What Is a Good Accounting Software for Small Business?

Choosing the right accounting software is crucial for small businesses. Having good bookkeeping software enables one to manage finances, track expenses, and generate reports. Accounting solutions can make a difference for most small businesses in the vast array of financial issues they face in the US. This article will help you understand what to look out for in the best financial software for small businesses.

01 | Types of Accounting Software for Small Businesses

There are some accounting software that, in one way or another, can suit small businesses. Each type has its features and benefits, making them unique for finance management. Some of these categories can even be used as accounting software for CPA firms in certain aspects. Here are the most important types of accounting software:

General Accounting Software

This software category is aimed at basic accounting, such as keeping records of income and expenses, preparing invoices, processing payroll, and creating financial reports. It will suffice for most small businesses requiring basic bookkeeping and can be used by accounting software for small CPA firms for internal accounting. 

Inventory Management Software

This software mainly caters to companies that maintain an inventory. It makes provisions for monitoring the level of inventory, ordering restocking automatically, and providing control over storage and processing costs. This is mainly useful to retail businesses and manufacturing companies and for CPA firms if they work with clients who need inventory management.

 Project Management Accounting Software

This category of software is oriented explicitly to project management accounting. It aids firms in tracking the costs and revenues of projects, managing project budgets, and project profitability computation. This will be particularly useful for service-based companies and construction firms. It can be useful for CPA firms that work on projects for their clients, especially in the field of consulting. 

Industry-Specific Accounting Software

Some industries have unique accounting needs that cannot be comprehensively addressed by general accounting software. Industry-specific accounting software is tailored to meet all the requirements of an industry, be it construction, healthcare, hospitality, or any other. Tailored to the needs of specific industries, this software can be useful for CPA firms serving clients in those industries. 

Cloud-Based Accounting Software 

Cloud-based accounting software allows access to financial data from anywhere in the world with an internet connection. Thus, flexibility and mobility are very convenient for a business person to work on their finances from any part of the world. This also provides real-time updates and data synchronization. 

Enterprise Resource Planning (ERP) Systems

ERP systems combine accounting with other business processes like inventory, human resources, and customer relationship management. While enterprise resource planning is more common within larger businesses, there might be times when small businesses will be justified in using their fully featured functionality. Although ERP systems are more commonly used by larger companies, CPA firms can use them to manage complex operations and clients.

Free and Open-Source Accounting Software 

Free and open-source accounting software is one of the options small businesses turn to when they do not have a significant budget to outlay on more complex systems. Such solutions, generally carrying basic accounting features, can be a makeshift start for companies searching for cost-effective software. 

Accounting software differs in features and benefits, so small businesses should consider what they seek to attain in their choice of tool.

02 | Key Characteristics of a Good Accounting System

Good accounting software should have the following essential features:

• Income and Expense Tracking: This gives you the capacity to monitor the financial health of your business. You can record any transaction affecting the industry, either incoming or outgoing. Proper income and expense tracking are significant since they help one understand the profitability of a company and make well-informed decisions concerning money.
• Report Generation: Financial reports inform the understanding of business performance. These reports are based on profit and loss, balance sheets, and cash flow statements. They reveal the financial health of your business and guide you in making interventions.
• Task Automation: When automated, such tasks—invoices, payrolls, and calculations for taxes, among others—repetitions are set without human intervention and, therefore, save time that the process might reduce. Automation ensures that business transactions are processed without much delay, enabling you to focus on growing the business. 
• User-Friendly Interface: The software should be easy to use, even for persons not so tech-savvy. You can navigate through it and apply all its features according to your abilities to the fullest. A friendly user interface reduces this learning curve and correspondingly enhances productivity. 
• Integration with Other Systems: Best accounting software will integrate well with other systems, such as synchronizing with your bank accounts and customer relationship management (CRM) systems. This facilitates good integration in such a manner that all financial details are updated on both ends. 

03 | Understanding Business Needs

Before choosing accounting software, it's important to understand your business needs. Every business is unique, so consider the following:

• Size of the Business: The type of software needed by a business will depend on the size of the business. Features provided by most large companies may be redundant and unnecessary for small businesses. However, you have to consider the software that will support your business growth. The companies may be using simple accounting features to start but grow to require inventory management features.

• Business Type: Different industries have different accounting needs. For instance, a retail business provides inventory management, while in a service business, time tracking is more of a necessity. Understanding your specific home industry requirements will help you pick the right software. 
• Special Accounting Tasks: Seek the particular tasks that you will need the accounting software to perform for you. These could range from tracking expenditures to managing payroll, preparing invoices, or tax preparation. List your particular requirements to seek a match within the software.

04 | Important Features of Good Accounting Software for Small Businesses

Here are some important features that are particularly beneficial for small businesses:

• Mobility and Accessibility: Look for a web-based solution that can be accessed from any point over the cloud. This is particularly useful if your team is distributed or you just need to stay on top of the numbers from anywhere you are. Cloud-based solutions allow for flexibility and access to data in real-time. For example, you would be able to access that accounting software application through your smartphone or tablet, which will enable you to keep trade of your finances even if you are not at the office.
• Scalability: Select software that can increase your business. Your business will scale beyond today's size, hence, the requirements for your accounting software will also grow. Scalable software easily adapts itself to your changing requirements without going through an overhaul. You might start with a smaller plan and scale up once you expand.
• Support and Updates: Make sure the software has reliable customer support and regular periodic updates; this helps you address your issues promptly and keeps the software up-to-date with some new figure characteristics. Good support and updated software help it remain valuable and secure. 
• Data protection: Financial data is sensitive, so the software should have strong security measures in place. Some of the protective features are encrypted data, secure login, and regular backups. Protecting your financial information is the most paramount way to mitigate data breaches and maintain your clients' trust.

