One of the benefits of being a modern business owner is the many accounting tools and software integrations available. Unless you’re a number-crunching accountant like my team and me, doing accounting tasks can seem incredibly dull.
However, numerous apps help business owners reconcile their books and stay on track with their accounting. This article will share some tips on choosing the best business accounting software for your needs, plus some suggested apps and integrations.
Why are accounting tools necessary?
Before the massive popularity of cloud accounting software, many bookkeeping and accounting tasks were done with physical spreadsheets or local copies of huge ledgers and financial statements.
These days, though, apps like QuickBooks and Bill.com help business owners manage and track their company’s financial performance. Whether you’re monitoring accounts payable metrics to reduce wasted resources or analyzing financial reports for business opportunities, there is an app for nearly every accounting task.
Manual data entry is a waste of valuable time.
Using good accounting software eliminates data entry tasks like receipt data entry and expense tracking. There are numerous costs associated with data entry which many you may be unaware of, including:
- Hiring costs for a data entry specialist
- Human error-related expenses, like customer satisfaction, lost revenue, and increased churn.
- Costs for correcting compliance issues, if things aren’t audit-ready
This is why it’s so critical for business owners to purchase good accounting software and incorporate automation into their accounting workflows. With fewer data entry tasks to worry about, you and your staff can focus on performing tasks that best align with your preferences and skills.
Connecting accounting tools to each other provides clarity.
When you’re making critical business decisions about growth and expansion, you can’t afford to have inaccurate or incomplete data. Acting on partial or erroneous data can have negative consequences for your business in the long run.
This is why most accounting tools offer integrations with other apps. Utilizing these integrative capabilities, you can gain a clear picture of your accounting data within their proper context. For example, Avalara AvaTax integrates with QuickBooks Online to automatically calculate sales tax and help you remain compliant with sales and use tax laws within regions where you’re doing business.
7 Tips to choose the right business accounting software
Choosing the right accounting software can be a challenging task for business owners, given the vast amount of options available. However, good accounting software helps you track your accounts payable, accounts receivable, expenses, profit, and much more. As any business owner knows, it’s crucial to monitor the money coming and the money going out of your business.
1. Educate yourself about accounting basics.
Even the best accounting tools are useless if you don’t know how to use them. You must take time to educate yourself regarding accounting basics – even if you plan on eventually hiring an accountant. Below, I’ve made a list of great places you can learn more about accounting principles, terms, and more so you’re able to make good accounting decisions.
2. Consider your business needs.
Another important aspect of finding the right accounting tools is considering the needs of your business. Each industry has different needs, so it’s best to consider how you’ll use the software and what features you prefer in your accounting software. For example, a construction company would likely look for accounting tools that allow for job costing and support financial forecasting.
3. Choose cloud-based accounting software.
In the past, doing accounting tasks meant hours of hunching over stacks of spreadsheets and punched out calculations on a ten-key calculator. Fortunately, cloud accounting software has revolutionized the accounting industry by allowing business owners and their accountants to securely access financial data from either a desktop computer or a smartphone. Any updates are synced and show up as real-time updates for all collaborators. By eliminating the need for paper, cloud accounting software frees up office space and allows staff to work together, no matter where they are located.
4. Consider your budget.
When it comes to accounting software, there are two attitudes that most business owners have in terms of their budget:
- Just give me the essentials.
- If I’m going to pay for it, it better be work perfectly for my needs.
If you have the first perspective, you’re likely to either choose a cheaper accounting solution or even decide to use spreadsheet software like Excel, Numbers, or something similar. Here are some options that business owners with this mindset will likely choose:
- Microsoft Excel
- Numbers (Mac spreadsheet program)
- Google Sheets
- Apache OpenOffice
In contrast, other business owners demand top quality in their accounting software. Those with this perspective think about the features they would most appreciate or integrations that they’d like their accounting tools to support, so they can get maximum return on their investment in their accounting technology stack. If you’ve got this type of perspective, here are some options you may want to consider:
- Zoho Sheets
5. Take note of any helpful integrations.
This tip is for business owners who want to get the maximum benefit from their accounting tools. In fact, many accounting software companies that target businesses and freelancers often introduce tax filing features into their products. As you shop for the perfect accounting tools for your business, check whether they support or integrate with the following services:
- Payment processing for independent contractors
- Payroll services for employee wages and benefits
- Automatic tax savings detector
- Point-Of-Sale (POS) systems, if you do in-store transactions
- Inventory management, for retail or e-commerce companies
- Customer Relationship Management (CRM) software
6. Automate accounting tasks as needed.
The PwC Finance Benchmarking Report for 2019-2020 revealed that 30% to 40% of time spent on accounting tasks could be reduced with automation. Doing all of your accounting manually increases the likelihood that you’ll make fewer errors, ensuring you make business decisions based on accurate data. Additionally, accounting workflows that are entirely manual form an environment that’s ripe for employee fraud, even if there is a separation of duties and other forms of internal controls.
