Which Bookkeeping Software is Right for Your Business

You are in charge of your business's finances, and you know that bookkeeping software can be an essential tool for managing your money. The problem is there are so many different programs to choose from! So which one should you use?  This blog post will walk you through the pros and cons of each program to help you make the best decision for your business.

The three most popular options are Quickbooks, Xero, and Wave Accounting. However, a few key differences between these three softwares might affect which one is right for your business. So let’s take a look at them now!

Do you have a business? Do you need bookkeeping software to keep track of your financials? If so, this blog post is for you. We are going to take a look at the different types of software that are available and discuss which one might be best suited for your needs.

If you're anything like me, you've found yourself with a lot of questions about how to choose the right bookkeeping software for your business. I know it can be difficult with so many options out there.  Which is why I decided to write this post on choosing the best option for your needs!

The first thing you need to do is figure out what type of company you are working in? For example, are they service-based or retail-based? This will help determine which type of accounting system would work best for them. For example, suppose someone has an online store where they sell products. In that case, Quickbooks might not be the most appropriate choice because it's geared towards service providers and small businesses that have physical locations.

What Accounting Software Is Best For Small Businesses In Australia?

We get a lot of inquiries from Australian business owners asking about the finest accounting and bookkeeping software to employ in their operations. "It depends" is the conventional consultant response, and it is also the correct one. It is dependent on a great number of factors including the following:

• What sector of the economy do you work in?
• Which of the following do you hope to achieve with your company: an exit, expansion, the status quo, etc.?
• Who will be in charge of the system, and what kind of knowledge and expertise do they bring to the table?
• What is the size of the company?
• Which challenges are you attempting to overcome?
• Do you already have a system in place, and if so, what is it?
• Is there a particular method that your bookkeeper or external accountant recommends?
• Do you require mobility in your organisation in regards to the data entry and reporting processes?
• ...and I could go on and on.

In all honesty, despite the fact that the list of questions beginning with "it depends," which can be rather lengthy, many replies nonetheless arrive to the same recommended solutions, time and time again.

This is especially the case when your annual revenue is less than $3 million and there are less than 20 people working for your company (the majority of companies in Australia). If your company has more than that many employees, I would classify it as a mid-sized one, and you would most likely run into the SMERP Dilemma.

Continue reading if, on the other hand, you belong to the majority demography of owners of small and micro businesses and you want to learn how to select the appropriate software.

Truth Check: Most People "Will Do"

The first item that needs to be addressed is the most important thing: the majority of retail bookkeeping and accounting software will suffice for the job. Invoicing. Expenses. Projects. Estimates. Bank feeds…. There is a certain amount of homogenization taking place.

A credit is referred to as a credit in accounting, and a debit is referred to as a debit. In all seriousness, any one of the top 10 most common solutions will do the trick for the vast majority of small and microbusinesses.

According to our research, the following products make up the top 10 most widely used accounting and bookkeeping software in Australia:

• Xero
• MYOB (AccountRight & Essentials – It would appear that they are moving in the direction of a single product).
• QuickBooks (Online or Self Employed)
• ReckonOne
• Sage Business Cloud Accounting
• Saasu
• Rounded
• Freshbooks
• ZohoBooks
• CashFlow Manager

When it comes to selecting business software for small and micro-businesses, I usually propose that these primarily satisfy the following baseline prerequisites:

• Choose just the alternatives that run in your browser or on your mobile device (this includes all of the aforementioned software except for MYOB AccountRight, which will presumably have a web front end shortly); this will increase the likelihood that the software will still be usable in five years.
• Choose a well-known, established brand with a decent-sized customer base over one that is flashy and new if you want to increase the likelihood that the software vendor will still be in business in five years (most of the top ten will probably still be in business in five years);

At this stage, I'm sure there are some folks who are only thinking about whatever option is the most affordable. And I will always say that the cheapest price is almost never the best value, even though I am aware that some people won't listen to me and will instead focus on the prices, in which case:

• I used to tell people that Wave was free, but as of December 30, 2020, they will no longer accept sign-ups from anyone outside of North America. If you have a relatively low number of "contacts" (clients and suppliers), you may save money by using ZohoBooks or Freshbooks; otherwise, you may want to consider Saasu, which starts at $15 per month.
• Payroller and Reckon STP are two apps that provide free services if you require a payroll app for Single Touch Payroll.

