Best Accounting software
- 07 June, 2016 10:25
These days you don't buy a single accounting program, you subscribe to one.
[Update: Check out the Top 5 Best Accounting Software packages for 2017]
Accounting software used to be one of the most annoying product categories on the planet. Not only was the software hard to use, forcing many small business owners to hire book-keepers and accountants in order to make sure everything balanced at the end of the month and spend hours typing invoices, the costs were high and there was annual pressure to update the software as the government changed accounting and tax rules each year.
The software licensing typically meant most businesses could only afford to have it on one computer and if something went wrong with the program, you could waste a lot of time getting things up and running or recovering data.
Today, there’s no real need to install accounting software. Cloud services, delivered by relative newcomers like Xero and Saasu, compete alongside established marques like QuickBooks, Reckon, and MYOB. And those new players have upped the ante, forcing the old-timers to lift their game and make their applications easier to use, more reliable and up to date.
Six things to consider
Before jumping in and subscribing to a cloud-based accounting solution, there are a few things you need to consider.
Annual fees: With a cloud-based service, you’re not actually buying the software. You’re paying for ongoing access to a service that’s being hosted by another company. So, you’ll need to budget for monthly or annual payments. One of the furphies often spruiked by Software as a Service (SaaS) providers is lower costs. Generally, the costs aren’t lower. They are just spread over a different period: they represent Operating Expenditure (OpEx) rather than Capital Expenditure (CapEx).
Your data: SaaS providers don’t just provide the software – they also hold your data. Make sure you do your due diligence to ensure your data is stored safely and that you can extract it in a usable form should you choose to jump ship and change provider in future.
Integration: It might not be high on your list initially, but as your business grows and you invest in more SaaS you will probably want the different services to work together. Do your research to ensure the accounting system you choose can integrate with stock control, point of sale and other applications you might need in future. And don’t forget your address book – having a single address record for all your customers, suppliers and other partners will ensure you don’t have to maintain the same data into two systems.
Bank feeds: Cloud-based accounting systems can directly connect to most banks and collect transaction data, saving you the effort of manually typing every transaction. Make sure your bank or financial institution is properly supported. For example, I’ve seen some credit card feeds that are only partially supported resulting in slow feeds or connection errors.
Workflow: When you commit to a new software package there will be some necessary adjustment on your part. You’ll need to learn how to use the software to carry out everyday tasks such as entering invoices and receipts as well as produce your monthly or quarterly BAS and reports your accountant will need for preparing your tax return.
Multi-platform and mobile: Although you might do most of your accounting work on a desktop or notebook computer, a mobile app that works on your tablet or smartphone can be really handy for creating invoices and checking budgets or other data while you’re out and about.
There are lots of different cloud-based accounting packages to choose from. I’m focussing on the five I think are most likely to make your shortlist of options.
Free trial: Yes – 30 days
Price: Between $5 and $30 per month depending on features
Reckon has been in the accounting software business for many years. Its online offering, Reckon One, is hosted on servers operated by Amazon, and delivers an attractive online experience that works on computers and mobile devices.
The pricing is very competitive and Reckon is offering free conversion from competing products.
I started by creating a trial account using dummy data. Everyday tasks such as creating invoices, receiving payments, tracking account balances and outstanding payments were very straightforward. If you’ve used any accounting software before, you’ll find the interface quite intuitive.
The main dashboard displays your current financial position, top customers and expenses and bank account balances – you can connect Reckon One to your business bank account and receive live feeds. Every option or command is only a click or two away from the main screen.
On the reporting side, I jumped straight to the GST summary report that’s used to complete my quarterly BAS. The report loaded quickly with all the appropriate data loaded. Profit and Loss, Trial Balance and a Balance Sheet all loaded quickly as well. Reports are categorised but you can easily create shortcuts to your favourites so you need not go digging through the categories each time you need to load a report.
The mobile app – I tested the iOS version on an iPhone 6s, was easy to use. I was able to enter an invoice and email it directly to the customer while in the field. The mobile app doesn’t support the full Reckon One feature set. For example, you can’t generate reports from the app. However, this isn’t a big deal in my view as mobile workers will be focussed on operational tasks such as invoicing, expenses, competing timesheets and looking up customer contacts.
Reckon One does a great job of putting everyday tasks front and centre: 4/5
Free trial: Yes
Price: from $25-60 per month
Ask almost anyone if they can name a single cloud-based accounting system and it’s a fair bet Xero will be one of the first names they’ll mention. The New Zealand-based SaaS was founded a decade ago.
Xero was founded on the revelation that desktop accounting software was too hard to use. Rather than having business users in mind, older accounting applications were written with the needs of accounts foremost. When it was released, Xero was a revelation.
Like all the other applications we’ve looked at, Xero launches with a dashboard that displays the information the developers believe you need to have front and centre with activity buttons where you’d expect them. For example, there’s a dashboard panel with a list of outstanding invoices. On that panel, there’s a button to create a new invoice. The same goes with the “Bills you need to pay” and “Expense claims” panels. You can drag and drop panels to suit your preferences.
Connectivity to other SaaS providers is available from the Settings and checking out the Add-ins. There are add-ins for a number of different vertical industries such as education, hospitality, manufacturing, and not-for-profits. There’s also integration for various point of sale and payment systems.
Payroll is also included, although the entry-level subscription limits that to a single employee – which is fine for a sole trader. You’ll need to stump up for a higher subscription level if you have more staff. Automatic superannuation payment management kicks in at $50 per month and you won’t get multi-currency support without paying at least $60 per month.
