Choosing the right bookkeeping software is an important decision for any business. The right software can save you time and frustration while giving you greater insight into your finances. The wrong software can end up costing you money while failing to meet your needs. 

When evaluating bookkeeping solutions, it’s important to take the time to assess your specific business requirements. The software that works well for one company may not necessarily be the best fit for another. 

This comprehensive guide will outline key factors you need to consider when selecting bookkeeping software for your small business. We’ll also provide an overview of some of the top bookkeeping platforms on the market today. Let’s get started!

Define Your Bookkeeping Needs

The first step is to have a clear understanding of your business’s bookkeeping needs. 

– What specific tasks do you need the software to handle? This may include accounts receivable/payable, invoicing, expense tracking, payroll, financial reporting, and more.

– How many users need access to the software? Will you be using it solo or does your whole accounting team need to collaborate in the system?

– Do you need to track billable hours and projects for clients?

– What kind of financial reports do you want to generate?

– Do you need accounting compliance features?

– How much data storage will you require?

Having clear answers to these questions will help narrow down your options to bookkeeping systems that can handle your workload and requirements.

Consider The Size of Your Business

Bookkeeping software ranges from basic single entry programs for very small businesses to sophisticated double entry programs designed for larger enterprises. 

If you just need to track income and expenses as a solopreneur or small side business, a basic entry-level solution like Wave could suffice. 

Larger companies with more complex accounting needs would want a robust solution like QuickBooks Online or Xero that offers customizable reporting, invoicing, inventory management, payroll integration, and other advanced features.

So consider where your business falls on the size spectrum and choose software that aligns with your current requirements as well as future growth plans.

Determine Your Budget

Bookkeeping software can range in price from free to several hundreds of dollars per month. Consider how much you are willing and able to spend.

Entry-level basic accounting software typically ranges from free to $10-20 per month. Mid-range solutions are around $30-70 per month. Robust systems designed for larger businesses can cost over $200+ per month.

Also find out if the software charges per user. For growing businesses it helps to find solutions that allow unlimited users.

While you don’t want to overpay, remember that quality software with great features can save you time and provide a wealth of business insights. Investing in the right solution typically pays for itself over time.

Compare Features and Functionality

Dig into the features and functionality offered by bookkeeping app contenders to see how they stack up.

Some key capabilities to look for include:

– Invoicing – Create professional customizable invoices and automate recurring invoices

– Expense tracking – Track purchases, payments, reimbursements and manage expenditures

– Bill Pay – Pay bills and manage vendor accounts payable

– Reporting & Dashboards – Access real-time financial reports and visual summaries

– Bank Reconciliation – Sync transactions and reconcile accounts

– Mobile Apps – Manage finances on-the-go

– Inventory Management – Track inventory, sales, and cost of goods sold

– Multi-currency – Record transactions in multiple currencies

– Payroll Integration – Seamlessly integrate with payroll systems

Prioritize the features that are most essential for your business. Consider capabilities for both your current needs and future growth plans.

Look for Integration Capabilities

The ability to integrate with other business software is extremely beneficial. 

Look for a bookkeeping solution that can sync with your ecommerce platform, payment processor, payroll system, POS system, CRM software, and other tools. This streamlines data entry and provides a single source of truth.

 APIs and Zapier integration can also allow you to connect your bookkeeping software with hundreds of other apps.  

Seek Out Strong Customer Support

No matter how intuitive the software, questions and issues will inevitably come up. 

Look for bookkeeping platforms that offer readily available customer support via phone, email, live chat, tutorials, FAQs, and user forums. 

Having access to support reps who can quickly answer your questions can save you time and hassle.

Read Reviews from Other Users

Before committing to a bookkeeping platform, look up reviews from other customers to gain insights into pros and cons.

Platforms like Capterra, Software Advice, and GetApp allow you to compare user ratings and feedback on popular accounting software options.

Look for candid reviews on ease of use, available features, quality of customer support, value for money, and overall user experience.

Pay attention to aspects like:

– How intuitive users find the interface

– How helpful the setup wizard and onboarding is 

– How accurate the bank feeds and transactions are

– How responsive and knowledgeable support reps are

– Whether integrated apps sync seamlessly

This can reveal pain points to be aware of or features that could provide real time-saving benefits. 

