plan for $200/mo.
All plans have access to customer support, mobile apps, and integrations. You can also get bookkeeping support from certified experts, but the service cost is not disclosed upfront.
When there are so many options to choose from, even with transparent features and costs, making a decision can still take longer than expected. You may also be interested in seeing more software categories related to accounting to broaden your search.
If you’re excited to look through accounting software we have a list of multiple options with user-provided feedback here. For related software to accounting, you can see this list of similar categories or look at the recommended software types below. You may also find our article on invoicing software a great resource as well.
- Accounts receivable software
- Financial close software
- Nonprofit accounting software
- Grant management software
- Budgeting and forecasting software
- Time tracking software
- Enterprise management planning software
For those that have used any of the platforms discussed here, please leave a review to help other buyers make informed decisions.
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