Picking the Best Accounting Software Online for Small Businesses

Running a business is no easy task in today’s economic climate. Business owners need all the help they can get and finding the right accounting solutions can ensure compliance, make your life easier and save your business time and money.

Whether you want to study accounting, are a practising accountant or run your own small business, there will be a software solution to streamline your bookkeeping and we are here to help you browse and select the options that might be right for you.

The Benefits of Smart Online Accounting

Why would anyone want online accounting software? The answers might be obvious to some, but let’s look at what accounting software can do for businesses.

Security

For those who are a bit old school, the idea of having your confidential business information stored online can be scary. The good news, cloud accounting software is one of the safest places for your data and generally they do back-ups each hour. They also make use of the latest security software and it’s much safer than storing data on desktops. Most programs offer a two-step authentication process to ensure logins are secure and you can adjust permissions and access to specific users.

Anywhere Access to your Books

The right online accounting software means you don’t have to wait till the end of the month to instruct an accountant or outsource certain functions. Take invoicing as an example, a sales person or one-man business can immediately create a quote or invoice after a meeting, regardless of whether they met at the office or a coffee shop.

Find some bookkeeping courses on Superprof.

Real-Time Financial Reporting

The business owner or managers can log-in at any stage and get a real-time snapshot of the financial health of the business. This means you’ll know what accounts are payable and the current running expenses for your business. You can view and manage your cash flow better and do financial reporting on the spot.

Automated integration

Most systems have the double entry accounting principle built into them, so you won’t have to record transactions more than once. Your system will automatically calculate and collate things like expenses to give you totals whenever you need them.

Most online accounting service providers cater for small businesses and provide a free trial.

Comprehensive Record-Keeping

Stay government and industry compliant. Keeping records and storing them in the right manner is easier with an online system. You will also be able to easily find records or transactions from years ago, something that’s really handy when you get audited on your company tax or VAT.

Reduction of Human Error

Digital programs can be useful in reducing the errors that people can make. The system can link bank information to entries made and pull data without relying on humans to capture huge amounts of numbers. ‘Required fields’ will ensure that data capturing are completed in specific set sections before the system accepts the entry, which allows steps for due-diligence when it comes to data entry compliance.

Cost-Saving

If you do the math, you’ll see that getting the right software can reduce your monthly accounting bills as you'll need less full-time staff. There will still be the need for someone with sound financial knowledge in most organisations and for the smaller ones outsourcing becomes an easy option, especially if they can capture and manage their finances with a good digital system.

Choosing The Best Accounting Software

Having a good understanding of finances and the financial process is almost a requirement if you want to choose the right software. Students will learn about different software options before they complete their final exams to become a recognised Accountant.

Private Accounting lessons or short courses can help to build your knowledge in accounting specialist areas, and don’t forget to speak to experienced accountants or small business owners for their advice on the systems they use.

Most software solutions will offer features around the following accounting functions:

• Accounts payable
• Accounts receivable
• Invoicing / Billing
• Budgeting and Forecasting
• Financial Reporting
• Bank Reconciliation
• Tax Management
• Inventory Management
• Expense Tracking
• General Ledger

Luckily, the competition is fierce in the accounting software market and you will have no shortage when it comes to options to choose from.

It’s important to compare the various options and choose one that offers the features, integrations and capabilities that would serve your business best. It makes sense for bigger businesses to go for a corporate package with thousands of users, unlimited quotes and invoices and massive storage capability, but less so for a small business.

Be sure you understand and check whether the new software offers you the required compliance, tracking and reporting. With cloud and online accounting software you generally need a reliable internet connection, but it’s also better to be certain about the hardware and technical requirements before committing to one.

Choose reliable accounting software with solid basic features instead of an unknown supplier with thousands of free add-ons.

Small businesses generally gain from systems that help them capture their expenses, do payroll and invoice clients. The various functions, like payroll, are generally an add-on additional feature to many packages, so you can choose a core accounting package that suits your pocket and add-on the additional services you need.

Be sure you check the support they offer and their terms and conditions when it comes to cancelling the contract. It might be obvious, but be sure you can access and download your financial information once you cancel your subscription as businesses are required by law to keep financial records.

Did you know that SARS (South African Revenue Service) requires that you keep proof of business expenses, like cash slips, for 5 years?

Some of The Best Cloud Accounting

Like most software and apps in the market, the online accounting packages that will suit your business best depends on your company needs. We’ve made a list of some of the popular ones in South Africa:

Sage

Sage is probably one of the most well-known systems in the country and offers the entire range of accounting services. Cost is done per amount of users and if you are a freelancer you can expect to pay around R160 per month. Sage's standard Plus package with payroll goes around R 3,300 per year including VAT. All Sage packages come with income and expense tracking, quote generation, invoicing, online payments and integration with bank accounts. Sage is great value for money, but unfortunately you’ll have to commit for a year as they only offer annual contracts.

Xero

An internationally known name in the space, Xero is a bit more costly and has slightly more features. The downside is that the smaller Xero packages offer limits to the number of quotes and invoices you can send. Xero is highly innovative and connections with over 800 other apps will allow you to capture and add financial information on the run.

FreshBooks

Cost-effective, but unfortunately the FreshBooks stater packages have a limit on the number of clients you can invoice. The Premium FreshBooks plan comes at R280 per month, but allows full access to all features it could be great value for money for a small business. The Time-tracker on FreshBooks is a great feature that allows you to track the time spent on a client, which creates more transparency for all parties.

Intuit Quickbooks

Probably the best online tax software in the market with bank level security and encryption. They generally offer the same features as the other programs, but the limitations on the number of users can be a frustration for some businesses.

Zoho

Zoho offers great integration with other business functions like sales and marketing. You can add-on apps to your plans, and they are focussed on creating data-driven reporting and decision-making.

If you are starting out and require something basic, you can also consider the free accounting resources and software as offered by names like FNB and WAVE Accounting. You get what you pay for and the free ones generally have less support and less of a flow in its functionality.

Take exceptional online accounting courses on Superprof.

Other Online Resources

There’s a range of online resources that you can to streamline technology and management around your business. Whether you choose to go with cloud computing or break up services will depend on a wide variety of factors within your organisation.

Here are some plug-in resources or options to consider”

• Sales Management and Tracking (Example: Pipedrive)
• Payment methods (Examples: PayPal or PayU, Paygate, Yogo)
• Document Management Systems (Dropbox, Google Drive, iCloud, Papertrial, ShareFile)
• Productivity Software (Calendly, Monday.com, Asana, Microsoft 365)

Read out other articles for tips on accounting books and websites for accountants.