How to Choose the Best Accounting Software for Your Business

James Clear famously wrote, “You do not rise to the level of your goals. You fall to the level of your systems.” In business, there is so much to keep on top of that it’s crucial to have robust systems to succeed. Australian small businesses are lucky to have plenty of options when it comes to tried-and-tested accounting software systems that pack a punch. But, as you’re just getting started, it can be hard to wrap your head around what you need. Let’s break down the factors to consider and the most popular options so you can decide which bookkeeping software is right for your small business.

There is a lot to consider when choosing the best bookkeeping software for your small business. Making the right choice the first time around can save you a lot of time and money down the road. At Darcy Bookkeeping & Business Services, we are here to help. To make it easier for you to filter out the products you don’t need and ultimately decide on the best accounting software for your business, we have compiled a list of questions you need to ask yourself.

If this all seems too much and you would prefer to speak to one of our team of experienced bookkeepers, call us today on 1300 728 875 or drop us a line to see how we can help you to choose the best accounting software for your business.

Do I need accounting software for my small business?

The Australian Taxation Office has made a number of changes to recording and reporting requirements over recent years. Thanks to the increased complexity of bookkeeping regulations, the days of Excel spreadsheets and paper ledgers are now a thing of the past for most Australian small businesses. The introduction of Single Touch Payroll and regular Business Activity Statement lodgement requirements have made it necessary for small businesses to have cloud-based accounting software in place in order to remain compliant and avoid penalties and fines.

Beyond this, having cloud-based accounting software can really help with keeping on top of the incomings and outgoings. Bookkeeping software can display all transactions at the click of a button. When bank reconciliations are kept up-to-date, the time it takes to keep up with the financial aspects of the business is reduced. This saves time, money and stress for you as the business owner.

Factors to consider when choosing accounting software

There are a number of questions that you need to ask yourself when considering different accounting software options for your business. While this list is not exhaustive, we have tried to make it as comprehensive as is practical.

1. Does it have the bookkeeping features you need?

While having an all-round accounting software that covers off all of the ‘standard’ features is great, it is important that your accounting software meets the unique needs of your particular business. These needs can vary between industries and also with business size and structure, so be wary of choosing a one-size-fits-all option.

A great place to start is making an accounting software wish list. List the features that your business needs and then shop around, making sure to see which ones offer the features on your list. Some key questions to ask yourself include:

  • What functions do you need your accounting software to achieve for you?
  • How many staff do you have on the payroll?
  • How many transactions go through your accounts each month?
  • How many invoices are you raising each month?
  • Do you need inventory services or warehouse management?
  • What reports do you need to be able to publish?
  • How many bank accounts or credit cards are you utilising for the business?
  • How many people need to have access and logins to the business accounting software files?

2. Does it have the security features you need?

Unfortunately, hacking and data breaches are getting more prevalent and sophisticated by the minute. It is essential that your accounting software can keep up and ward off these potential threats consistently. Safety and security ensure your confidential business records are safe from prying eyes. Look for a software that is committed to cybersecurity so you can keep your financial data safe and reduce any liability that could be caused by a breach of your clients’ data.

Aside from external threats, there’s also the potential problem of system failure, software bugs and data loss. Does your accounting software have backup data in case of emergencies like these? Most cloud-based accounting software products are updated in real-time, ensuring that your details remain up-to-date as of the last time that the file is accessed and worked on. Some bookkeeping software companies have a hybrid option with the ability to work offline, which can be beneficial in the instance of internet outages or connectivity issues. However, this may also pose an issue when multiple users need to have access to the working file if the most recent changes have not gone live after being accessed offline.

3. Does it have the compliance features you need?

Accounting software that isn’t government-compliant is, quite frankly, a waste of money and time. If your current option is not compliant with government requirements, you will eventually end up either getting accounting software that does meet government requirements or paying more to make your present accounting software meet the system requirements. Either way, taking the time early on to ensure that the software meets Australian reporting requirements is the best way to proceed.

The Australian Taxation Office does have a list of accounting software and system requirements that they enforce. We recommend that all businesses refer to this when selecting an accounting software product to make sure that your bases are covered. This will help ensure you have no hassle when it comes time to lodge the required documents each month, quarter or year.

4. Is it easy to use?

Accounting software for small businesses needs to be extremely user-friendly – it serves as the financial hub of your business. Making sure you know your way around the software is essential to keep yourself on top of business operations and cash flow. Additionally, the easier it is for you to use, the more engaged you will be with the platform and the more likely you are to keep on top of the files. This will make the day-to-day management of the system much easier to keep up-to-date and ensure that the process is much less daunting.

Fortunately, rapid technological innovations have led to huge advances in the usability of accounting software for small businesses. All you have to do is to try each one of them and see which software feels right to you. Most of the products available currently have free trial periods so that you can try before you buy. In addition, most products also have training packages, tutorials and online support available.

Here at Darcy Bookkeeping and Business Services, we also offer training and education for you and your team when it comes to learning how to make the most of your accounting software to get the best value for your business. Call us today on 1300 728 875 or send us a message to get started.