Xero’s mobile app for iOS is easy to use and doesn’t try to shoehorn the entire online experience onto the smaller screen. Adding invoices and expenses is easy with the app limiting data entry to those two activities and the management of contacts – the key activities you’re most likely to need when on the road. The app uses Touch ID so it requires your finger or a PIN for access.
If you’re migrating from either MYOB or Reckon, Xero is offering a free data migration service.
It’s tough to beat Xero as it has a great UI, nice mobile app and great third party integration: 4.5/5
Free trial: Yes,
Price: from $15 per month
Saasu has grown up in the shadow of Xero. However, it’s a very competent application that you should consider.
Functionally, it’s very similar to the other players in this market. The main dashboard puts some key metrics right in front of you so you can focus on your business. A summary of your Profit and Loss report, cash-flow, and Balance Sheet are there along with outstanding invoices, with overdue items highlighted in red, and outstanding bills you need to pay. All those can be moved around so you can ensure the information that’s most important to you is easy to see.
The one thing that’s missing from the dashboard is one-click access to common activities. For example, to add a new invoice, I either need to go to the sales screen or click the add button on the top menu and then choose sale from the list of items. A simple “Add new invoice” button on the sales summary on the dashboard would be a far more elegant solution.
Saasu supports payroll, bank feeds and inventory management although the number of annual transactions you can perform, employees you can have and bank feeds varies depending on your subscription level. At $15 per month, you get 1000 transactions for the year, three bank feeds, no payroll or inventory management. For $180 per month, you get 100,000 transactions, 20 bank feeds, 100 employees and a slew of other features.
Mobile users aren’t left out with a nice mobile application that makes it easy to enter sales and purchases. However, I was annoyed at not being able to edit the GST code for a sale. I wanted to sell an item without charging GST and wasn’t able to change the code on the mobile app. I suspect that’s not a problem everyone will share but it was something I hit.
Saasu is a competent application but feels a little clunkier than the others: 3.5/5
Free trial: Yes – 30 days
Price: from $35 per month
Back before cloud software was a thing, it’s a fair bet that if you’d asked your accountant for advice about which accounting software you should buy for your business, the answer would start with some version of MYOB or another. As an Australian product, it has always been popular locally but it was quite slow to offer a cloud solution.
Essentials has gone through a few name changes from MYOB’s first forays into cloud software. But the current product is quite robust and easy to use. It has moved away from MYOB’s old “accountants first” mode of operation and is quite user friendly.
MYOB Essentials’ dashboard provides all the data you’d expect but presents it using plain English terms like “Money in” and “Money out”, “Invoices owed to me” and “Sales targets”. For those running a business who aren’t accountants – like me – that kind of language is very helpful.
Creating invoices, paying bills and other common actions are rarely more than a click or two away on the top menu. One feature I really did like is Essentials’ ability to store scanned documents. If I receive a paper bill from a supplier, I can scan and store the paper inside Essentials and link it to a payment so the entire transaction trail is in one place.
There are plenty of reports in the application, ready to go including the essential GST report for completing your BAS as well as Profit and Loss (with a graphical version in beta testing), Balance Sheet and Trial Balance so you can keep your accountant happy.
With so many accountants still preferring their clients to use MYOB, there’s an easy export function so you can grab all the data your accountant wants and send it off in a single file.
Unlike the other SaaS products I tested Essentials doesn’t provide you with sample company data to play with. The only way to use the free trial is to enter your own data into the application – a time consuming task if you’re in the process of simply shortlisting your options.
There’s a mobile app as well. MYOB on the Go lets you send invoices and receive payments while you’re out and about. It works with the MYOB PayDirect Reader so you can receive credit card payments. And through MYOB’s investment in point of sale system Kounta, you can also integrate a cash register solution.
It’s taken a while but MYOB has put together a nice service that will tick most of the boxes for business users and accountants: 4/5
Free trial: Yes, Monthly
Price: from $15 per month
QuickBooks is another stalwart of the accounting software game. Like the other apps I looked at, there’s an attractive dashboard that puts key data such as income (split into open, overdue and paid in the last 30 days), expenses and profit and loss in front of you as soon as you log in.
One thing I did like about the account creation process is that it sent a verification code to my phone rather than just relying on email. Once you create a free account – no credit card required – you can access a sample account so you play around with QuickBooks before entering all your own data. However, finding this data requires either searching for “sample file” in the help or browsing to https://qbo.intuit.com/redir/testdrive_au after you’ve logged in.
The plus sign on the menu bar gives two-click access so you can enter the most common business documents such as invoices, expenses and timesheets. Payroll is available but that’s an extra that’s only available in the more-expensive subscription options.
One thing I liked was the instant view of my GST status. With a single clock of the GST menu on the left side of the dashboard, I received an instant snapshot of what I’d owe the government on my next BAS. Similarly, there’s an instant snapshot of your bank account balances and how many unreconciled transactions there are in QuickBooks.
Creating invoices, receiving payments and other common actions were easy. There’s also an option for integrating PayPal into your invoices so you can receive credit card payments. Although PayPal’s fees can be on the high side, this can be useful for a business that’s starting up and not quite ready to set up a payment gateway with their bank.
The mobile app for iOS relies on two-factor authentication when it’s first used. Creating invoices, entering expenses and managing contacts were easy. The app supports downloading bank transactions making it one of the more fully-featured mobile apps in this category.
QuickBooks looks great and, outwardly, has a stronger focus on security than the others: 4/5