EXPENSE MANAGEMENT TOOLS
There’s a wide range of accounting software for a growing company to choose from, but if you’re not an accountant, you may miss out on each one’s unique subtleties.
Does it matter how customisable each account is? Will the software integrate directly with your bank feed through an API? Do all of these things even matter?
Here’s a quick bird’s eye view of the common accounting software options to help you make a decision.
To help you better understand what’s available, we’ve rated what we think is the best software in a range of categories:
The accounting software you ultimately choose will depend on your company’s unique needs, so read on to find out which you might be most compatible with.
We’ve started with this category because, let’s face it, the leading concern for SMEs and start-ups is keeping business expenses low.
And as far as affordability goes, Wave wins out for being free at the basic level. You get accounting, invoicing, and receipt scanning at no cost; and there’s no limit to the number of bills, invoices, receipts, etc. you can process. However, you do have to pay for payroll functions (costs for payroll vary by state).
Also note that Wave allows you to accept credit card payments directly from customers. Processing charges are 3.4 per cent (of the amount), plus US $0.50.
The next most affordable options are as follows:
*All prices obtained from the service providers’ US sites, and are accurate as of December 2019
More add-ons means more versatility. Add-ons introduce extra features to your accounting software, and Xero currently dominates this category.
As of 2019, Xero has more than 700 different add-ons available. Xero also integrates with Zapier (that’s a service that integrates your different web apps), so you can link up all your different accounting tools.
Some of the best-known Xero add-ons are Float, which provides a visual display of your business cash flow; Vend, which integrates with Point of Sale (PoS) devices to provide real time transaction data; and Fathom (transforms spreadsheets to easy-to-read visual graphs).
Of course, other accounting software have add-ons as well. QuickBooks, for instance, has a particularly famed Acctivate add-on; this is an inventory management system that’s fantastic for retailers to track stock. But we ultimately give this category to Xero for the simple range of add-ons available.
One advantage of using cloud-based accounting software is ease of accessibility—you don’t have to be tied down to one computer to access business information. And with smartphones, you can check on your business anywhere in the world.
QuickBooks and Sage both have the most highly rated mobile app functions, rated from 4.5 to 5 stars on Android and iPhone stores*. In both cases, the mobile apps let you view business accounts, including invoices, receipts, and customer data. They also allow you to send invoices directly through email, check your company spending, and pay business bills with a few quick taps.
Complaints regarding the other platforms mostly come to confusion over separate apps. For example, the separate apps for Xero Expenses and Xero Projects are sometimes mistaken for each other; and Wave is currently working on a single app that will tie in all its current (separate) apps).
This being said, note that there's an unavoidable degree of subjectivity in gauging the usefulness or intuitiveness of mobile apps. Some Wave users like having different apps for different functions, for example.
*As of December 2019
Xero has the upper hand on the basis of uptime (i.e., the time in which the cloud is up and running; this is never 100 per cent due to maintenance), allowance for unlimited users, and automation.
Simply put, Xero allows unlimited users at all pricing levels, whereas Sage requires you to move up a tier (read: pay) for that. Xero is also well known for its reliability. It has 99.97 per cent uptime, which is vital for a bigger business with more complex ledgers and transactions.
Xero also banks heavily on automation as a selling point. For example, it has smart tools that search out and match bank transactions to whatever you key into the software—and it becomes better able to predict these matches as you use the feature more. This may not seem like a big deal for smaller businesses with relatively few transactions. But once your company scales up, this sort of automation becomes a major time saver.
It isn’t here because “ease of use” is so subjective, it’s almost impossible to qualify. For example:
If an invoice has already been paid, Xero doesn’t let you change it by adding new items, prices, or quantities. Wave, on the other hand, will allow you to change whatever you like. Which of the two is better? It’s entirely up to you: some people will be furious at a system that (to them) lacks flexibility; but some will point out that the system _shouldn’t _let you make such changes (you might mess up previous records, and cause an accounting disaster).
The deciding factor here is down to you. Ultimately, use the system that you find easiest to understand. This may mean switching around a bit at first until you find the right fit.
One of the first things most business owners look for is integration between PoS, or real-time updates to their ledgers for each transaction. This makes sense, as you don’t want to spend hours poring over receipts at the end of every week.
Fortunately, all of these accounting tools can be integrated with systems like Spenmo, which automatically updates your accounts with real time data on every transaction. Spenmo allows you to issue a Spenmo card to employees, giving you complete transparency and control over business expenditures. When used in conjunction with a robust cloud-based accounting software, it can offer you disciplined and measured spend management.