Running a small business is a challenging task. Between managing employees, serving customers, and keeping up with day-to-day operations, it can be easy to let critical back-office tasks like accounting fall through the cracks. However, solid accounting practices are vital for any successful small business. The right accounting software can make all the difference in keeping your finances organized and ensuring your business stays compliant and on track.
Assessing Your Business’s Needs
When choosing an accounting solution, consider what features your small business needs most. Think about day-to-day tasks like invoicing, expense tracking, account reconciliation, and reporting. Then, explore the options for accounting software for small business. As a small business owner, some key things you’ll want to look for include:
As a small business, you likely have to build an accounting department to manage this area of operations. So, opting for intuitive and easy-to-use accounting software can make a big difference in ensuring processes don’t fall through the cracks. The best programs require little accounting knowledge and have interfaces that allow business owners and staff to quickly and easily:
- Generate invoices
- Track payments
- Reconcile accounts
- Manage cash flow
- Run key financial reports
One of the best things about running a small business is the opportunity for growth. Be sure to choose accounting software that will scale with your business. Having scalable accounting systems in place from the start will prevent having to transition to entirely new platforms down the road. As your small business grows, look for solutions that allow you to:
- Easily add new products and services
- Integrate with additional business systems
- Add users and permissions
- Access more features and functionality
Run more efficiently by choosing accounting software that integrates seamlessly with your other systems. Key integrations to look for include:
E-commerce platforms: Sync transaction data from marketplaces or your website directly into your accounting solution rather than manually export and upload data.
POS systems: Connect your point-of-sale system to your accounting software to capture this sales data automatically and accurately.
Banking: Connect bank accounts and access key details like real-time balances and deposited funds from right within your accounting platform.
Payroll: Generate payslip data, including salaries, deductions, and withholdings and ensure this flows accurately into financial statements.
Tax software: Eliminate duplication of effort by choosing accounting software that integrates directly with your tax filing solution.
Key Features to Look For
Accounting encompasses many vital processes and functions. Be sure to opt for software robust enough to handle everything from invoices to inventory, depending on your business’s needs. Some key features small companies benefit from include:
Send professional invoices in seconds while automating reminders to prevent late payments. The right software makes invoicing painless by offering:
- Customizable invoice templates
- Recurring invoices for regular services
- Online payment portals and automation
- Tracking of payments owed and received
Proper expense documentation is critical when it comes to taxes and deductions. Choose software that makes it simple for employees and vendors to submit expenses and managers to process reimbursements by offering:
- Mobile receipt capture
- Company debit card integration
- Multi-level approval workflows
- Reporting by category or expense type
Close the books each period with confidence. Opt for accounting systems that offer robust reconciliation features, including:
- Automated matching of imported bank/CC transactions
- Splitting transactions
- Flagging of unclear transactions for review
Reporting & Analytics
Gain visibility regarding your business’s performance via financial reports and dashboards. Opt for accounting platforms that offer custom reports, real-time metrics, cash flow health checks, profitability reporting, and data exports.
For product-based businesses, choose software with inventory management capabilities or integrations with third-party inventory platforms. Key features can include:
- A central database of product details and quantities
- Automated syncing with orders and sales transactions
- Inventory value reporting
- Reorder reminders and restock workflows
Cloud-Based vs. Desktop Solutions
Another critical choice is opting for a cloud-based vs. desktop accounting solution. For most modern small businesses, cloud-based accounting software that is accessible from anywhere via desktop and mobile is most convenient. However, for businesses handling susceptible financial data, some may still prefer an offline desktop solution. When deciding what works for your small business, consider:
Cloud: Access your data from anywhere, on any device with an internet connection. Great for remote teams and field employees. Offers the highest flexibility.
Desktop: Can only access data from the device the software is installed on. Less accessible for remote teams. Reliant on your hardware.
Cloud: Leading cloud accounting vendors leverage high-grade security, including data encryption in transit and storage. For most small businesses, cloud security is robust.
Desktop: A non-networked solution avoids security issues associated with cloud platforms sharing data over the internet. Allows offline access.
Cloud: Monthly or annual subscription plans, scalable depending on needs—predictable, flexible costs without significant upfront investments.
Desktop: Larger one-time costs associated with software license purchase and installation on a supported computer system. Requires in-house IT.
Cloud: Software updates are automatically applied, allowing teams to instantly access the most up-to-date features. No manual updating is required.
Desktop: Require users to complete manual updates and reinstall software as updates become available for downloaded versions.
By thoroughly assessing your small business’s accounting needs before choosing a solution, you can ensure you select software that supports short-term finance management while offering long-term scalability and flexibility. Investing in the right platform will provide the visibility and control needed to sustain and grow a successful organization.