First you need to decide whether you want to use cloud-based accounting software or traditional, on-premises software. Online accounting software updates automatically (at no extra charge), and you pay a lower monthly subscription, which reduces your up-front costs and makes predicting expenses easier. You buy traditional, on-premises software outright and install it on your network server or PCs. Although you own it forever, it becomes outdated pretty fast.
Yes, it’s a twist on the lease-versus-buy argument, but when it comes to software, there’s no equity and resale value to consider in the equation. It’s simply a matter of either paying a little every month for the rest of your business’ life or paying a lot at once and owning the software outright—until you pay a lot again for the next upgrade version.
Accounting for Hidden Fees and Hidden Savings
But that’s not the only cost to consider. You may need an actual accountant too (be honest, you know you do), for tax filings and such. And, if you grow big enough, you may need a comptroller too. Gee, who knew having money cost so much money?
If you do use an accountant, check with her first before you buy to see if she has any software preferences. If she does, you might have to fork out a little more cash to play the match-the-accountant’s-software game, but you could score big in savings on accounting fees as a result.
However, you may find some accounting software offers more bells and whistles than you can use or afford. What sense does it make to spend more money on software than you earn?
None, right? But choosing the cheapest accounting software doesn’t make sense if it won’t scale as you grow or, worse, leaves you sitting in an IRS auditor’s office.
The moral of the story here is that you really can’t afford to choose your accounting software based on costs alone. Take a serious look at your business accounting needs now, consider what they might be in the future, and then decide on the software based on that information. If you’re unsure what those needs are, seek guidance from your accountant. Webi7 digital media
The Lowdown on Free Accounting Software
Let’s say you’re a freelancer, or you own a company that’s a money drain at the moment; or maybe you own a startup in the phase before start or up. In those cases, free accounting software may be your best or only alternative.
Just be aware that when you do start making real money, you might have to bail on the freebie and move to something with more accounting muscle. Or you might not. It depends entirely on your needs. For example, if you own a dead-broke startup and an angel investor shows up with a pile of cash, then you might want to switch to another accounting system first.
If you’re in the market for free accounting software, take a serious look at these options.
1. Adminsoft Accounts
This multi-user, multi-company, and multi-currency double-entry accounting system has a sales ledger (accounts Receivable), purchase ledger (Accounts Payable) and a general ledger. It also offers inventory, purchase order, sales invoicing, human resources, and payroll processing. Free vertical modules, such as for the retail and restaurant trades, make it easier for people in those trades to process and pull numbers specific to their operations.
2. TurboCASH 5
This open source accounting software is easy to use even if you don’t have an accounting background. It’s available in 25 languages and covers more than 80 different tax regimes. It contains standard accounting features, and its user-community numbers more than 100,000 strong and counting.
This accounting software is highly customizable, offering a hundred possible combinations in customization. You can even turn on and turn off features so that you end up looking at only the information you need and not a lot of empty fields instead. It contains standard accounting features.
4. xTuple PostBooks
This very comprehensive accounting program also offers customer relationship management (CRM) and enterprise resource planning (ERP) capabilities. A number of modules allow you to build the system to your liking.
You can link this software to your banking, Paypal, or other money accounts, and it will automatically fill in the appropriate accounting field for you. It can also generate accounting reports as well as perform standard accounting.
This one is just about as easy to use as a checkbook register. You can track bank accounts, stocks, income and expenses on this software. It is a double entry system with lots of powerful tools and report generation capabilities. GnuCash even has tools to help you find wrong entries and errors.
Premium Small Business Accounting Software
Premium accounting software—as in software you have to pay for—generally, but not always, comes with more accounting muscle than the freebies listed above. Some of these options are available only as software-as-a-service (SaaS) or cloud-based, meaning you use them online and pay a monthly fee. Others are available both as SaaS and as a buy-outright and own-it-forever version. You get to choose which type you want.
Plus, most of these small business accounting software programs let you share your records with your accountant online and include secure mobile apps that let you see your books when you’re away from the office.
1. Intuit QuickBooks
If you haven’t heard about this one before, you’ve been living in a cave or on a desert island without Wi-Fi. This very mature and stable accounting program comes with all the bells and whistles, although said bells ring and whistles whistle differently depending on the version you select. Online prices vary from $12.95 to $39.95 per month, making it affordable for most businesses, even one-person shops. Desktop version (on-premises, you own it) prices range from $249.95 to $399.95. You can also take QuickBooks for a spin on a free trial to see if you like it before you subscribe.
Yet another mature and stable product that offers tons of accounting and business features. The basic online, small business version is called Sage One, and pricing ranges from $9 to $24 per month depending on which package you select. The desktop, on-premise version for small businesses is a beefier, more-advanced version called Sage 50, and it comes in four versions ranging from $299 to upwards of $5,000 for extreme users. Not sure which version—online or on-premises—you want? Test them in a free trial and then decide.
This great, full-featured accounting program offers plenty of add-ons—from CRM and inventory management to invoicing and job systems—for easy customization. You can try it out in the free-trial version first, but after that costs range from $9 a month for a one-user starter package to $180 per month for up to 100 users.
This software has matured and offers many features standard to accounting along with many extras, too. And all of it is available for a flat monthly fee of $24 no matter how many employees you have working on it. You also have the option of a free-trial period before you subscribe.
This software was one of the first available online, and it’s a running favorite for independent contractors and professional service providers. If you haven’t looked at it lately, look again because it packs more features now than in earlier years—but it’s still simple and intuitive to use. If you need more functionality, boost the system with integration add-ons for more than 70 software and service offerings. Pricing starts at $19.95 a month.
This accounting software aims to please sole proprietors who are typically online sellers and freelancers. It offers accounting and related services, many of them conveniently automated. Pricing is $9.99 per month.
Take advantage of the free trials and give several programs a test drive to see which one works best for you. But whatever you do, choose one soon. Every day that you delay is a tax day crunch in the making. After all, you need to know what’s happening to the money in your business—otherwise you’re in for some nasty surprises ahead.