5. Is it customisable (so you’re not paying for features you don’t need)?

Most of the cloud-based accounting software packages on the market today have a range of pricing options that vary based upon which service features you have available. Many of these have the flexibility of adding some features, and some have the ability to scale the features back should there be some features that you no longer require. It is worth looking into the pricing structures of the products you are considering to ensure that you are getting the best bang for buck with regards to the features offered and the price you’re paying.

There really is no point in paying extra for features that you don’t need and won’t get any benefit from.

What is the most popular bookkeeping software for small business?

There is a small number of very popular accounting software packages for Australian small businesses that we see the vast majority of our clients using. The most popular would have to be Xero, MYOB and Quickbooks. All of which would be adequate for most small businesses starting out. Our team of bookkeepers are highly experienced in dealing with all three of these offerings, and most accounting firms will be well versed in the ins and outs of these software packages.

  • Xero accounting software

In 2006, Xero came onto the market and introduced their cloud-based accounting software offering, which revolutionised small business bookkeeping. Xero is designed to be user-friendly and easy to navigate, making it ideal for small business and sole traders. It also had the features and capacity to meet business demands of a growing business. Designed in New Zealand, Xero is now a market leader in small business bookkeeping software in Australia, New Zealand and the United Kingdom.

Xero has a variety of features and capabilities, with real-time integrations and automations. There are a wide range of apps that integrate seamlessly with Xero for business management needs such as rostering, Point of Sales, inventory management and project management. Xero has flexible pricing options, and a range of support available for users.
Many of our clients like Xero as their small business bookkeeping software for the user-friendly interface, flexibility of integrations and mobile app for accessibility. More detailed information on Xero can be found here.

  • MYOB accounting software

MYOB has been used by Australian small businesses for over 30 years, making them one of the longest standing offerings in the accounting software domain. MYOB have continued to keep their offerings relevant and up-to-date with regards to government regulations. They have recently revamped their suite of offerings, moving from MYOB AccountRight and MYOB Essentials, which were two different products with unique benefits and features, to MYOB Business, which is a customisable product that is scalable based upon the features you need access to. This has allowed MYOB to offer a streamlined and manageable accounting software solution for small businesses and beyond.

As far as small business accounting software goes, MYOB does have a wide range of features available, and plenty of reports available for publishing. Our clients often feel comfortable with MYOB as it is such a well-known name in the accounting world, however their after-sales service is not as readily accessible as some of the other software products available. More in-depth information on MYOB Business can be found here.

  • QuickBooks accounting software

Intuit QuickBooks was one of the most popular Australian accounting software options for small business in 2023. With a range of bookkeeping and accounting functions available, and flexible pricing options, Intuit QuickBooks is a great option for bookkeeping software for small business, entrepreneurs and start-ups.

With automated data entry, Intuit QuickBooks allows you to keep your financial records up-to-date with minimal manual input. QuickBooks also has multi-use functionality, giving users the ability to manage finances in a team format, whilst still remaining up-to-date. Many of our clients like the automations and user-friendly feel of QuickBooks, along with the attractive pricing schedule. A more thorough overview of the features and practicalities of QuickBooks can be found here.

Are there any free accounting software options for my small business?

There are a number of free bookkeeping software options in Australia, and as previously mentioned, many of the more commonly used accounting software programs do offer free trial periods. One of the main considerations to be made when it comes to free accounting software packages is that you often get what you pay for.

Some of the more popular free small business accounting software packages available in Australia include Wave, ZipBooks, ProfitBooks, Gimbla and Gnucash. Of these offerings, Gnucash is a desktop software, meaning that it requires downloading from the Gnucash website onto your computer and is accessible only from the device it is installed on. It does not have online capabilities, and is not the most visually appealing product, but for a very small business with a limited budget, it may be an option to consider.

Wave, ZipBooks, ProfitBooks and Gimbla, on the other hand, all have free starter plans, designed to help you get your business off the ground, with the option to upgrade to a paid service as the business grows. It is important to note that the free options with all of these bookkeeping software programs are quite limited in the features and abilities that they have and that upgrading may become necessary very quickly if (all going to plan) your business grows quickly.

Why is it important to pick the right accounting software?

Setting up your small business accounting software does take some time and effort, whether for yourself or your bookkeeper or accountant. If you do decide on an accounting software, and then change your mind down the track, it can be complicated and costly due to the need to set up an alternative software file. Additionally, migration of a business file from one software package to another is not always straightforward. If not done correctly, can lead to significant issues both in the short-term and long-term, costing you large amounts of time and money. Taking the time to consider all the options and make the right decision from the outset will save you time, money and stress.

Your accountant may have an accounting software program that they are more familiar with or that they prefer, although most accounting firms these days are well-versed in using all of the major Australian accounting software packages.

If you are still unsure as to which accounting software is the best choice for your business, we have a team of highly skilled bookkeepers and accountants who can help you to choose the best accounting software for your business needs. Give us a call or contact us today to discuss your options with one of our bookkeepers.

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