Invoicing & accounts made easy.

How to know which Accounting Software is best for Small Businesses

Never make the mistake of delaying Accounting tasks, even if you have just started your business. Accounting is not about preparing financial statements that one presents to the tax department. In fact, it is about tracking your finances in real time so that you may never take an uninformed decision. If you do not keep a transparent record of all your transactions, even for your small business from day one, you might have to pay a hefty price later on, either in terms of unforeseen losses or paying extra fees to an expert in fixing the mess which could have been prevented in the first place. Now, you may feel uncertain about hiring a full-time accountant for your small business with limited revenues and workforce. Well, you do not have to at the initial stage – though eventually you would require a professional advisor no matter what – with an accounting software for small business.

accounting software for small business

Now how would you know which accounting software is best suited to your small business requirements. We will tell you how.

Neatness and Accessibility: An ideal accounting software for small business must be easy to grasp with a clear-cut design and a user-friendly interface. Of course, you would have to have the basic knowledge of accounting. But you should be able to handle the software with ease with just a day’s worth of training. In other words, if an accounting tool makes you feel dumb and lost, it is probably not the right fit for you.

Time-efficiency: Apart from making you self-reliant a small business accounting software must be able to expedite tasks. Why do you think handling accounting on spreadsheets is a bad move? Because, firstly, it requires special expertise and secondly, it is mostly manual. The ideal accounting tool should have the right built and all the mechanisms to automate tasks. An ideal tool must have

  • Ready-made accounting templates consisting of all the fields
  • Data lookup option to select and enter Items and Names from an existing data base
  • Quick Business and Customer/Product setup
  • Option to produce Quick Invoice, Credit Notes and automate Recurring Invoices
  • A Chart of Journals that gets auto updated every time a transaction is recorded against a nominal code
  • Auto update of stocks based on preparation of Sales/Purchase Invoice
  • Direct connection to Bank Feeds through import or the likes to manage Receipts and Payments directly on bank statements instead of having to record them separately.
  • These are just a few examples. However, to test the eligibility of a tool in terms of its promptness and usability, you must acquire a first-hand and complete experience of the software.

    Suitable Feature Base: A business that is into providing intellectual/professional services might need an option for recording time-billable projects and automating invoices based on that data. A retail store on the other hand might require a Sales Pipeline/Sales Analysis option integrated with an accounting software. Thus, it is imperative to opt for a small business accounting software having features in accordance to the nature of your business. An accounting tool for small business might have features that are irrelevant to your business. In that case you must be able to choose the features you require and pay for only those.

    Supports Collaboration: The IT sector has seen a big spike in the acquisition of collaborative tools during the pandemic. From this vantage point a cloud-based accounting software is more efficient as it provides greater freedom in managing accounting. You can collaborate with advisors or team members and get faster resolutions to problems, record an update in real time using any device, be free of the worries of software maintenance and most importantly, settle all tasks, from bookkeeping to auditing, online.

    Data Security: Beside being cloud-compatible an accounting software for small business should also warrant 100% data security. Here are some things to look for:

  • User access control
  • Audit Trail reporting in case you add multiple users to your business
  • Lock in dates beyond which a user cannot edit financial records
  • And most importantly, the viability of the data centre in which your data is hosted
  • Scalability: Last but not the least, you may set up and maintain your small business accounting on your own with a simple, user-friendly, and smart solution. However, assuming your business will expand, the accounting tool must cover all the pro/enterprise features to accommodate and handle increasing financial complexities, to which you may upgrade promptly whenever necessary.