Accounting software by and large falls into two categories: traditional software based, and cloud based. Traditional solutions do not need an internet connection; they involve a downloadable standalone program that can be operated from a single PC. In contrast, cloud accounting solutions involve a web based interface that can be accessible via any web browser on any device, which you can then use to access your financial data.
For this article, we take a look at the most popular accounting solutions, viz. QuickBooks Pro, Sage 50, Xero, FreshBooks, and Wave. With the exception of Wave, all other software solutions discussed here are paid solutions.
QuickBooks Pro: The best traditional solution
QuickBooks was the first software based accounting solution that really took on with the masses and did not require you to have a degree in finance to operate and it still is the champion of the domain. The entry level Pro version costs USD 299 and is the perfect offline accounting solution for small businesses. It is easy to use, has a comprehensive feature set, and it meshes nicely in your workflow if you already use other Intuit products like TurboTax. However, Intuit customer service is not up to everybody’s liking. Additionally, the entry level version has very restrictive limits on inventory related features.
Sage 50: A good alternative to QuickBooks
Sage 50 offers much of the same feature set that you get with QuickBooks with one tremendous benefit: its inventory management features are far superior to what you get with QuickBooks Pro. At USD 299, it costs the same as QuickBooks and also comes with an interface that you can customise with shortcuts to frequently used actions and features. Its customer service is also miles better than what you get with QuickBooks. However, it is not as beginner friendly as its competitor, and can be daunting for new users.
Xero: The best cloud accounting service
Xero is undoubtedly the way to go if cloud accounting services are what you need. It edges past its nearest competitor, QuickBooks Online, on account of its pricing, elegant user interface, and ability to synchronise with a number of banks and other third party software. It also has an excellent mobile app. Add in excellent customer service, and you have a winning formula that nets points with both expert accountants as well as business owners looking to do their own books. The basic “Starter” plan starts at USD 9 per month and goes all the way up to “Premium”, which costs USD 70 per month.
FreshBooks: A worthy competitor
FreshBooks puts up a fierce fight and offers some of the most accessible and easy to use tools for invoicing duties and managing projects. It is perfect for small service oriented businesses who do not require most of the traditional accounting tools, chiefly because FreshBooks is too barebones to handle serious bookkeeping duties. However, it has great customer service and excellent mobile apps. Plans begin at USD 19.95 per month and go up to USD 39.95 for the most expensive version.
Wave: A free alternative that gets the job done
If you run a very small business and you are satisfied with basic invoicing, billing, expense tracking, and payment services, Wave gets the job done at a sweet price of USD 0. Cloud based and accessible from any device you own, Wave is a great place to start for beginners. It is also capable of payroll facilities, but that is a paid add-on.