Top 5 Accounting Software in 2022

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What is accounting software?

Accounting software provides automated solutions for keeping track of and managing a startup's financial transactions. It comes to the aid of bookkeepers and accountants whose responsibility is to analyze and report financial transactions.

Accounting software, thus, makes this process easy by:

Simplifying calculations.
Leveraging old accounting records for efficient audits.
Giving physical office space some relaxation by making physical data redundant (as it stores all records online).

Accounting software also ensures you are ready for tax filing and audits (both internal and external).

Why use accounting software?

Accounting software should be used because:

It drives your firm towards greater efficiency by making sure you don't miss out on essential accounting details in the process of establishing your startup in the current marketplace. Accounting software lets you get done with your bookkeeping almost instantly to focus on other essential tasks without worrying about the management of accounts.
It saves time by automatically calculating the total of all your business transactions. Accounting software keeps all information regarding financial transactions in one place so that delving into old files is not required, thus saving you time and allowing you to be sure that all the data has been taken into account from one concrete source of storage.
It gives you an error-free picture of how your business is doing by successfully analyzing all financial transactions. Calculations are automated and leave no scope for ambiguity regarding the facts or figures which concern the business's bottom line. In addition, you can analyze your overall financial history and establish patterns for growth and development using accounting software.
It saves up on the rent and other costs you incur for huge office spaces to store old files. All accounting information is stored in one place and can be easily accessed.
Accounting software makes preparation for audits and tax filing easier by the efficient organization of business transactions that do not need to be checked repeatedly to file taxes properly. Accounting software leaves no scope for error in terms of missing receipts or errors in evaluating your deduction options. In addition, you can also save up on what you pay to your tax preparer. Manual bookkeeping has more chances of error that might cost you enormous fines if discovered during an audit. In such cases, accounting software provides audit-ready data.

What criteria to evaluate when choosing accounting software?

#1. Cloud-based accounting

Accessibility is a significant attraction when choosing good accounting software or updating from a manual to an automated substitute for accounting. Cloud-based accounting software providers allow you to access your accounts from wherever you are, with only a stable internet connection. Such software providers also enable you to delegate your bookkeeper or accountant access.

#2. Integrations

The ideal accounting software will provide seamless integration with your bank and other service providers, so you draw the maximum benefit from automating tasks. It should seamlessly integrate with services you already use, such as bookkeepers, CRMs, payroll service providers, shipping services, and so on.

#3. Security

Accounting software stores all your financial transactions. Therefore, the software needs to have security measures to protect your data. Accounting software should also enable you to define access to each user based on responsibility so that no unsolicited activity is possible.

#4. Pricing

The ideal accounting software will charge you based on the number of users or features you access. The ideal vendor will allow you to upgrade to advanced options as your business scales and have opportunities for increasing the number of users if need be. Pricing should be transparent and scalable upgrades should be permitted, so you don't have to completely replace the software and start your entire payment system from scratch.

#5. Ease of use

The twin hassles of manual accounting and bookkeeping have led you to switch to an automated process for the same. Accounting software must further your tasks without introducing unnecessary complications and must be easy to use, so you don't end up spending as much time learning to use the software as you did in manually keeping accounts.

#6. Standard Reports

The provision of standard reports by your accounting software can be a significant add-on; these reports could be a general ledger report, tax reports, profit margin reports, and so on. Through these reports, you can get a clearer picture of your business.

Top 5 Accounting Software in 2022

Freshbooks

Description: Accounting software that leverages accounting tasks from all ends, such as invoicing, time tracking, payments, and reporting.

Best for: Small and medium-sized businesses, freelancers, businesses with contractors and employees.

Cost

Four plans are available at varied prices:

Lite: 6 dollars per month for 5 billable clients.

Plus: 10 dollars per month for 50 billable clients.

Premium: 20 dollars per month for unlimited billable clients.

Select: Custom pricing available for specialized features.

The first three plans come with a free trial.

Additional payments are levied for Gusto Payroll, advanced expenses, and team members (per person).

Evaluation of key criteria:

Cloud-based accounting: Yes.
Integrations: Available with almost all services. Notable integrations include Airtable, PandaDoc, Bench, FB Apps, Tallyfor, CashFlow Frog, Dropbox, Shopify, among others.
Security: Transactions secured by Secure Sockets Layer encryption.
Ease of use: Yes.
Standard Reports: Available, such as Sales Tax Summary Report, Profit and Loss Report, Accounting Report, and many more to let you know how your business is doing, all on one dashboard.

Pros

Ready to use invoices.
The robust auto email section notifies you about late fees, payment(s) to be made, etc.
The option to increase users is available at a comparatively lesser price.

Cons

Occasional delay in loading larger volumes of information.
Some mobile app features do not work as well as the others do.

