- Why do many business owners turn to online accounting services?
- What are the biggest online accounting services for small business?
- What are the best online accounting services on the market?
Q: Can I do my own small business accounting?
A: While the answer depends on your unique business circumstances, in most cases, it’s entirely possible to do your accounting without bringing in a full-time accountant. That said, doing so will require a bit of support. This article explores the best online accounting services for small business.
Running a business is a learn-as-you-go process.
There are inevitably numerous hurdles that pop up as you take on more and more responsibility.
You have to:
- Navigate the ups and downs of the market
- Learn to brand your business
- Handle shipping and logistics
- Understand how to market yourself and your products
On top of that, you have to learn the types of costs for businesses. You have to learn to manage your finances, which brings us to accounting.
Online accounting services for small business are a crucial weapon in any small business owner’s arsenal.
These services mark the difference between being completely lost and having the freedom to continue working on your growth.
But with so many options on the market, it can be difficult to know which one is right for your business.
You’re busy, but you need to make a sound choice for your accounting processes. That’s why this article explores the best small business accounting software.
- What are the options for small business accounting?
- Why do business owners choose online accounting services?
- What are the biggest online accounting services on the market?
- Which online accounting service for small business is the best?
Why Should Small Business Owners Pay Attention to Their Accounting?
When you first started your business, chances are you did so with an eye toward your products or services.
You likely started your business because you wanted to solve a problem or make people’s lives better in some way.
You registered your business with bright eyes and began working on your business offerings.
But you quickly found out things were a bit more complicated. Running a business requires much more than a passion for your products.
It requires detailed record-keeping and reporting.
While this may seem like a daunting and tedious task, accounting is a critical part of running a successful business.
For starters, your accounting helps you understand your business better. Keeping track of your income and expenses shows you how much you’re making and what is fueling your profits.
This information can be used to reduce your business’s expenses, helping you reinvest more into growth.
It can also show you what is (and isn’t) working. By keeping record of your profits, you can gain insight into your most lucrative strategies and channel your energy in that direction.
This is important both for your business and for yourself. Even a year into the pandemic Americans were feeling financially burdened, and that trend seems to be continuing.
Prioritizing your accounting can help you better maneuver economic ups and downs, keeping you and your business safe.
In addition to the benefits accounting has for your business operations, accounting is also important legally.
Accounting is a big part of filing your taxes. As an entrepreneur, you need your online accounting service for small business to report both your personal income and your business’ profits.
If you ignore or underprioritize accounting, you’ll face one of two issues:
- On the one hand, you may wind up underreporting your income or incorrectly filing your taxes. When this happens, you can face fines and penalties, leaving you with unnecessary expenses.
- On the other hand, you may end up missing important write-offs. You might pay more in taxes than you needed to because you didn’t properly record your business expenses.
With all this said, it should be obvious that your small business accounting should be a priority.
What are the Options Available for Small Business Accounting?
As with many other areas of life, technological innovations and the connectivity of the internet have changed accounting quite a bit.
This means small business owners have more options than ever when it comes to how they handle their accounting.
One option is to simply handle everything yourself.
This may seem like a tempting choice initially. Doing everything yourself is free, and it means you’ll have a deep familiarity with how your business’s finances flow.
However, you’ll quickly realize how absurdly tedious and impractical this is should you try it.
Handling your accounting without the proper expertise is like trying to solve a jigsaw puzzle with a blindfold. You’ll just end up frustrated, with little to no progress made.
Another traditional option is to hire a full-time accountant. In terms of pure ease of use, this is probably the simplest way to manage your business’s accounting.
However, the downside to doing this is that it can be prohibitively expensive. Full-time employees are a luxury many small businesses can’t afford.
Compounding that, accountants are highly-skilled labor. They aren’t cheap. Some full-time accountants can easily cost upwards of $100K or more a year.
For most businesses, that simply isn’t feasible.
A closely related option is to hire a freelance accountant. Hiring an accountant on an as-needed basis does avoid some of the financial burden a full-time accountant puts on your business.
