Are you an SME having trouble with accounting? Try these accounting software.
Accounting is a vital part of running any business. Whether you’re a large company or an SME, you’ll need some form of accountant or accounting software.
Without proper accounting, it’s very easy for your company to run into financial trouble. Even if your company appears to be doing good business, without keeping a careful eye on your cash flow and debtors, your company may end up in danger of going bankrupt.
The difference between large companies and SMEs is that they have different needs for accounting which require different solutions.
Large companies can easily hire reputable accounting firms to take care of their bookkeeping. They can also afford to pay for tailor-made accounting systems that suit their operations. It takes a great deal of investment and know-how to get an integrated accounting system for your company. As such, SMEs usually don’t have access to the same accounting solutions that large companies use.
SMEs often face difficulties in divesting their budget towards accounting needs. Integrated accounting solutions can be too expensive while hiring accountants can also be difficult at times because the accountant needs to understand the operations of the SME in order to provide effective bookkeeping.
A lack of know-how and a lack of funds can be a serious challenge to SMEs when it comes to accounting. When it comes to the financial bookkeeping, it’s important to keep track of various vital aspects such as taxation on each transaction, your inventory, your payroll, and the amount of money you are currently owned and from which debtors – just to name a few. A possible solution to this is accounting software which can help circumvent the lack of a proper accounting expert.
In this article, we’ll be going through the best affordable accounting software. Take a look at the list and choose one that fits your needs as an SME.
Excel is the most basic form of accounting software possible.
It could potentially be used to fulfil your companies accounting software needs, but it requires a great deal of accounting and software know-how in order to use it effectively for your business.
The problem with Excel is that it lacks most of the useful features that you would want from good accounting software. Equations must be entered manually, information for any charts must be selected manually, and Excel does not automatically create financial reports with your data either.
One should only resort to using Excel as accounting software for their business if there is someone extremely well versed in accounting and using Excel for accounting purposes at the helm.
Otherwise, Excel lacks the functionality and user-friendliness to provide your business with the necessary information that is needed to fulfil the purpose of accounting in first place. Tax planning is also much harder than it needs to be due to Excel’s lack of an automatic categorization feature.
The purpose of accounting is to track the cash flow of your business. This requires you to be able to see Profit and Loss as well as keep track of costs and debtors. Excel does not automatically do this for its user. As such, it’s usually better for an SME lacking in accounting know-how to look towards other accounting software options.
The only thing better than good, cheap accounting software is good, free accounting software.
Wave is a free financial management/account software platform designed particularly for small businesses.
The wave comes with a huge range of features. All of which is terrific to help keep track of your accounts.
First of all, the software is cloud-based which means that your data is backed up and you can access it from any computer at any time.
Secondly, it can be connected and synced with your bank accounts. Transactions automatically appear in your bookkeeping so you don’t need to key them in manually.
Besides it’s accounting functionality, Wave also has an invoicing feature. The invoicing feature allows you to create and send invoices which integrate seamlessly with the accounting part of the software. The accounting software tracks invoices which are sent out and if/when they are fulfilled and paid.
All of this is then automatically compiled into financial reports so you can easily see how your business is doing. Even if no one in your company has specialised accounting knowledge, the various features in Wave can help you keep track of the vital information that will tell you how your business is doing.
It’s free, and it’s comprehensive. Even if you have little knowledge of accounting and finance, using Wave and integrating it with your business can even teach you more about your companies cash flow and how to make your business more efficient.
Another immensely popular and useful piece of accounting software.
Xero is slightly more expensive than Wave. Well, technically infinitely more due to the fact that Wave is free. That doesn’t that you should automatically dismiss all other software. With a 30 free trial available and price plans that start at just $20 (USD) a month, Xero is still a very reasonably priced piece of accounting software and provides some extra functionality that you may want to make use of.
Like any good accounting software, Xero covers all the same bases that Wave does. It includes standard features such as cloud access, invoices, connecting to bank accounts, and financial reporting. Xero’s reports are customizable and even comes with an inventory feature. The inventory feature allows you to track your company’s inventory as items are added and subtracted through invoices. Wave lacks this feature. This will come in particularly useful if your company deals with sales, retail or F&B.
Another great thing about Xero is its capacity for multiple users. Xero allows you to invite multiple people within your business to collaborate on your accounts without the need to purchase multiple licenses. This makes it great for SMEs that have larger work forces.
Perhaps the best thing about Xero is its ability to integrate. Xero can be synced with hundreds of other apps to make running a small business much easier. A great example is its compatibility with POS systems such as Vend, allowing information about sales and orders can be sent directly between each app. This will give your business transactions transparency and make it much easier to manage your cash flow.
Another effective and affordable accounting solution. Quickbooks also offers a 30-day free trial but costs less per month. You can currently buy Quickbooks for as low as $10 per month for the first 6 months of usage.
Quickbooks is a simple yet highly effective app. It offers all the same functionality as Wave: Cloud Accounting, Tax Planning, Invoicing, Reports, Cash flow management and integration with external apps.
It does come with an additional feature which is very useful for some business. Quickbooks allows you to create separate, customizable user accounts for a single business. For example, you can invite an accountant or another staff member to collaborate on your business, but you can choose which transactions and data report that the person has access to. In wave’s case, there is only a singular account that can be logged into which displays the entirety of your business.
Many small businesses recommend Quickbooks. Consider it as a slightly more advanced alternative to Wave and a slightly cheaper alternative to Xero.
Good bookkeeping is essential to success in business. SME owners are more likely to have to take a hands-on approach to the finances of their business.
Hiring specialised teams to take care of accounting for your business is usually not an option for SMEs. So the accounting software on this list will prove very helpful in providing a cost-effective, user-friendly solution for your finances.
The importance of good bookkeeping should be obvious to all business owners. It’s important to have a clear understanding of your cash flow status in order to sustain steady profits and growth for your business.
Besides that, you’ll need to have your financial statements in order when it comes to dealing with authorities like the IRAS or when applying for bank loans.
Banks will take careful note of things such as your company’s cash balance and debtor age. Not having your accounts in order can severely jeopardize your likelihood of receiving a much-needed loan.
On the other hand, you could bypass the usual process of applying for a bank loan and try applying for a quick loan at FS Bolt instead.
FS Bolt is a simple and quick online loan application platform which allows you to apply for a loan of up to $50,000 with minimal documentation. Approval is made within 2 hours and funds will be disbursed within 24 hours.