What’s the best accounting software for a small business? What are the options? Is it better to have the data on your own computer or have it on an internet-based application?
thanks
What features should I be looking for?
I think it’s pretty hard to beat QuickBooks, although it has its quirks (mostly because Intuit can’t make a drink coaster without quirks). You can still get the local-app version although they’ve been pushing hard to move customers to the net/cloud/subscription model.
I’ve used it for 20 years and never been annoyed by it enough to try any of the others.
Another vote for QuickBooks as a good all around software. If you have specific needs or a certain price point, however, there are other options.
As stated, it’s tough to go wrong with QuickBooks. There are other programs that might rate higher in ratings, but everyone knows QuickBooks so it’s easy to find support or accountants-for-hire. If you want to look elsewhere, I hear good things about FreshBooks.
I’d definitely recommend a cloud offering. Most companies, including Intuit, are focusing efforts on the cloud product, so those will see more enhancements over time. It’s also generally easier to interface with other systems like your bank with the cloud version.
I’ve used Wave Accounting for our tiny non-profit; I’m very impressed with the cost-to-feature ratio. It is browser-based.
I’m impressed by all the recommendations for Quick Books, but I looked at their page and at this point it seems way too expensive for the size of the operation.
Is it really free or are there hidden costs?
QuickBooks Online starts at $10/month for the entry version. What is the size of your operation that makes this a prohibitive expense?
Wave truly is free for what they provide. Note that credit card processing and payroll processing will cost additional, but this is true of QBO as well.
I’m not looking into this for myself. The person who Is starting the business:
- Absolutely won’t pay a monthly fee for it, so I was looking into getting the download for her.
- Doesn’t trust the cloud.
- Is primarily opening shop, for now, to have a studio to herself. Actual sales in the next year might be zero, even though the long-term goal is to be a full-time artist. I just want her to be in the habit of keeping books so that all her ducks are in a row when sales start happening.
If that’s the case, then Excel. You can set up pretty elaborate data tracking sheets for excel and if it’s a small operation, it works just fine. They should have a working knowledge of how to use it and what they should be tracking, but you can absolutely run a small business like you describe as a starting point before investing a lot.
Another vote for Quickbooks. You said you want to stay away from monthly fees, so that makes the online version moot, but I’d avoid it regardless, not only due to the the monthly fees (that could rise unexpectedly) but also, from what I’ve heard, the unexpected and regular outages and the fact that they could, should they want, hold your data hostage.
Now, back to regular desktop Quickbooks. I’ve been using it for a long time, probably over 20 years and there are a few things that you need to know. It is expensive. Samsclub is typically the cheapest place I can find it. The 2017 (Pro) version at Sams Club is about $180. Anywhere else you’re looking at $200-$300, not counting any sales you may be able to find.
The nice thing with Quickbooks is that (virtually) every accountant can work with it. If you have a question you can call or email your accountant and they can walk you through exactly what to do. From time to time you send them a copy of the file, they make their adjustments, send it back to you and you do a restore (just don’t make any changes while it’s out). It’s got some quirks, but many of them are easy to find workarounds for on the internet.
For the first time user, there may be some surprises. First off, they sunset each version every few years. IIRC it’s every 3 years. That means if you buy 2017, you may forced to upgrade to the 2020 version. Second, each one that you buy allows for one user (kinda). So if you have 3 people that are regularly signed into it, you need to buy 3 of them. Plan to pony up about $600 (every 3 years). You can have more than 3 users with 3 licensee, but only 3 can be logged in at once. Be careful not to underestimate what a PITA that may be to assume you’ll be with less than what’s actually necessary. Third. every few months the software will alert you that an update is required. Don’t do it until you have time to knock all the users off for an hour or so. Sometimes it’s quick and painless and you can do it one at time. Sometimes it takes quite a while and once you do one, the other ones can’t log in until they’ve been updated as well.
Finally, and this is the most important, if you opt for (and I highly recommend) Enhanced Payroll, there’s steep and ever increasing yearly fee. This year it was about $600. Next year I expect it to be about $650. However (and I do think it’s steep), it does cover quite a bit.
So, if you’re using the payroll portion of it, you should assume it costs not $200, but rather $800 plus an additional $200 for each additional licenese. But I’ll still tell you that it’s worth it.
I understand Peachtree is good as well, but I’ve never worked with it.
We (or at least I) need more information on how exactly the accounting software is going to be used and if the end user has an established accountant, it would be a good idea to ask them for input since they’ll be working with it as well.
But one question I can answer, based on my personal opinion is to get desktop software and back up regularly. I got handful of cheap jump drives and keep them in my car. About twice a week I grab one, do a backup and toss it in my pocket. It ends up sitting at home on my kitchen table and once I have two or three there I put them back in my car where I’ll see them and start over.
I know this is a bit long winded, but, like I said, I’ve been using Quickbooks for a long time, if you have questions feel free to ask.
Upon seeing the most recent post(s), I don’t know that it’s worth it to buy such expensive software for a business like that. QB is great for small business and it is designed to track income and expenses, generate reports/income statements, record banking transactions etc. However, even $200 for 3 years is a lot of money for someone that, based on what you’re saying, could very easily (no sarcasm implied) track all this stuff on some notebook paper, possibly with the help of an Accounting 101 class to understand some of the basics such as how to create a P&L or BS or what double entry bookkeeping is.
Again, I’m more than happy to help with any questions that I know the answer to, but I’d suggest putting off QB until some actual real money starts rolling in and for now save receipts for expenses, write down income, make sure everything matches bank statements and, for the love of god, have an accountant.
Asked about Wave Accounting:
Yep, the accounting is really, really free. I’ve used them for over 3 years and never paid a dime, and have never been asked to.
How do they do it? They offer non-accounting add-ons, like payroll and credit card merchant processing. Completely optional.
Thanks guys! I suspect that Excel might be the thing for now.
I’ve never looked, but I’d be willing to bet there’s pre-made excel (or OO) sheets for this. I don’t know how much you or she knows about excel, but even just using it to track a column of expenses, a column of income and a column for banking will require creating some formulas. Nothing big, but it also doesn’t take much for an excel formula to be wrong and you not notice it. So make sure she’s backing up often, you really can’t do it too often. In fact, it’s a somewhat common practice to backup before you do (or try) something so if it doesn’t work you just revert back. Also, make sure, and I recommend this to everyone for so many reasons*, she has an accountant and they give the spreadsheet a once over to make sure it looks okay.
I’ll also reiterate that it wouldn’t kill her to take some kind of accounting class, just to get the basic concepts if she’s not familiar with them.
*I’ve had friends eschew that idea for whatever reasons only to be utterly surprised when I mention to them them the various taxes and deadlines involved in having a small business. Sure, it costs money, but for a small business, it’s not like this is an in house thing, it’s someone that that glances at your books a few times a year, maybe cleans them up a bit, and does/reconciles your taxes at the end of the year (provided you’re doing them throughout the year).
Almost more importantly, it gives you an established relationship with a CPA. What do you do when you get a letter from the IRS asking for $10,000 or you one day realize that there’s something (honest mistake) wrong with your books and you need help sorting it out. When you have a CPA, this can be cleared with a 5 minute phone call/email. What if you don’t have one?
Every business should have a CPA, you can even (as I do) handle the bulk of the book keeping yourself, but it’s something you need to have.
ETA, when it comes to money, if she doesn’t already have the MS Office Suite, OO Calc is probably 95% of the time and it’s 100% free.