Continue reading if you're not just looking for the least expensive option but also the best value. The question that needs to be answered then is, what will be the most suitable option over a period of time, delivering the fewest concessions possible while still offering a meaningful return on investment? In order to assist you in settling on an answer, I have outlined the factors that I believe to be the most important considerations:

Important Things To Think About When Choosing The Best Accounting Software

The prefered accounting or bookkeeping programme of your accountant or bookkeeper

I want to emphasise that this only applies to SMALL and microbusinesses (those with fewer than 20 employees and revenues of less than $3 million).

• Are you happy with the current services provided by your external Accountant or Tax Agent?
• If the answer is affirmative, you should travel to that location and enquire about the programme that they favour or recommend you use.
• If the answer is no, the first step in practically any aspect of running a business, let alone selecting software for a business, is to collaborate with an experienced accountant who works independently. one that makes you happy, rather than merely the one you already know. While you are still young, the technology that they utilise ought to have some bearing on your choice.

Do you now work with or plan to work with a bookkeeper who makes you happy?

• If that's the case, you should visit them and enquire about the programme they propose. However, in my opinion, the judgement and preference of the bookkeeper takes precedence over that of the accountant because of the bookkeeper's greater familiarity with the firm and the fact that the bookkeeper uses the system on a daily basis.
• If not, refer to query 1.
• Xero, followed by MYOB and QuickBooks Online, is the accounting software that the majority of bookkeepers and accountants use these days, according to my observations.

If your accountant or bookkeeper specialises in your field (for example, creatives or trades), they might recommend less well-known solutions like Rounded or Freshbooks, but the majority of them will recommend one of the BIG 3 accounting software packages.

It is necessary for me to emphasise that, in my experience, the value that is added to business systems by the preferences of external accountants and bookkeepers is inversely proportional to the size of the organisation.

Think About Your Company's Needs

There will be a wide variety of requirements placed on accounting software by various types of firms. Therefore, when selecting an accounting software, the following questions should be taken into consideration:

• Does the system compute all of the needs for payroll, such as pay-as-you-go withholding, yearly leave, and long service leave, for example?
• Does the system keep track of inventories, work that's already been done, orders, jobs, and other requirements for task management?
• Will there be a limit on the number of bank accounts that can be managed by the system?
• Is it necessary for the system to deal with different currencies?
• Does the system maintain separate financial records for each company or department that operates within a company?
• Does the system have the ability to communicate with other computer systems, such as those used for making payments online?
• Does the software, which is commonly known as a Customer Relationship Manager system, preserve in-depth records on clients, such as the items they purchase, the frequency with which they do so, and the dates on which they do so?

Putting A Bookkeeping System In Place

When you are organising your financial records, you need to check that they adhere to the Goods and Services Tax (GST) and any other applicable tax requirements.

This is accomplished by developing a classification system, which is also referred to as a chart of accounts. A listing of all of the accounts that are required to cover the company's financial operations is referred to as a chart of accounts. Calculations of profit and loss can be segmented according to classifications to illustrate where an enterprise is making or losing money. Additionally, it is utilised in the process of determining the overall financial situation of a company in the form of a balance sheet.

How to Create an Accounts Chart

It is essential to have a chart of accounts in order to demonstrate how efficient and reliable your bookkeeping is.

When creating a chart of accounts, you will be required to do the following:

• However, first things first, you need to specify the accounts that will be utilised in the firm. These accounts include the many types of assets, liabilities, expenses, and revenue from sales.
• Create a list of these accounts under the financial classifications that were discussed earlier, including a separate entry for each type of account for assets, liabilities, sales income, and expenses.
• Allocate a numbering system for each account within the chart of accounts. For example, all asset accounts will be classified under the 1000 number, and all liability accounts will be classified under the 2000 number.
• Create a number of different sub-accounts underneath each of these major accounts.
• Find out if each sub-account requires additional sub-accounts; the answer to this question will depend on the level of detail that you require.
• Accounting software typically comes with a chart of accounts that has already been created and that you can use to organise your own personal financial dealings. You are welcome to make use of our sample chart of accounts as a point of reference as well.

Which Bookkeeping Software Is Best For Your Business: Botkeeper, Scalefactor, Pilot, or Bench?