But even freelance accountants are expensive. They’ll likely need to work quite a bit to fully understand your business and handle your accounting for you.
This means you’ll still wind up paying substantial amounts of money for them in most cases.
Luckily, technology has entered to help make accounting easier. Outsourcing via the internet is so convenient and powerful that one such startup was recently valued at $1.2 billion.
Outsourcing using virtual solutions is cheaper and easier than almost any other option. This is true of most business operations, including accounting.
Why Do Many Business Owners Use Online Accounting Services for Small Business?
The cost of accounting software for small business is almost always significantly less than paying for an accountant.
Pricing is variable depending on the provider and the service level, but even premium services are well below what you might pay a human accountant.
Additionally, the technology that makes online accounting services for small business possible is always advancing.
As stated in a recent Forbes article, the easiest small business accounting software can help you directly track your income and expenses by connecting to your accounts.
This makes it a cinch to collect accounting information, putting the power back into a business owner’s hands.
These services can also help you stay on track with invoices, allowing you to set up automatic payments and easily review any new invoices.
With the incredible and ever-expanding power of the best small business accounting software, it’s no wonder many small business owners opt for this solution.
We’ve answered the question: “Do I need accounting software for small business?”
But “What accounting software is best?” requires a closer examination.
What Are the Biggest Options On the Market Currently?
The following are some of the biggest names in the accounting software market. We’ve analyzed each to explain their features.
Netsuite is one of the oldest cloud-based technologies. The business was founded in 1999 and acquired by Oracle in 2016.
Netsuite’s use of the cloud brings with it a fair amount of convenience. Rather than having to actively update the app with new versions, the improvements are simply added in the background.
This allows Netsuite to continuously improve without you really noticing.
That can also work against it though. Netsuite, a subscription-based service, is built on a fairly old skeleton. The system still relies on the foundation it built back in 2007.
Other key features of Netsuite include:
- Subscription-based model
- Cost: $999 per month for the lowest level of service available (add-ons are also available)
- User dashboard with various reports, making it easy to add new team members (additional users costs an additional $99 per month)
However, while Netsuite might be easy to add additional users to, it can be quite complicated to understand if you don’t already have a background in finance.
The reports, while useful, might be far too much for someone looking to gain a basic idea of their accounting.
They can be overly detailed and cumbersome, meaning you might walk away more confused than you were before.
Overall, Netsuite can be great, but it tends to work better for bigger businesses with accountants already integrated.
Intuit Quickbooks is one of the biggest and most well-established accounting services for small business.
Quickbooks has consistently been named the top accounting software by various online and print publications.
Much of this comes down to the service’s ease of use. Quickbooks is designed to meet business owners where they are, offering powerful insights in a helpful, easy-to-understand manner.
Quickbooks allows you to:
- Easily send invoices
- Track hours
- Track expenses
- Estimate quarterly income taxes
If you need more functionality, Quickbooks offers a wide range of service levels, helping you balance your needs with your finances.
One of Quickbooks’ defining features is its accessibility. The service actively asks you questions when you use it, helping guide you through every step of your accounting so you don’t miss anything important.
Should you need help, Quickbooks will provide access to financial professionals that can answer your questions by phone or chat.
Best of all, Quickbooks is incredibly affordable. Service starts at just $25 a month, with the most advanced version costing $180 a month.
Another big name in the online accounting service for small business space is Xero. The service aims to help small businesses better record and understand their accounting.
Plus, the firm Xero has been working to make several improvements since after users were frustrated by their inability to easily log in and the lack of analytics for short-term cash flow.
In recent months, developers have worked to make these features better.
Unfortunately, many of the major improvements come with an upcharge. Xero offers a service called Xero Plus, which is needed if you want to see analytics you might want to help guide your financial decisions.
Xero is also somewhat unnecessarily complex for solopreneurs. Its analytics are often beyond what a sole-proprietor might need.
