Which accounting software best suits your growing business?

At Finanshels, we always get asked what the best accounting software is for a business. There are plenty of options to choose from including Tally, Zoho, Xero, Dynamics, Quickbooks and we understand it can be overwhelming. That is why in this comprehensive guide, we will walk you through the essential factors to consider when selecting the best accounting software for your business.

Define Your Business Needs

The first step in finding the best accounting software for your organization is to define your specific needs. Are you a sole proprietor looking for basic bookkeeping tools, or are you a growing corporation in need of advanced financial reporting capabilities? Consider factors like the size of your business, industry-specific requirements, and the complexity of your financial operations. Identify the capabilities and features your that your organisation needs. What are the tedious manual tasks, slowing down your finance team? What features do you require to automate those tasks?

Cloud-Based vs. On-Premises

Accounting software comes in two primary forms: cloud-based (online) and on-premises (desktop). Cloud-based softwares offer the advantage of accessibility from anywhere with an internet connection and regular updates. On the other hand, on-premises software can provide more control over your data but may require higher initial investment and ongoing maintenance.

Scalability

It's important not to overlook scalability because as your company grows, it becomes as vital to switch your softwares and allow adaptation to your changing needs. However, it’s important to look at the automation capabilities which bring scalability. Does the accounting software enable automation of manual tedious tasks?

We often see early stage companies invest immensely in time and resources to implement large complex systems, overlooking the long term view. However it’s not advisable to invest resource in such legacy softwares.

Capability

Opt for reputable brands with a proven track record, as they have successfully navigated various scenarios and honed their systems to accommodate diverse business needs. It is also important to look for a software that is evolving as technology is also evolving every day.

Automation

Does the system integrate with your bank, does it carry out auto reconciliation or even reduce your office bill pile-up by storing it all on the cloud along with your transactions? That will make your accounting life a breeze and bring alot of efficiency and scalability.

Do they have the following features?

Cost

Accounting software comes with varying pricing models, such as one-time purchases, subscription-based pricing, or usage-based fees. It's essential to evaluate the total cost of ownership, including upfront costs, ongoing fees, and any additional charges for extra features. Look at the life time value of data and cost in these case.

Xero vs. Zoho vs Quickbooks

Xero: Xero is known for its scalability and is suitable for businesses of all sizes, from freelancers to growing businesses. Xero provides a comprehensive set of accounting features, including invoicing, bill payment, bank integrations reconciliation, expense tracking, payroll automation, reciepts capturing, cost center wise reporting and many more. It also offers a wide range of integrations with third-party apps like consolidation, inventory management, approvals management. Xero is known for its clean interface and ease of use. Xero handles various scale and are best advised for hyper growing companies if less inventory.

Zoho: Zoho offers a affordable range of products, including Zoho Books, which is better suited for small to medium-sized businesses if not too much complex financial operations.Zoho Books offers features like invoicing, expense tracking, bank reconciliation, inventory management, and more. Zoho also integrates with other Zoho products, such as Zoho CRM and Zoho Inventory. Zoho Books is also user-friendly, with a straightforward design. It's a good choice for those looking for a simple accounting solution at affordable price. It’s important to note that Quickbooks also offer similar features to Zoho.

Compliance and Localisation: Both Xero, quickbooks and Zoho Books offer support for various tax systems and are localised for different regions.

If your are carrying out large complex operations, it is best to switch to Microsoft dynamics, Sage or similar ERPs at a scale of $100 Million in general and move to SAP or similar ERPs at the scale of $1 Billion.

Ultimately, the best accounting software for your business will be the one that aligns most closely with your accounting and financial management requirements. In contrast, if any software platform meets 80% of your requirements with no major roadblocks, that’s a good go ahead for early stage companies. Aiming for 100% capabilities is best for large corporations, bearing in mind this comes with a hefty price.