Bookkeeping is one of the most critical duties for any business, regardless of the size of the company that you manage or whether it is a startup or a multibillion-dollar corporation. However, it is natural for owners of businesses to prioritise the development of their products and services in addition to the expansion of their businesses.

However, they are also responsible for staying on top of the monotonous and time-consuming chores associated with bookkeeping. The good news is that today there are a multitude of bookkeeping services readily available that may assist business owners in streamlining their bookkeeping responsibilities so that they can concentrate on what truly counts.

Botkeeper, ScaleFactor, Pilot, and Bench are currently the top four most common solutions for businesses to use when it comes to their bookkeeping needs. But how can you decide which one is best for you?

In this essay, we will provide a rundown of some of the factors that should guide your choice of bookkeeping software. In addition, we are pitting Botkeeper, ScaleFactor, and Pilot against one another and contrasting their respective services in order to assist you in making the best decision.

Because we want you to be fully informed, please notice that we have made every effort to present the information on each company in this article in an accurate and objective manner.

What Am I Looking For In A Bookkeeping Program?

It's a good thing that there aren't two bookkeeping software solutions that are precisely the same because there aren't two businesses that are exactly the same. Consequently, making an investment in the appropriate bookkeeping system is contingent on a number of elements that are unique to your company and field.

After all, your company is one of a kind, and some capabilities may be essential, while others may not be as important (and you most definitely do not want to be forced to pay for features that you won't be able to use).

Consider the following questions during your research and comparison of different bookkeeping software options before making your final decision:

• What capabilities ought the programme to have for my particular industry?
• Do I need bookkeeping that is done on an accrual basis or a cash basis?
• What aspects of accounting and taxes are essential for me to consider?
• What kinds of financial reports am I looking for?
• Will this solution grow with my company as it expands?
• What should I do if I need to clean up?
• Does it make a difference to have innovative features that lead the industry? (And what exactly is the issue with artificial intelligence and bookkeeping?)
• How is the software included into the system? Can it communicate with programmes like QuickBooks that I already have installed on my computer?
• Is the computer programme reliable?
• Is it safe to use the software?
• How exactly will I be supported in my endeavour?
• What is my budget for bookkeeping, and how much do these different solutions cost?

Features Of Bookkeeping Software To Think About

When it comes to keeping accurate books, you have several options, including Botkeeper, ScaleFactor, Pilot, and Bench, each of which is a capable choice deserving of your consideration. Each is capable of handling the majority of the bookkeeping responsibilities you have, allowing you to direct your attention to matters of greater significance (like, you know, growing your business).

Bookkeeping services are provided on a monthly basis by Botkeeper, ScaleFactor, Pilot, and Bench. These services include the production of financial statements, the classification of transactions, and the reconciliation of accounts. It is important to keep in mind that despite the fact that the four share a few commonalities, there are also a few significant distinctions between them. You can get a quick overview of how the solutions compare to one another by looking at the chart that compares their features that is provided below.

Accounting Techniques: Cash Basis And Accrual Basis

Bookkeeping on an accrual basis or cash basis may be more suitable for your company, but the good news is that each of these four services offers both of these options, at least to some extent. But while Botkeeper and ScaleFactor let you to choose the method of bookkeeping that you need, Pilot defaults to an accrual system, and Bench defaults to a cash basis. Neither of these options is available in Pilot.

As your company expands, it is essential to keep this in mind at all times. In cash accounting, revenue is recognised when payment is received, while expenses are recognised when payments are made. This contrasts with accrual accounting, which recognises income when the money is received. Because of this, accounting entries are created whenever there is a change in the amount of cash in the business.

In accrual accounting, revenue is often recognised by the company at the time invoices are given to customers (like when a product is shipped or a project is finished). At the same time that revenue for a particular product or service is recorded, any expenses that are immediately connected to the delivery of that product or service are also recorded.

In this manner, the corporation is able to match revenue with the expenses that are linked with it, independent of the timing of the passage of cash.

These are two entirely diverse approaches, each of which, depending on the stage of development that your company is currently in, has with it a distinct set of benefits and drawbacks.

Companies with annual gross sales of less than $5 million often maintain their books on the cash basis of accounting.