7. Ask an accountant.
If you’ve already started looking for your new accounting software, there’s a good chance that you’ve been overwhelmed by the incredible range of options available. Each software product promises to be the best, which makes it almost impossible for you to know whether it’s right for your needs.
If you’re having trouble deciding, try talking to an accountant and getting their opinion on which software is best for your needs. The modern accounting industry is moving accountants away from “bean counting” and monotonous number crunching toward the role of an advisor, known as an advisory accountant.
Rather than focus on accruing billable hours, advisory accountants center their services around a blend of business strategy and accounting insights so their clients receive financially sound recommendations for improving their company’s financial performance. At MBS Accountancy, we’re joining this upcoming group of accounting professionals because we realize it’s a natural transition that holds the most benefit for our clients.
6 Accounting Tools To Consider Using For Your Business
Now that we’ve discussed tips for choosing accounting software, let’s look at several accounting tools and app integrations that you can use to improve your efficiency and accuracy in your accounting.
Even if you choose to hire an accountant, it’s worth knowing which accounting tools you’d like to use, so you can ask them whether they can help you integrate them into their accounting services for you.
1. Float App: cash flow & financial forecasting made easy
One of the biggest problems facing business owners is not knowing where their money is going. With Float, you’re able to gain cash flow insights from an easy-to-understand dashboard that connects to accounting software like QuickBooks, Xero, and FreeAgent.
Using your accounting data, Float will provide real-time insights regarding your incoming cash, bills, invoices, outgoing expenses, and much more. One significant feature of Float is its scenario planning, which uses your current cash position and determines the impact of making a hire, losing a client, increasing expenses, or receiving a late payment from customers.
2. LivePlan: business planning in a few clicks.
Designed to help businesses at any stage of growth, LivePlan makes business planning easy by guiding you through the process of creating a one-page business plan. This one-page business plan includes:
- Competitor analysis
- Industry benchmarks for metrics regarding profit, cash, and more
- Budget planning and forecasting
- Secure sharing and collaboration features
3. QuickBooks: modern accounting software for businesses.
There are numerous accounting software products available, but we’ve found that QuickBooks provides the best balance of quality, integrations, security, and data accuracy for our accounting clients. Available in a desktop version or cloud-based version, QuickBooks provides you with real-time access to transactions, financial reports, statements, and more from your computer or phone.
4. Receipt Bank: Automation for expense management & reporting.
No business owner wants to spend their time uploading receipts or manually inputting transactions. Luckily, with Receipt Bank, you can use automation to take care of both of those boring tasks!
Once you’ve set up your account and connected your company’s bank accounts, Receipt Bank works in the background to track and categorize transactions while you focus on the parts of your business that you actually enjoy and want to do. Receipt Bank will also send you an expense report periodically, so you can easily view trends and patterns in your company’s spending habits.
5. TSheets: Tracking time is easy and error-free.
With thousands of five-start reviews online, QuickBooks Time (formerly TSheets) is one of the most popular time-tracking apps for small business owners and freelancers. QuickBooks Time lets your employees track their time accurately and effortlessly from their smartphone or computer.
From their home or their office, your employees will be able to let you know how much time they’re spending on their duties. For managers and business owners, QuickBooks Time lets you easily adjust shifts and notify employees, or add tasks, projects, or other details to schedules so everybody is on the same page.
6. Gusto: Payroll, benefits, and HR solution that’s people-friendly
From onboarding to benefits, Gusto provides business owners with a seamless solution to care for their employees and contractors. To borrow from the website, “Gusto makes it easy to onboard, pay, insure, and support” your staff, so they’re happy and motivated to do their best work for your business. Included within Gusto’s platform are numerous services that are needed for those with employees:
- Full-service payroll
- Medical, dental, and vision insurance
- Time tracking capabilities
- Hiring and onboarding assistance
- Finance tools for employees
- Expert HR assistance for business owners
Prefer an accountant over accounting tools? Contact us!
At MBS Accountancy, our team of accounting professionals handles accounting, bookkeeping, and taxes for our clients, so they can focus on business growth. Our mission is to act as a valuable, trustworthy partner for each of our clients, offering sensible and finance-informed advice on critical business decisions. With the right data and the right accounting partner, we believe that you can achieve your business goals and enjoy a successful future. Contact us today to learn more about our accounting services.