QuickBooks Online

Description: Accounting software - designed mainly for small businesses - works efficiently by providing innovative accounting tools for book and expense management.

Best for: Small businesses in all industries.

Cost

Four plans are available at varied prices:

Simple Start: 12 dollars per month.

Essentials: 25 dollars per month.

Plus: 40 dollars per month.

Advanced: 90 dollars per month.

Add-ons for payroll are available with all plans.

A 30-day free trial is available.

Evaluation of key criteria:

Cloud-based accounting: Available.
Integrations: Fathom, Amazon, QuickBooks Time, Bill.com.
Security: Bank-level security of 128-bit SSL encryption to keep data safe. Accountant access is available.
Ease of use: Yes.
Standard reports: General reports based on business performance, financial reports, and inventory reports enable small businesses to implement intelligible business solutions are available.

Pros

Automatic backups ensure that you are always up-to-date with accurate data.
Quickbooks Online supports multiple currencies.
Allows clients to pay invoices online very easily.

Cons

The cloud-based version costs a lot more than the desktop version (but users specifically vouch for the features the cloud-based version provides).
Occasional initial complexity.

Zoho Books

Description: Online accounting software enables you to make informed business decisions by efficiently monitoring your expenses and providing tools to manage them.

Best for: Small and medium-sized businesses.

Cost

Six plans are available at varied prices:

Free: 0 dollars

Standard: 10.05 USD per organization per month, billed annually.

Professional: 20.12 USD per organization per month, billed annually.

Premium: 40.24 USD per organization per month, billed annually.

Elite: 67.08 USD per organization per month, billed annually.

Ultimate: 107.35 USD per organization per month, billed annually.

Evaluation of key criteria:

Cloud-based accounting: Yes.
Integration: PayPal, RazorPay, 2Checkout, Zoho CRM, Zoho invoice using the ZSC key.
Security: Provision to delegate or edit user's access to Personally Identifiable Information (PII) and the option to encrypt the same based on the degree of sensitivity of the information in question.
Ease of use: Yes.
Standard reports: Available, 50+ inbuilt reports such as tax reports, audit trails, and general business reports showing the startup's progress.

Pros

There is an option to customize and schedule business reports, so you automatically receive them in your email at the said time.
Provision to collaborate with your accountant in real-time.
It is ideally suited for small businesses.

Cons

Occasional glitches in the multi-currency acceptance features.
Provision to send quotations is desired.
Manual vouchers are time-consuming.

Sage Business Cloud Accounting US

Description: Accounting software that automates workflows to enable ease of management with respect to accounts.

Best for: Small businesses based in the U.S.

Cost

Two plans are available at varied prices:

Sage Accounting: 7.50 dollars per month.

Sage Accounting Start: 10 dollars per month.

Both plans come with a free trial.

Evaluation of key criteria:

Cloud-based accounting: Yes.
Integration: Stripe, Zapier, RBC PayEdge, etc. SAGE also facilitates bank reconciliations.
Security: Secure access to multiple users, including accountants. Data in transit is protected by Transport Layer Security encryption, encryption of backups, and ISO 27001 audit program.
Ease of use: Yes, no previous experience required.
Standard reports: Available on a single dashboard, including reports on cash flow and balance sheets with a feature to share and compare them with current business trends.

Pros

SAGE supports multiple currencies.
Easy to use bill payment features.
Excellent customer service.

Cons

More options are desired for integration with payroll providers.
Customization reports need more development.

Xero

Description: Accounting software simplifies tasks around finances with crucial features such as inventory management, claiming expenses, and a host of other features required for running your business smoothly.

Best for: Small and growing businesses.

Cost

Three plans are available at varied prices:

Starter (ideal for new businesses and sole traders): 22 USD per month.

Standard (suitable for growing small businesses): 35 USD per month.

Premium (suitable for established companies of all sizes): 47 USD per month.

Optional add ons are available for all three plans.

Evaluation of key criteria:

Cloud-based accounting: Yes.
Integration: CRM tools, Go Cardless, and Stripe. Apart from these, Xero can connect to your bank account to streamline the banking process.
Security: Several layers of encryption. SOC 2 Compliance.
Ease of use: Yes, simplicity of basic accounting with the comprehensive approach of an automated service provider.
Standard reports: Up-to-date reports can be customized and compared in real-time. Collaboration with advisors is also available.

Pros

Xero's user interface is intuitive.
1099 reporting is available.
Effortless preparation of annual financial statements.

Cons

The scripts for automated accounting processes are not as robust as they might be expected to be.
User functionality needs to be defined better for enabling multiple users' access.

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Note: Our content is for general information purposes only. AbstractOps does not provide legal, accounting, or certified expert advice. Consult a lawyer, CPA, or other professional for such services.