Because the cash basis technique eliminates the need for complex accounting procedures such as accruals and deferrals, it simplifies the process of accounting for transactions. As a direct consequence of this, the majority of owners of small businesses have no trouble applying the cash basis method.

The simplicity of cash accounting is perhaps its greatest advantage; under this method, a company only records income once it has obtained the cash in question, and it only records expenses after it has forwarded payment.

The accrual method of bookkeeping is most frequently utilised by businesses with annual revenues of more than $5 million. Owners of companies that are obligated to keep accurate records of their inventory, accounts receivable (AR), and accounts payable are required to use this method (AP). A significant advantage of using an accrual system is that it gives access to more accurate information, which in turn facilitates more purposeful decision-making. Additionally, bookkeeping on an accrual system provides company owners with an accurate view of cash flow because it accounts for revenue and expenses as they are incurred rather than deferring either until the end of the accounting period. Investors and people that engage in venture capital tend to favour it due to this reason.

Which One Suits My Business Best?

Bookkeeping can be done on either an accrual basis or a cash basis, and this is because we at Botkeeper believe that flexibility is extremely important and make every effort to work with your individual preferences about accounting.

Bookkeeping can be done using either an accrual basis or a cash basis using Botkeeper. Bookkeeping on a cash basis is how our more affordable plans are structured because, in general, this method works well for companies with fewer employees. As you develop, we grow with you. But what happens if you need both in order to make room for your expanding company? That is a very interesting question!

Accounting And Tax Features 

Each of Botkeeper, ScaleFactor, Pilot, and Bench offers the fundamental bookkeeping functions that most businesses require. However, what if you need additional accounting features that are more complex, such as inventory management, payroll, bill pay, tax preparation, and cash forecasting?

Cash forecasting, which is a plan that illustrates how much money a firm expects to bring in and pay out over the course of a specific period of time, is considered an essential component of bookkeeping, and all of the available choices provide this component. In contrast to Bench and Pilot, ScaleFactor provides services in the areas of bill pay and payroll management. In addition, inventory monitoring is not included with the Bench or ScaleFactor packages.

What About Tax Preparation And Filing, Then?

The actual procedure of filing end-of-year taxes is a significant point of differentiation between the four bookkeeping solutions; nonetheless, all four of them offer some amount of preparation work for tax time.

Direct tax filing services are not provided by Bench. It is anticipated of the CPA serving a Bench customer that they will deal with the proprietary general ledger system offered by Bench rather than the other well-known accounting software platforms (like QuickBooks and Xero).

Alternately, Pilot and Scalefactor have begun to compete with the majority of CPA firms by offering a "bundled" solution to their customers, which includes the filing of tax returns as part of their services. Working closely with a specialised accountant or accounting company is an absolute need, as would be attested to by the vast majority of respectable and successful business owners. This is one of the primary reasons why Botkeeper collaborates with your most trusted CPA.

Payroll processing, inventory management, invoice creation, and payment of bills are some of the services that Botkeeper can provide. Our mission is to provide a complete answer to the problems that our customers have, and we are able to deal with companies of any size or in any industry to address the specific accounting requirements they have.

When it comes time to file your taxes, Botkeeper can also work with your current CPA, or we can assist connect you with a CPA who is part of our trusted network. This is all part of our effort to provide the best possible experience for our clients.

In addition to this, Botkeeper provides a well-established Accounting Partner Program, which can supplement the requirements of an accounting department. Accounting businesses are able to free themselves from the mundane, day-to-day tasks of bookkeeping (data entry, reconciliations, and classifications) by using Botkeeper. This frees up accountants to concentrate on providing higher-level client consulting services.

When it is time to file taxes, Botkeeper will have a complete year-end package ready for your reliable CPA, which will make the filing process much simpler.

Which One Suits My Business Best?

Payroll, inventory management, invoicing, and bill pay are just some of the services that we provide as part of our comprehensive suite of bookkeeping software for businesses.

We are aware of the significant influence that can result from the relationship that exists between a specialised CPA and their company client. Even while we won't actually file your taxes with the ATO, we will make sure that everything is in order for the upcoming tax season.

Therefore, Botkeeper is here for you if you are searching for the greatest and most comprehensive bookkeeping support and the flexibility to work with the CPA of your choosing (or if you need assistance finding one)!