An Overview of the Top Accounting Systems for Entrepreneurs

A laptop showing financial data representing accounting software for businesses

If you ask an entrepreneur how much time they want to spend managing the accounting activities of their business, they will usually say as little as possible. Business leaders and entrepreneurs would generally prefer to spend their time growing their business and making money rather than tracking finances and managing administrative tasks. However, if you ask these same entrepreneurs how important it is to have good and accurate management system for their company’s accounting information in place, they will say that it’s very important.

The next logical question then, is what is the best accounting system to use? The reply is, unfortunately, “it depends”. The reason for this is that every business is different and therefore the accounting needs will also be different. The best solution is to seek advice from an accounting firm that provides consulting services to small to medium sized businesses, such as Edelkoort Smethurst Schein CPAs LLP. As financial professionals, we have experience with a wide range of corporate accounting software and can guide clients to which ones will work best for their particular needs.

What Should a Good Accounting Software Program Do?

At its core, bookkeeping is the recording of transactions associated with and required for full and accurate financial accounting. This means keeping track of business income and expenses, so you have a realistic idea of how much money is flowing in and out of your business at any given time. Bookkeeping includes activities like logging income, tallying expenses, calculating payroll costs, determining fixed and variable costs, and tracking other business income developments.

The key to bookkeeping is organization and accuracy. You need to have all of your financial information organized in one place, and it needs to be accurate down to the cent. This will give you the opportunity to create accurate, usable books to report to stakeholders and for income tax purposes.

While there are accounting systems specifically intended for small businesses, the nature of bookkeeping has remained the same for hundreds of years. Whether through an automated system or by hand, typical bookkeeping activities include managing and tracking the following:

  • Records of sale of your good or service
  • Receipts from customers
  • Invoices from suppliers
  • Employee payroll and governmental reporting
  • Individual accounts receivable
  • Depreciation and other adjusting entries

 

As a small or medium-sized business owner, you have several options for managing your company’s accounting. You can select a software-based solution that you manage yourself, work with an accountant who directly oversees your business finances on your behalf, or some combination of the two.

The right accounting firm will have good working knowledge of the main accounting products that are offered to small businesses and be able to help you make the decision of which option would work best for you.

An Overview of Current Top Accounting Programs for Businesses

For those business owners who are considering the purchase of accounting software (or who may be looking to switch from their existing system), below we’ve provided a brief introduction to the main accounting systems in use today, in alphabetical order:

  • Bonzai – a very good tool for relatively young small businesses that do not need to invest in expensive bookkeeping software. It allows for a seamless integration with your website, allowing you to create different packages on your site and tying it directly with your bookkeeping software in the back end. It also has an iPhone app so you can access your financial documents from anywhere.
  • FreshBooks – this is a very good cloud-based accounting software for small businesses that is also affordable. This is ideal for businesses that are just starting out. You can send invoices, track time, accept credit cards, and manage receipts and expenses. It’s also very user-friendly, and since it’s cloud-based, you can access it on the go.
  • QuickBooks – a tried and true solution, and the easiest to scale. If you want to pass information onto your accountant, it’s very likely that your accountant will likely be familiar with Quickbooks and commonly using it for other clients.
  • QuickBooks Online – this version of the software has multiple ‘apps’ that can be bolted on to the main software, and it allows owners to customize the software to their needs and these integrations can be installed very easily.
  • Sage50Cloud – another great online accounting solution for small businesses and it’s easy to use. It has some additional features such as HR, payroll and credit card processing.
  • Wave – this system has very capable free versions as well as paid versions. Wave imports all of a company’s financial data automatically which can make accounting much faster and easier.
  • Xero – a relatively new system developed in 2006 in New Zealand that has gained a considerable reputation for making accounting slick and enjoyable; it also offers a cloud version.

 

If you are a business owner or oversee the accounting tasks for a business and you need advice on which accounting system would most benefit you and the way your company operates, the Chartered Professional Accountants at Edelkoort Smethurst Schein CPAs LLP can be of assistance. Their consulting expertise will help you make the best decision for your business. Reach out to us today by calling 905-517-2297 or contact us online.