Consider Data Security

For any cloud-based software that will store sensitive financial information, data security is paramount. 

Look for bookkeeping platforms that leverage top security technology like TLS/SSL encryption, two-factor authentication, role based permissions and more.

Be sure to understand their security protocols for protecting data at rest, in transit, and in use. Reputable software providers will be transparent about their security measures.

Test Out The Software

Most bookkeeping apps offer free trials that allow you to test out the system first-hand before committing.

Take advantage of these to input some of your actual data and workflow. Get a feel for the interface, features, ease of generating reports, and more.

Many also provide consultations with solutions experts who can demo the software based on your particular business needs.

Hands-on testing can reveal if the platform will truly be a good fit or if you should keep looking. Don’t skip this step in your evaluation process.

Top Bookkeeping Software Options

Now that we’ve covered tips for choosing accounting software, let’s take a look at some of the top solutions on the market today.

QuickBooks

QuickBooks Online is one of the most widely used small business accounting platforms. They offer a range of pricing plans based on number of users and features required.

Key Features:

– Invoicing

– Expense tracking 

– Reporting & dashboards

– Bank reconciliation  

– Bill pay

– Inventory management

– Mobile apps

– Payroll integration

– API for custom integrations

Ideal For: Small businesses looking for an intuitive cloud-based bookkeeping solution with extensive features. Has versions tailored for specific industries like contractors, retailers, and manufacturers. 

Pricing: Starts at $25/month for Simple Start plan. Advanced plan is $70/month. Additional user fees apply.

Xero 

Xero is a popular cloud-based accounting platform praised for its user-friendly interface. Offers robust reporting and seamless integration with many business apps.

Key Features: 

– Invoicing 

– Expense claims

– Bank feeds

– Project tracking

– Reporting & dashboards

– Inventory

– Multi-currency

– 700+ app integrations

Ideal For: Growing small businesses looking for a full-featured accounting system with excellent integration capabilities.

Pricing: Starter plan is $12/month. Standard plan is $30/month. Premium plan is $60/month.

Sage 

Sage offers robust accounting software for small to mid-sized businesses. They have industry-specific versions for construction, manufacturing, nonprofit, and more.

Key Features:

– Invoicing

– Cash flow management 

– Reporting & dashboards

– Estimating tools

– Bill pay

– Mobile access

– Compliance features

– Inventory management

Ideal For: Larger small businesses with more complex financial needs. Has advanced capabilities tailored to specific industries.  

Pricing: Starts at $25/month for Sage 50c plan. Sage 200 plan starts at $65/month. Enterprise Management plan pricing customized.

FreshBooks

FreshBooks offers an intuitive accounting solution designed for service-based small businesses and solopreneurs. Known for outstanding customer support.

Key Features: 

– Time tracking

– Invoicing

– Expenses 

– Mobile apps

– Basic reporting

– Integrates with many popular apps 

Ideal For: Freelancers, consultants, agencies, and service businesses that bill by time/project.

Pricing: Lite plan is free. Plus plan starts at $15/month. Premium plan starts at $25/month.

Wave

Wave offers free accounting software for very small businesses, along with affordable paid plans that add advanced functions like payroll.

Key Features:

– Invoicing

– Accounting & reporting

– Receipts tracking

– Payroll (paid plan)

– Multi-currency conversion

Ideal For: Solopreneurs and very small businesses on a tight budget looking for an entry-level solution.

Pricing: Free for core accounting features. $20/month adds payroll. $35/month for Premier plan.

Zoho Books

Zoho Books provides an affordable accounting solution for growing small businesses seeking robust tools without the advanced complexity.

Key Features:

– Time tracking

– Invoicing  

– Expenses

– Bank reconciliation 

– Multi-currency  

– Inventory

– 500+ app integrations

Ideal For: Small businesses that want an easy-to-use solution with extensive integrations. Offers excellent value.

Pricing: Starts at $9/month for single user. Multi-user plans start at $19/month.

Conclusion

Selecting accounting software for your small business is an important decision that can help streamline your finances. Take the time to assess your specific needs and business size when weighing your options. Comparing features, integrations, reviews, and free trials can ensure you select a solution that fits your requirements and budget. Investing in the right platform will provide value for years to come.