Even for slightly larger businesses, Xero’s information isn’t quite accessible enough. Many business owners find they need an accountant to make the most of the reporting, as the service lacks the guiding nature Quickbooks has built in.
Xero starts at $12 a month. At this level, you are capped at 20 invoices and five bills. The service also lacks multiple currency capacity up until the highest tier.
Mazuma is a strong choice for businesses looking to handle their bookkeeping and tax preparation.
Mazuma allows users to send their financial information both through the mail and through online uploading. This provides you with the versatility to send information in the most convenient manner for you.
From there, Mazuma compiles your information into a series of reports which they deliver back in a few days.
This makes Mazuma a fantastic option for those without a background in accounting or finance. They simplify the process, providing you with the information you need in digestible pieces.
You don’t have to worry about compiling or selecting reports. Mazuma handles everything for you.
Mazuma’s ease of use also extends into tax preparation. When the time comes to file your quarterly taxes, Mazuma will compile your expenses and profits and deliver you the estimated payments, making it simple to pay the IRS.
Mazuma’s services start at just $58 a month. If you need them to handle your payroll as well, you can increase your service to their highest tier for just $138 a month.
Bench works by compiling all your information directly from your accounts and providing you with a monthly report.
When you sign on with Bench, your first step is to sync all your business accounts with the service.
From there, Bench automatically monitors and records any income and expenses. At the end of each month, you are provided with a report, giving you all the information you need to easily and effectively understand your business’s finances.
The biggest benefit of using Bench is that it is extremely easy and streamlined – all the information you need is automatically recorded and reported.
Bench also provides you access to a team of bookkeepers. This ensures you have the help you need should any questions arise.
Bench’s basic plan starts at $249 per month and provides monthly bookkeeping, year-end financial statements, and unlimited access to their team of experts.
Should you want additional help with your taxes, the premium tier provides unlimited tax advising and planning to help you make the most of your deductions.
What Should You Look for In an Online Accounting Service for Small Business?
You may still be asking, “What accounting software is best for small business?”
In order to truly narrow your options down, it’s essential to focus on two factors: ease of use and accessibility.
Unless you want to bring on an accountant in addition to your accounting software, you need to have simple and effective reporting.
Additionally, you want to ensure the process is easy to engage with. If you have to spend time learning about the reports or Googling endless accounting terms, you’re missing out on opportunities to grow your business.
That’s why the best accounting services make it easy to understand your finances and easy to report your expenses and income.
What are the Best Choices for Your Small Business?
Intuit Quickbooks has long been the gold standard for good reason.
Quickbooks offers one of the best balances between cost and service. No matter how big your business, there is a tier that is right for your budget.
With their exceptional customer service, commitment to helping guide you through your accounting and bookkeeping, and simple-yet-thorough reporting, Quickbooks is one of the best accounting services on the market.
Mazuma makes accounting as simple as possible.
Rather than wasting time figuring out what data and analytics you need, Mazuma delivers you the most pertinent information in an easy-to-access package.
You won’t waste time questioning yourself, and you won’t need any outside help.
If you’re looking to handle your accounting in the easiest way, Mazuma is a great solution for your small business bookkeeping
Like Mazuma, Bench is committed to making your accounting easy.
Their approach allows you to automate your reporting, connecting your accounts directly so that Bench can handle your bookkeeping for you.
You’ll have everything you need to understand your finances, file your taxes, and should you have any questions, Bench’s team of experts offers unlimited support.
Key Takeaways When Looking for Online Accounting Services for Small Business
Accounting is a crucial part of running a successful small business. Unfortunately, it can be quite complicated.
While you could hire an accountant or try to do your accounting yourself, both these options cost you.
Hiring an accountant is expensive, and taking the time to learn accounting yourself means stepping away from more important business operations.
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Using the right online accounting service for small business makes your accounting easier.
It provides the perfect balance of affordability and detail, helping you understand your finances without wasting time.
If you’re looking for an online accounting software, the best options are Intuit Quickbooks, Mazuma, and Bench.
These services are easy to use and provide you the guidance you need to make confident decisions for your business.