Blog: Accounting Software Moves Into the CloudOctober 1st, 2014
Accounting software isn’t something a lot of small business owner’s think about; you’ve got more important things on your mind. However, selecting the right software can save time, hassle and even allow you to manage your business in ways you’ve never considered.
The accounting software landscape is in the process of changing. On the one side, there is the old guard of QuickBooks and Simply Accounting (now called Sage 50). These two accounting packages are quite capable, with lots of features. They install on your desktop and have new versions annually, so updating is something you need to be aware of. You also can only access the information on the computer that you installed it on. Setting up multi-users for the same file is doable, but can sometimes require some work.
On the other side, there are many new accounting software services in the cloud. This includes newcomers like Freshbooks, Kashoo, Wave and Xero. Their features are not as comprehensive as their desktop counterparts, but they make it up in speed, accessibility, and ease of use. They often come with mobile apps so information can easily be accessed on the go. You also don’t have to worry about your data back-ups or software updates, as the provider takes care of it. Most offer the ability to share data with your accountant, so they can have access at any time to retrieve information or help with a problem. Reports are generally pre-set and little customization is available, so you generally can only look at summaries in one or two ways.
In Canada, there are a few things to keep in mind when selecting accounting software. One is GST/HST being a VAT (Value Added Tax) style sales tax, so you need to track taxes on both sales and purchases. US centric accounting software is often missing the purchases input tax credits options, so aren’t suitable for a Canadian business. For payroll, you want to make sure it supports Canadian payroll tax calculations if using a built-in payroll module. Multi-currency features are also a key feature for Canadian business as many have some type of income or expense in US dollars.
Here is a look at some of the online providers that are good to use for Canadians:
Wave is a free Canadian made, ad-supported, accounting software. It is very focused on banking transactions and offers sales and purchases modules. Payroll modules are available for premium (i.e. paying) users. It doesn’t use account numbers so transitioning your data to different software can be difficult. Overall, it handles simple record keeping well, but is not a good fit for more complicated bookkeeping.
Freshbooks is a Canadian made software, free for small scale (up to 5 clients) and $20 to $40 per month for larger. It is a niche product for small businesses that bill by the hour with time tracking, sales and purchase modules. The rest of the software is basic, and it is a great alternative to tracking with excel or on paper.
Xero is New Zealand made and costs between $20 and $40 per month. It has more features than the above, including fixed asset listings and account numbers. Overall, it’s fairly robust software with good integration and reconciliation – a strong contender for moderately complicated business operations.
Kashoo is Canadian made and can cost between $50 and $200 per year. It’s not quite as feature-rich as Xero, but covers all the basics well, including account numbers and the ability to import bank information. Its major strengths are speed and user interface. It is by far the easiest for data entry and switching between areas is virtually instantaneous.
QuickBooks Online shows it’s not just new companies that do online solutions. However, Inuit’s online version of QuickBooks is not as full featured as their desktop version. Pricing ranges between $13 and $40 per month. Another advantage is their larger base of historical users means that there are more add-on services and third-party options available.
If you run a relatively simple business without the need of extra modules like inventory tracking, an online accounting solution might be just right for you. All offer free trials for you to play around with and test before committing, so be sure to try before you buy.
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