One of the best ways for a small business to cut costs and create savings is to deploy and utilize accounting software. Well designed accounting software can help any business reduce costs by increasing the efficiency with which incoming cash flows and payments, outgoing bill payments and liabilities, and payroll are handled.
Many small businesses either rely on accounting software for their own use, or keep accounting software on hand for a part time bookkeeper that handles weekly or bi-weekly input of financial figures, and handling of payroll and other outgoing expenses.
For many small businesses, this means that the business can avoid the fiscal hurdles associated with keeping a full time bookkeeper around.
Generally, the specific financial needs your business has, combined with the kinds of products it sells, and the scale of your business will determine precisely how much you pay for an accounting software package.
Some are specifically tailored to accommodate certain business models or product types; others are more general, and though they will work, they might not work as well as a software package designed for your business.
Below, you’ll find a comparison of various sorts of accounting software that are available.
QuickBooks is the ubiquitous accounting software that largely dominates the accounting software market among small and midsized businesses. It is a spinoff of the famously popular Quicken personal financial management system.
By and large, QuickBooks was intended for use by small business owners with little or no formal training in accounting processes. Today, the software dominates nearly 85% of the small business market.
Today, the software includes features such as audit trails and double-entry accounting functionality. There are also a variety of QuickBooks variants available, including those for manufacturers, wholesalers, professional service providers, contractors, non-profits, and retailers.
Mid-sized businesses generally depend upon QuickBooks Enterprise Solutions for their accounting needs. In addition, the popularity of the software ensures that there is a thriving third party marketplace for addons and other applications that interact with, and contribute extra functionality to QuickBooks.
QuickBooks also has a special Point of Sale edition that is marketed to small businesses that operate retail shops. For many small business owners, QuickBooks is the golden standard for accounting software, and many will refuse to use anything else.
Peachtree Accounting is an accounting software package that is sold by Sage Software, and is predominantly used within the United States. The Peachtree line of software predates QuickBooks, but never managed to take a foothold in small business markets in the manner that QuickBooks did.
The software is very common among mid-sized and some larger businesses. It is generally considered to be less user friendly than QuickBooks, but is often preferred by trained accountants because it allows for more nuanced control over the accounting process.
The latest version of this software, is named Sage 50 Accounting.
Microsoft Small Business Financials, which used to be called Microsoft Small Business Manager, is an accounting software package aimed at small businesses that have less than 25 employees and less than $10 million in revenue per fiscal year.
Many users of this software package have now abandoned it, and have moved to Microsoft Dynamics GP. However, the software can still be found in some businesses. It is not intended to be used by a layperson.
This software package, created and maintained by the Dutch software company Unit 4, focuses on modular management of a company’s resources. It is best suited for mid-sized and larger businesses.
It is well known for “playing friendly” with a wide variety of database and data storage formats, which makes it popular for businesses moving away from now outdated or defunct accounting software packages. It is not intended for use by a layperson.
FinancialForce.com is a provider of cloud-based accounting software that runs on Force.com, the site that is famous for SalesForce.com.
It provides accounting, billing, professional services automation, and services resource planning functionality.
This software package is known for being highly flexible, and is able to easily accommodate businesses of any size. However, it is probably not a good fit for the layperson, since it requires a somewhat in-depth knowledge of accounting practices.
For those that are believers in the free software movement, GNU Cash is the go-to solution for accounting software. It uses a double-entry bookkeeping system, and though it was initially aimed at personal finances, it has been updated with features for small business accounting needs.
It allows importing QuickBooks data, and is available on a wider variety of platforms than most other packages.
The downfall of this software is that it does not provide for inventory management, cannot support point of sale systems, and lacks features like deletion of reports via the GUI, and cannot generate estimates.
Another open source accounting software package is OpenBravo. OpenBravo comes in two forms: first, the enterprise resource planning (accounting) software, and point of sale system software.
It supports Sales, Procurement, Manufacturing, Projects, Finance, MRP and other functionalities that are commonly needed by mid-sized businesses. On the other hand, OpenBravo POS allows for retail and hospitality business point of sales.
The POS system is completely intergrated into OpenBravo’s ERP software package, which makes it very esay to update stock levels, and to manipulate other factors that have an impact on the point of sale system. This software is particularly popular in Spanish-speaking countries, since the project originated in Spain.