The Best Online Accounting Software for Small Businesses
A skilled accountant will keep you tax compliant and ensure that you’re always in-the-know and focused on the big picture when it comes to your financials. Yes, you could try to do it all yourself, but do you have the time or expertise? (Or the interest!?)
And cost can definitely feel like a huge barrier here – it can be hard for a small business to afford to hire an accountant. Additionally, if you wait until tax time to get it together, it can end up giving you a real headache – hiring an accountant at the last minute with books full of errors could cost you more than you set aside in the first place. Thankfully in 2021, there are many affordable online accounting software options available for small businesses.
What does online accounting software do?
Online accounting software stores a business’s financial data in the cloud, and is often used to perform business transactions such as invoicing clients and cutting checks. Most modern accounting software platforms, such as Quickbooks Online or Xero, are always connected to the internet, and they automatically receive and update your data by connecting to your bank accounts. With these platforms, you have access to your books from any internet-capable device, like your laptop or smartphone. Most of these programs automatically enter, store, and analyze data for you which is especially useful for saving time on tasks like bank reconciliation. Not all accounting programs were made equally, though! Different kinds of accounting software programs are made for different businesses. Some come with tons of features and are good for larger teams or international markets, like Xero, while others focused on small businesses with a sole bookkeeper, like Quickbooks.
The best online accounting software for a small business offers useful tools like invoicing, bill payment, payroll, and financial reporting. Many even offer tools for project management and time tracking. Xendoo can take much of the daily bookkeeping work off your plate—we utilize Quickbooks and Xero accounting software, so you have ownership of your financial records while benefiting from the Xendoo online bookkeeping and accounting team.
Why your small business needs accounting software
Your small business can benefit from online accounting software if you’re just plain bad at math, unorganized, or find it hard to conceptualize finances and consistently track incoming cash. Having a clear set of invoice and payment records is one of the most important things a small business can do to set itself up for success. Online accounting software provides tracking and up-to-date visibility to the financial health of your business, so you can make smart decisions and be tax-ready all year long. And the most common reason of all for why your small business needs accounting software is that you are too busy focusing on the ins and outs of running your business to take on all of the bookkeeping, accounting, and taxes on your own!
Our picks for the best online accounting software for small business:
Xero prides itself on providing fast, simple, powerful accounting software that all of your users can access at the same time, regardless of their different locations or operating systems. Xero offers a variety of user-friendly features to help you run your business, such as paying bills, claiming expenses, and accepting payments.
The Xero model of using a single unified ledger is particularly helpful for businesses that have team members working internationally or even in different time zones – everyone can work in the same books at the same time. And it’s a good choice for businesses that are growing or that change frequently – Xero is known for having a large amount of secure connections with financial institutions around the world and integrates with more than 500 third-party apps, plug-ins, and products so you can craft a solution that meets your ever-changing needs.
Choosing Xero for your accounting software needs is a great choice, but keep in mind that you will still need to manage the software on your own, perform your own data entry and bookkeeping, and will likely still need to hire an external CPA for tax filing. If you don’t have any bookkeeping experience there’s always a chance you will use the tools incorrectly. Additionally, Xero might not be the best choice for you if phone support is important to you as they only offer customer support over email, or through their online resources.
Wave offers online financial software designed with entrepreneurs in mind. Sole proprietors love the price tag – they offer accounting software, invoicing, and receipt scanning for free. Keep in mind these are the tools – you will still need to understand how to manage it all on your own. Without any background or experience, there is always a chance you will use the tools incorrectly.
Additionally, under separate paid plans, Wave offers bookkeeping services, payroll services, and online payment processing. It is an excellent choice for very small businesses but isn’t suitable for larger businesses. Unlike most other online accounting software options, Wave doesn’t offer robust mobile apps or additional useful tools like project management and time tracking. It’s the best free option for basic accounting software but lacks additional features that growing businesses need. Wave is owned by the tax preparation company H&R Block.
QuickBooks Online is one of the most popular accounting software options for small and mid sized businesses. QuickBooks was originally released in 1983 and is owned by Intuit, who also makes financial programs TurboTax and Mint. QuickBooks Online is their online accounting software and offers all the robust features you would expect from financial software – accepting business payments, managing and paying bills, payroll options, customer support, and more – all for a set monthly fee.
For additional fees, QuickBooks Online can connect you with recommended bookkeepers and advisors. QuickBooks Online is one of the most trusted online accounting software options out there, but keep in mind that you still need to know what you are doing – QuickBooks doesn’t do the work for you. Without any training in bookkeeping, it’s very easy to use the tools incorrectly.
Zoho offers a suite of online productivity tools and apps. Their online accounting software, Zoho Books, is a popular affordable option for very small businesses who do not need integrated payroll within their software. They offer most of the features you’d expect from an online accounting software solution – except for integrated payroll, which is very important to most businesses. Additionally, Zoho Books caps transactions at a certain size on their highest paid plan – something worth noting if your business is growing rapidly. As with most other online accounting software options, you still need to manage everything yourself and know what you are doing. You will need to handle all bookkeeping and accounting on your own, and will likely need to hire an external CPA to manage your taxes and help you stay compliant.
Why you should hire an accountant for your business
When you outsource your accounting you save time and money right off the bat, and ultimately contributes to the overall health and success of your small business because having a clear and accurate picture of your financial records is absolutely key. Investing in help to properly manage and organize your finances and operations ensures that you are hitting your profit goals, staying legally compliant, and contributing to the success and prosperity of your business.
Xendoo syncs up with partner software platforms Quickbooks and Xero, to save time, improve accuracy, and keep your books up to date. This makes it easy to transition from working alone and trying to do it all yourself – plus it’s easy if you ever need to change platforms because your bookkeeping software goes with you.
Xendoo does your monthly bookkeeping for you – providing a monthly profit and loss report, and a balance sheet report. And it also keeps you IRS compliant and takes care of your tax returns. You can see your revenue and profitability trends over time. And whenever you need to talk to your financial team, they’re available via text, call, or email.
A major benefit to working with Xendoo is that it utilizes Quickbooks and Xero for bookkeeping. Plus Xendoo’s in-house CPAs prepare and file your business tax returns all under the same roof as Xendoo bookkeepers, who are all located in the U.S. Tax consulting is also available throughout the year in most plans. Most of their online accounting packages include weekly bookkeeping, tax consulting, tax preparation and filing, dashboards, profit & loss statements, balance sheet, and a dedicated bookkeeper.
With Xendoo’s all in-house online small business bookkeeping and accounting expertise, you’ll have the ability to take your bookkeeping software if you decide to hand it over to someone else – making Xendoo a safe and dependable first choice in online accounting software for small businesses.
Ready to have those books off your hands? Contact us to schedule a free consultation.