Cloud Based Bookkeeping Software for Small Businesses
It’s tax time. Which means it’s time to turn your shoebox full of receipts and bank statements into meaning information your accountant can use to prepare your tax return. Let’s face it, most small business owners do not go into business because they enjoy bookkeeping. Let’s talk about some online small business bookkeeping software options to help keep your financial records organized and relieve your bookkeeping headaches.
Cost: Free – $39.95/month
FreshBooks is a great online bookkeeping solution for small business owners. They started as an invoicing/billing service so those features are top-notch. Small business owners can send professional looking invoices, set up recurring invoices and payments, receive online payments, track employees & contractors time, and have FreshBooks automatically send reminders to your slow paying customers. They can even help small business owners manage sales taxes.
FreshBooks doesn’t stop at the invoicing and billing side. They also have an expense tracking feature to help you manage your bills, checks, and expenses. To save on data entry time, they offer the ability to import your expenses from your bank via a CSV or QBO file.
Best of all, it’s an online service meaning you have access to your financial information at anytime and from anywhere.
Cost: Free – $9.95/month
Outright is a very basic online bookkeeping software that lets you organize your small business finances. Outright is perfect for Ebay and Etsy sellers who started a small business as a hobby. It’s strictly for sole proprietors and single member LLC’s with basic bookkeeping needs. A cool feature is that Outright can link directly to your Ebay, Etsy, PayPal, bank, and credit cards, allowing you to automatically import your transactions, which eliminates the hassle of data entry. Outright will also automatically categorize your transactions, saving you even more time.
Outright offers useful financial reporting tools section that even provides business owners with the ability to put their financial data into graphs for visuals on how your business is doing. Outright also helps small business owners understand taxes by helping track sales tax, tools to calculate your estimated quarterly tax payments, and tools to assist with figuring out your annual taxes.
The biggest drawback is the lack of an invoicing feature and there is no ability to track your accounts payable (bills due in the future).
Overall, Outright is a better solution than using a spreadsheet or your bank statement to track your business finances. It’s a great solution for mompreneurs and other small business owners selling their hobbies on Ebay and Etsy.
For a brand new online accounting service that just launched about a year ago, I was really impressed with what Wave Accounting has to offer small businesses! From the start, you can set up your account to fit your specific industry. Just like the other packages, Wave has invoicing and billing features, allowing small business owners to track money owed from their customers, offers users an expense center to record your bills and expenses, and allows you to keep track of your bills due. Wave Accounting also has a very useful reports section that allows you to run financial statements (including a balance sheet!), Sales Tax reports, income by customers, expenses by vendors, and you can track your gains/losses on foreign currency exchanges. Similar to the other accounting packages out there, they also allow you to connect your bank and credit card accounts to automatically download your banking transactions, eliminating the need for data entry.
There are a couple of features that really stand out. First, your dashboard has a lot of great financial information about your business shown in graphs, providing the busy small business owner with a quick and useful glance at their finances. Secondly, Wave Accounting also has a separate tab to track your personal finances. Lastly, they are getting ready to launch a payroll service in the US, which will allow small business owners the opportunity to streamline their bookkeeping and payroll.
The biggest downfall is that Wave Accounting is not set up with any merchant processors, so your customers are not able to pay your invoices online. However, they do integrate with FreshBooks, so you could always use FreshBooks for your invoicing needs, if accepting payments online is important to your business.
Overall, I think Wave Accounting offers small businesses with a great way to manage their accounting, at a very affordable price (free)!
Cost: free trial, $19-$39/month
If your business is looking for a full accounting package with lots of bells and whistles, Xero is the tool for you! They are one of the few online accounting services that really offer all the accounting tools that small and mid-sized businesses need. They offer a couple different packages, allowing their accounting services to grow with your business! As with the other services discussed above, Xero can handle your invoicing/billing functions, can track your expenses, has good financial reporting tools, offers the ability to link with your bank accounts, credit card accounts, and PayPal accounts for effortless downloading. They also can automatically code your entries, saving business owners even more time!
What sets the bar high for Xero is their additional features! Businesses can track their fixed assets and depreciation and they also offer inventory tracking. To really customize your accounting solution, Xero has an impressive list of add-on’s. Some of the add-on’s include payroll, to job tracking, to time tracking tools, to point of sale features, e-commerce, etc.
Their detailed dashboard is a perfect tool for small-mid sized business owners. You can quickly see your bank balances, receivables, and check out the bills that will be due soon.
If you’re looking for an online system to replace QuickBooks or that offers the usefulness you’re used to with QuickBooks, Xero is definitely an accounting package worth considering. Since it’s online, your software is always up-do-date and you can access your finances from any mobile device!
Cost: free trial, $12.95-$63.16/month
Intuit’s QuickBooks products are the most commonly used accounting solutions for small and mid-sized businesses. Intuit sells a great accounting product and offers various packages to fit the individual needs of your business. A big plus to QuickBooks Online is you can start small and then expand your packages as your business grows. Their online bookkeeping software includes all of the standard bookkeeping and accounting tools that the other services listed above offer (invoicing, expense tracking, financial reporting, dashboards, tracking sales tax, etc).
The biggest downfall to QuickBooks online is that the online banking feature is not offered with the basic package. So you find yourself quickly upgrading to the higher packages. Another downfall is that the Online version is not as robust as the desktop version that most businesses are used to working with. However, creating software to work online is very different from the standard desktop model. I give props to Intuit for moving to the cloud and providing their users with a cloud based accounting software.
In closing, there are a lot of great online bookkeeping tools out there ready to assist with your accounting and bookkeeping needs. There are services that are designed to help with small hobby type businesses such as Ebay & Etsy sellers, to services that excel in invoicing/billing features, to services based around bank statement accounting, and services that offers a full accounting software package. Taking your bookkeeping to the clouds, provides you with the flexibility of being able to work on any device (desktop, laptop, Mac, and mobile) while also having access to your accounting information from anywhere and at anytime!