Accounting software (sometimes referred to as a general ledger system) is the backbone of your accounting function. It is used to help keep track of the economic transactions that your business engages in on a daily basis. Though the use of accounting software is not always required, we generally recommend that you should set up a basic accounting system as soon as you have raised funding from any outside investors. As soon as you take on investment capital, you have a fiduciary duty to those investors and should be able to regularly produce accurate financial statements to them. Each of the accounting software platforms mentioned below is cloud-based, easy to use and allows businesses to collaborate with independent accountants, which are the biggest requirements to look for.
QuickBooks Online is a web-based subscription platform available on desktop and mobile devices which requires neither previous accounting knowledge nor any software installations. It consolidates supplier, internal and customer data, making it easy to track sales, expenses and manage invoices. The platform also helps manage sales tax requirements while allowing different users predefined access levels from multiple locations.
With 1.3 million subscribers as of 2018 compared to QuickBooks Online’s 4.5 million worldwide in 2019, Xero may not be as widely subscribed as QuickBooks, but it is used in 180 different countries. The SaaS platform features near real-time cash reconciliation with over 200 banks and other financial institutions and has integrations with hundreds of third-party applications. This software also runs on mobile platforms such as Android and iOS.
Wave is a free platform which offers accounting, receipting, and invoicing functionality, including on mobile platforms. As well as the ability to integrate unlimited bank accounts and cards, Wave has a handy dashboard which provides a snapshot of the organization’s financial position. However, the software has limited inventory management systems. Additional functionality like online payments and payroll are on a per-transaction and subscription model, respectively.
All of these software tools are a good option, offering accounting, invoicing, project, and inventory features along with many other solutions. Connecting your clients bank, reconcile transactions, automatically classify entries, and manage it all in your ledger.
Leaving your accounting to chance is never something you want to do. Invest in the right software early on, and know when it’s time to upgrade, outsource, or find a solution that better fits your company’s needs as you grow.
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