05 | Our List of Best Online Bookkeeping Software for Small Business

Here are some examples of accounting software that are suitable for small businesses. All these solutions can be used as software for accounting firms for both internal accounting and customer services. This section includes a comparative table to help you understand their features better.

• Fiskl: Fiskl offers mobile applications, including expense tracking and invoicing; it is user-friendly and allows good integration. Fiskl best suits on-the-go businesses and provides business owners or managers who frequently travel to do their businesses efficiently. For CPA firms, Fiskl can be particularly useful due to its mobile accessibility, enabling accountants to manage client accounts and expenses remotely. The user-friendly interface and integration capabilities make it a valuable tool for CPA firms handling clients with mobile and dynamic business operations.
• Patriot Accounting:  Patriot Accounting is simple to use and best known for payroll management, which has fundamental features. It suits small companies. Patriot Accounting is offered at a very affordable price. Coupled with impressive support, this accounting software is a perfect choice for those who want the most inexpensive package. For CPA firms, Patriot Accounting’s payroll management and affordability make it ideal for managing payroll services for small business clients. The simplicity and cost-effectiveness ensure CPA firms can efficiently handle payroll without extensive overhead costs.
• ZarMoney Cloud Accounting: The features are rich, with the possibility of cloud connecting and being bundled in with inventory management. And, ZarMoney Cloud Accounting is scalable and most suited to growing businesses. This solution can be beneficial to retail businesses because of its feature in inventory management. CPA firms can leverage ZarMoney Cloud Accounting for its scalability and comprehensive features, particularly when dealing with clients in the retail sector. The cloud connectivity and inventory management capabilities support efficient accounting practices for growing businesses.
• Zoho Invoice: With customized invoices, it best fits well with other Zoho apps and integrates automated reminders wherever the need arises. Zoho Invoice has advanced invoicing features, the computerized reminders bring in zero late payments and make cash flow seamless. It benefits many CPA firms where advanced invoicing and integration capabilities of Zoho Invoice come in handy for their practice. The automated reminders provided by Zoho Invoice are very vital to efficient client invoicing and management because avoiding late payments and improving cash flow management for the smooth running of a CPA firm.
• SaasAnt Transactions: Best suited for businesses witnessing large transaction volumes and handling heavy data. Its automation feature could save a considerable amount of time spent for companies with a large amount of transaction volume. For CPA firms, SaasAnt Transactions is highly beneficial due to its ability to handle large transaction volumes and automate data import/export processes.

06 | How to Choose the Right Software

Here are some tips to help you choose the best small business management software:

• Compare the Сosts of Different Software: Consider both upfront costs and recurring subscription fees. Ensure the software is affordable. Some software may come with a lower upfront price, but with a higher monthly fee, so calculate the total cost over time.
• Try Free Trials: Most vendors provide a trial software version. Use these trials to test features and evaluate if the software fits your needs. This might give you more insight during the trial period into what all the software can do. For example, you can test if it's easy to generate reports or how user-friendly the interface is.

• Read User Reviews: See if there are any reviews by other small business owners—this will help you feel the pulse of how the software performs and whether it's reliable. Most of the time, user reviews point out experiences in practice or joint problems. You might find that the review says customer support quickly responds, or frequent bugs are inside.
• Check for Support and Updates: Make sure the software has reliable customer support that comes, at best, with regular updates to enable you to solve problems and update your software quickly. Good support and updates are essential in maintaining efficiency and security in your software. For example, frequent updates might include new additions that improve functionality.
• Consider Integration Needs: If you run any other software, ensure that this accounting software will integrate well. This will save you a lot of time and minimize the risk of error. Such integration ensures smooth flow between different systems. For example, while using a CRM system, one would want accounting software capable of automatically synchronizing customer invoices and payments.

07 | Conclusion

Accounting software to manage small business finances is one of the very essential things. It looks out for features required, satisfies special needs unique to your business, and gives you a cost that suits your budget. Use the comparative table to understand how some of the most popular options run parallel and choose accordingly which fits your business. The finest accounting software advances work efficiency, reduces mistakes, and gives surety over financial decisions. Equally so, seek the best small business tax software and best computer software for small businesses.

08 | FAQs

How can accounting software for small business help with tax management?

Tax software for small businesses can calculate taxes automatically, generate tax reports, and notify them of the deadlines for their payment. All this makes it very easy to prepare and then file the tax returns.

What additional features might be useful in accounting software for small businesses?

Such additional features would be integrating payment systems, multi-currency support, tracking customer and supplier debts, and financial analysis with forecasting tools.

How does accounting software assist in cash management?

It can track cash flow, provide reports on the existing cash balance, and project future cash flows. This will allow for better financial planning to prevent a lack of money.

How does accounting software for small businesses improve customer relations?

These tools can automate invoice generation and sending of payment reminders, providing excellent cash flow and increasing customer satisfaction. Some tools even offer an online payment gateway for clients working with their invoices.

Which software is ideal for CPA firms needing mobile access to accounting tools?

Fiskl is ideal for CPA firms needing mobile access to accounting tools. It offers mobile applications for expense tracking and invoicing, making it convenient for accountants who need to manage finances on the go.