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The Best Accounting Software for Small Businesses

Sarah Badani
accounting software
The vendor you expected to show up yesterday still hasn’t arrived, and it’s noontime. Meanwhile, there’s a line of customers waiting for their orders to go out, your main worker called in sick, and yeah, the cat just pounced on your laptop and deleted a major client from your database.

It’s one of those days again, and if you’re a small business owner, chances are, it’s like this nearly every day. As an ambitious entrepreneur, there are simply not enough hours in a single day to do everything you need to get done. But there’s one task that simply takes the cake. The ultimate time-sucker, the job you and everyone around you dreads, the bane of your existence. That’s right; we’re talking about accounting. From simple bookkeeping (inputting all those numbers, transactions, and plus and minus signs) to more complex tax compliance, end of the year filing, and, gulp, reconciliations, accounting is just about the worst job for any small business owner on the planet.

Even worse than that, accounting is complicated. Even if you are good at numbers (were your eyelids even open in high school math class?!), all the intricacies, the rules, the regulations, the transactions are enough to make anyone’s head spin. And even worse than THAT, accounting has some heavy ramifications. A misentered digit, a misplaced period, and you could be looking at some serious fines, if not more detrimental results of poor tax compliance. 

So, why do small businesses need accounting software? The more accurate question is, how can you expect to survive in the business world without it?! Good accounting software ensures that all of your books are handled reliably, all taxes are dealt with properly, and to the letter of the ever-changing legal law, and that all accounts are in sync to eliminate any discrepancies. Here are a few all-important tasks that your typical accounting software will handle for you, so you don’t have to lose the little sleep you are getting over the nitty-gritty details:

  • Accurate data entry

One of the biggest, scariest, and most costly areas where businesses frequently make mistakes is in the realm of taxes and bookkeeping. All it takes is a single zero to be in the wrong place, just one period to be mismarked, and you could end up with catastrophic results. Fortunately, with a digitized process, accounting software does away with all of that headache. Double-entry technology ensures that all data is entered accurately. And then all calculations are made to perfection.

That’s definitely the most crucial element of accounting software for small businesses, especially considering the fact that SMBs can’t afford to pay hefty fines or wrangle in court for months. Other important accounting tasks and advantages include:

  • Data export
  • Data security
  • It keeps you up to date on your company’s financial health at a glance
  • It makes collaboration easier
  • Insights and analytics

And with most small business accounting software coming in cloud-based versions these days, there’s every reason to enlist the aid of this easy access tool. You can review reports, update entries, check on critical information, and do just about anything accounting-related directly on your mobile device and from anywhere in the world. 

What Features to Look For in an Accounting Software for Your Small Business

Accounting software comes in all shapes and sizes, and features can range from incredibly simple to incredibly complex. The real question is, which tools are necessary and important for your business success? After all, there’s no reason to pay for tinted windows if you live in England, right? Here are a few of the essential accounting software features that no SMB should live without:

  • Tax compliance 
  • Reports and analytics 
  • Scalability 
  • Good customer support

If you’re able to splurge for more extensive features, good things to look for include:

  • Inventory management
  • Sales tracking
  • Customer management system
  • Budgeting
  • Estimates, billing, and invoicing 

The Top Picks for SMB Accounting Software in 2021

Ready to get those books in order and take a huge load off your shoulders? Then check out 3 of the top-rated business accounting software packages that are particularly well-suited for small businesses:

Quickbooks

Pros: 

  • One of the easiest dashboards to use
  • Great features like project profitability and customizable reports
  • Loads of add-ons and integrations 

Cons:

  • Can get a bit pricey
  • Support hold time can be long

QuickBooks by Intuit is easily the most recognizable name in online accounting software. Offering a wellspring of functionality and comprehensive features tool kits, QuickBooks wasn’t always the best solution for small businesses. But, recently, the service has tweaked its offerings so that SMBs can thrive using this smart and all-inclusive software. Today, QuickBooks is one of the most widely-used accounting software packages for large and small businesses alike. 

Features you’re sure to love include its project profitability calculator, snap and store receipts tool, deep business insights, and live bookkeepers on call. QuickBooks is available for tax reconciliation and preparation, managing 1099 contractors, sales tracking, calculating sales taxes, and maximizing tax deductions. QuickBooks also has payroll services, the ability to accept all types of payments, and inventory management all bundled into convenient monthly plans.

KPMG Spark

Pros: 

  • Dedicated account manager to work with
  • Syncs with your bank accounts
  • Everything is easily customizable 

Cons:

  • No dedicated mobile app
  • No free trial

KPMG Spark is an online bookkeeping service that is geared toward saving your business time, money, and hassle. The services include tax preparation, invoicing, and expense tracking. You can also run payroll directly from the KPMG Spark platform, send out invoices, and collect payments online. KPMG Spark lets you accept credit card payments from all the major card companies and gives you access to a comprehensive accounting dashboard. The dash is updated in real-time. So you receive live data about your income and expenses, can check up on your account balances, and make on-the-spot reconciliations. 

KPMG Spark provides easy onboarding to its online platform and connects directly with your bank accounts for seamless and error-free accounting too. KPMG Spark assigns each client a dedicated accounting point person. So, if you ever have questions, there is someone to talk to who knows your specific business situation and finances. This means all the solutions are tailored to fit your needs perfectly. 

FreshBooks

Pros: 

  • In-depth accounting reports
  • Ready-made, customizable invoices
  • Track expenses and bills, link to invoices

Cons:

  • No accounts payable feature yet
  • Limited users and feature set

FreshBooks has one goal in mind: to empower small business owners by giving them the tools they need to successfully and confidently navigate the complex accounting world. Cloud-based FreshBooks accounting gives you tons of functionality from the press of a button (and from any device). FreshBooks also helps you calculate expenses for each project individually. You can send out professional invoices and link time tracking to be included in the bill. Customers can pay you directly online as well, which makes for a faster payment turnaround. Use one of FreshBooks’ prefab invoice templates, and customize it to fit your business image.

Known for its dedication to security, FreshBooks is a great option if you want to ensure all of your sensitive business data is stored and transferred securely. What’s more, FreshBooks will take care of all your tax calculations. Using a smart double-entry accounting software package, FreshBooks shows you important business metrics at a glance. It includes detailed reports for you to peruse so you can get a 360-degree view of your company’s finances. And since the software is doing the calculations, you can rest assured that your books will be in line when it comes time for taxes.

Sarah Badani
Sarah Badani writes for top10.com and has extensive research and review experience in the finance industry. With a degree in psychology and education, she brings a level of depth and understanding to her writing along with her own flavor to spice up each topic in a unique and inviting way.