From taxes and payroll, to invoices and expenses, accounting can burn a lot of time. Especially for the smallest of small businesses—like sole proprietors, hobby- or home-based businesses—or those who don’t employ an accountant or outsource their accounting, apps can be a huge help when it comes to managing the books.
Read on for an overview of the business of apps, the best accounting apps for small business owners, and tips on how to assess whether an app is a good fit for your small business.
The Business of Apps
App development has exploded as educational, entertainment, and business needs are met with advances in technology. As of last year, Android users were able to choose from over 2.8 million apps, and there were 2.2 million available in Apple’s App Store (with projections showing there will be more than five million by 2020).
But apps aren’t just fun distractions: 68% of small businesses used web-based or mobile apps for daily tasks in 2016, which grew from 50% in 2015. Small business owners use them to boost productivity, improve cash flow, create better time management, streamline processes like orders and reservations, and much more.
It’s easy to see why: Two of the biggest challenges small business owners face are controlling costs and expenses, and increasing productivity. Luckily, apps help with both, they’re almost all cloud-based (so they’re available anywhere with internet), and there are many available for free or for much less than an accountant would cost.
Watch: Small Businesses Are Embracing Apps More Than Ever
How to Assess an App
If you’re trying new small business accounting apps, here are some key criteria and questions to ask to decide whether or not it’s worth adopting (and paying for): Does it improve cash flow? Does it help with customer invoicing and billing? Does it improve time management? Is it easy to use? Is it secure? Are there extra privacy features? Is it affordable?
Like every business decision, you’ll want to thoroughly assess the pros and cons, especially if it’s an app that comes with a recurring monthly cost (and most of them do).
The good news is just about all small business accounting apps check all the boxes when it comes to basic points of comparison: free trials, easy-to-use interfaces, cloud-based mobile access, and customer support. They differ, though, when a small business owner is looking for specific features to fit their unique business needs.
The great news? There are dozens of small business accounting apps available, so it’s just a matter of finding one that works best for you.
Related: Small Business Accounting Tips
Four Great Small Business Accounting Apps
Let’s take a look at four great small business accounting apps. Here are some highlights from each, the types of businesses that might benefit from their use, and pricing details.
1. Zoho Books
Ideal for: Small businesses with relatively simple accounting needs (freelancers, home-based businesses, sole proprietors, and consultants).
Cost: $9/month basic plan, $19/month standard plan, $29/month professional plan.
Available on: iOS and Android
Zoho Books is easy to use, offers 16 invoice templates, has 24-hour (weekday) customer support, and can be linked with all your small business’ bank and credit card accounts. It also lets you track time sheets and expenses, generate reports, and create and send invoices, but it does not include a payroll function.
The plans vary by number of users and contacts: Basic is one user (plus an accountant) and 50 contacts, standard is two users and 500 contacts, and professional supports 10 users and unlimited contacts, plus the ability to create sales and purchase orders, and manage inventory. You can try Zoho for free with a 14-day trial.
2. Xero
Ideal for: Most small businesses, especially those who prefer using Apple devices and/or those with international customers.
Cost: $9/month starter plan, $30/month standard plan, $70/month premium plan.
Available on: iOS and Android
Xero has an edge on other options in that it doesn’t limit the number of users, so you can easily give multiple employees access, and all features are included with every plan level of plan. It also has an edge for Apple device users, as it’s Apple version isn’t a reduced version of the Windows/Android option.
The plans vary, however, by number of invoices, reconciliations, and payroll per month: Starter allows five invoices, five bills and 20 reconciliations, standard allows unlimited invoices and reconciliations (plus payroll for up to five staff), and premium includes payroll for up to 10 staff but also includes support for multiple currencies. Xero offers a free 30-day trial.
Ideal for: Most small businesses, especially independent contractors and freelancers.
Cost: $10/month self-employed plan, $15/month simple plan, $35/month essentials plan, $50/month plus plan.
Available on: iOS and Android
QuickBooks’ built-in features help save time (you can favorite reports and set up recurring automated reporting), and also automate recurring bill payments, set reminders, connect bank and credit card transactions, and reconcile and organize expenses. It can also sync with many other small business apps (email marketing, customer relationship management, time tracking, etc.). The payroll feature can only be added to the top three tiers, though, and comes with an extra fee.
The plans vary by features, users, and business needs: The self-employed plan lets you track mileage, income and expenses, create invoices, accept payments, and run reports; the simple plan supports one user and includes all self-employed features (plus the ability to send estimates, and tracks sales and taxes); the essentials plan adds time tracking and bill management; and the plus plan adds inventory tracking and the option to pay independent contractors using the 1099 form. QuickBooks offers a free 30-day trial.
Ideal for: Freelancers, consultants, and service-based small businesses with few or no staff and low/no inventory.
Cost: Free!
Available on: iOS and Android
Wave is free and lets you include an unlimited number of users (staff, partners, or your accountant, for example). For basic accounting needs like invoicing, receipts, expenses, reporting, recurring billing, and customer payment reminders, Wave is excellent, and if your small business sends estimates to customers, you can quickly convert them into invoices.
Although it’s free, Wave lacks some features many paid small business accounting apps include, like the ability to track inventory, create purchase orders, or get phone-based user support. Services like payroll or credit card and bank payment processing can be added for a charge (which are comparable to many other apps that charge), and Wave does offer support through email, as well as a wide variety of guides and tutorials on their website.
Related: NFIB Discounts on Payroll and Tax Filing Services
Find What Works for Your Small Business
Remember, a small business accounting app might not be the perfect solution. When it comes to apps to handle your accounting needs, one of the most common downsides is the cost, and some owners find them cost prohibitive.
If your accounting needs are overwhelming, a good accountant, while more of an investment, can help you with everything from navigating the complex world of business taxes and legal requirements to balancing your books. A great accountant could become more of a trusted small business advisor who has your best interests in mind. They’ll advise on financial matters but also often help you with bigger questions and overall business strategy.
This article was originally published on this site
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