Choosing the Right Cloud Accounting Software for Your Business
Choosing the right cloud accounting software for your business is not easy. There are so many options to choose from all boasting different features and pricing. To help you make the right choice we have summarised our top 3 recommendations.
Xero have been around since 2006, so have had plenty of time to develop and refine their product. There are 3 packages available: basic, standard and premium. The standard package is the most suitable option for most businesses and allows you to complete your invoicing, bank reconciliation, purchase ledger and VAT. It also has a fixed asset register included as standard and basic tracked inventory. As with most cloud software options, direct bank feeds allow for easier bank reconciliation and are encouraged when you set up your account. Other optional extras include an integrated payroll software, expense tracking, CIS reporting and a simple project management add-on.
Earlier this year Xero purchased the expense capture app, Hubdoc, and made this free to anyone with a standard subscription or higher. This allows you to photograph your expenses and automatically extracts a lot of the data for you, ready to push through into Xero.
One area in which Xero stands out is the highly developed integrated app market. These third-party apps allow you to really customize your software package. Apps include detailed reporting systems, till or e-commerce integrations, in depth inventory tracking, credit control, payment collection apps and much more.
Xero is very user friendly and has a customizable dashboard allowing you to track certain categories, debtors and creditors at a glance, and there is a mobile app which allows you to use the majority of features on the go. If you are currently using a desktop version of Sage or Quickbooks you are offered a free conversion of your data into Xero which includes customer and supplier records and your chart of accounts so you will be able to pick up where you left off in the new software. Xero would be a great option for most small businesses wanting easy to use software which allows greater insight into their business. The customizable reporting would be particularly useful for those wanting management accounts.
Quickbooks is another option suitable for small to medium businesses. Again, there are 3 packages to choose from with the “Essentials” package being the most used. Quickbooks also provides you with the expected functionality of invoicing, purchase ledger, bank reconciliation and VAT. It also contains inventory tracking in a way which feels more intuitive than that of Xero and so may be better suited to businesses that require the ability to track smaller numbers of stock items. Payroll is also available as an optional extra should you require it. The Quickbooks app allows you to photograph your receipts and uploads these into the software for you to review. It also contains a mileage tracker allowing you to document your business mileage and enter this into your accounting records.
As with Xero, there is a dashboard to show a snapshot of your financial position and it also allows for the integration of third party apps to increase the functionality of your software. It is worth noting, however, the marketplace for these apps is not as easily navigated as that on Xero.
Quickbooks is a popular choice for small businesses, however, it is not always as easy to navigate or as intuitive as Xero. Due to that it may be better suited to those who are already quite confident with their bookkeeping. It would be a good choice for small businesses wanting to track their inventory such as small shops, but for larger scale inventory tracking or manufacturing you may require additional apps.
FreeAgent is a more basic software than Xero and Quickbooks. It still allows for invoicing, recording of expenses, bank reconciliation and filing of VAT but it is lighter on optional extras and integrations. This software is perhaps better suited to simpler business structures such as consultants and small sole trader businesses. There are again 3 different packages available but rather than being set by business size they are set by the structure of your business, meaning it may be cheaper than other options for some business structures, but for others it may work out more expensive so make sure you compare current pricings before making a final decision.
The reporting capabilities are a lot more limited than with other software options, but you can get the basic reports you might expect such as a profit & loss account and aged debtors and creditors. Overall, the software is quite simple to use and navigate and could be a great option for micro businesses wanting to manage their own bookkeeping but not requiring a lot of detailed reporting.
If you are considering the move to cloud accounting software but would like to discuss your options in more detail, please contact us here or call us on 01427 611177.