The best accounting and bookkeeping software for small businesses
Accounting and bookkeeping software is imperative in today’s finance world. In recent years, accounting and bookkeeping software has become as important for small businesses as it is for larger ones. Using software for your online bookkeeping helps you save valuable time, money and reduces the risk of mistakes in your accounting.
How do you know which one is best for you?
Here are a few things to keep in mind when selecting accounting software for small business.
1. Work out your requirements. Make a list of accounting and bookkeeping requirements you need so you don’t get distracted by what platforms offer when it’s not actually what you need. Consider things like, do you need to manage inventory? Do you need payroll software for your small business?
2. Break this list into must haves and nice to have. So you know what is a deal breaker and what is a bonus.
3. Budget. Set yourself a budget of how much you’re willing to spend, based on the value you will get from the automation and efficiency of accounting software.
4. Identify if you need to integrate existing software, like your ecommerce platform, with your bookkeeping software. Warning, some integrations cause bookkeeping pain. There is a wide range of accounting and bookkeeping software available, today we have narrowed it down to our top 3. We’ve reviewed these 3 leading accounting software platforms to help you decide which one is the best accounting or bookkeeping software for your small business.
The team here at Accolution are verified Odoo accountants and we also use the Odoo platform ourselves. Odoo expanded into Australia around 2009 and have recently opened an office in Australia in 2023. Odoo Accounting is an open-source software that offers accounting with fixed asset management and depreciation, accounts payable, and customer invoice payments, plus so much more. Odoo isn’t just bookkeeping software; it is enterprise resource planning (ERP) software. It's open-source software — meaning it can be customised and modified to fit your specific business needs. It offers over 40 different small business applications.
Odoo Accounting offers sales invoicing, full inventory management, purchase order and accounts payable, fixed asset management and depreciation, reporting, and more. Using Odoo’s other modules you can also add on key features, such as project management, time tracking, CRM, website design and social media marketing.
The key advantages of Odoo for a small business are:
Open source and highly customisable
Streamlines and centralises data
Offers a wide range of integrations
Reduction in costs
It will grow with your business (with large transaction volumes Xero and Quickbooks slow down)
Full inventory management
Can be your all in one accounting and ERP system
It is more expensive and likely will require an implementation partner (we can recommend some)
Steeper learning curve and not as user friendly
Does not include payroll software but you can easily integrate a payroll software add-on
Xero as grown out of New Zealand, expanded into Australia and has been embarking on a global expansion. In 2011, a US version was launched allowing them to specifically target the lucrative USA market.
Xero’s bookkeeping software is popular for its ease of use, and pleasing interface. Both accountants and business owners love it.
It is used primarily by small and medium businesses. Known for its simplicity, Xero has an easy to use interface for people who are less tech savvy or need a more basic solution. It comes with some great features such as the ease of reconciling bank transactions, an easy to use payroll module and simple reporting so you can quickly see your cash flow and profit and loss.
Some of Xero’s main features:
Vendor bill tracking
Accept Customer Payments online
What we like about Xero’s bookkeeping software:
Ease of use for non-accountants
No fee for adding extra users
Handes PayPal multi-currency accounts well
A few cons when it comes to Xero are:
Poor inventory management (really need an add-on)
Multi-currency is not available with their entry level plans
Can’t do a journal entry to a bank account (not an issue for non-accountants)
Xero works well for average small business bookkeeping. If you have unique needs or are growing significantly, you may get frustrated by the lack of flexibility and limited advanced features.
Quickbooks originated in Canada many years ago and historically dominated the USA market. In 2012 an international version of Quickbooks was born and it was then offered in the Australian market. Quickbooks online is primarily used by small and medium businesses, though in the US a Quickbooks Desktop product exists typically used by larger manufacturing companies (the desktop version is not available outside the US). Quickbooks online (QBO) has entry level pricing that is attractive for small business accounting, with higher priced plans you can unlock advanced features. Quickbooks online is used for bookkeeping by both small and medium businesses. It is known for being feature rich and providing excellent support. Some key features include strong payroll software functionality, good multi-currency options and report bundling with automated email delivery.
The key features of this bookkeeping and accounting software:
Income and Expense Tracking
What we like about Quickbooks:
A true bank reconciliation process (probably the accountant in us that likes this)
Inexpensive entry level pricing
Multi-currency included in all plans
Australian payroll software platform superior to Xero’s.
Some drawbacks of Quickbooks:
User limits on price plans
Can’t handle PayPal multi-currency accounts
Journal entries are difficult to find/search
Quickbooks online, with their entry level plans, is a great accounting software solution particularly for a small business that is cost conscious. Quickbooks will also grow with your business and continue to serve your bookkeeping software needs for many years.
Which accounting software is best for your small business in Australia? That probably depends on the stage of your business.
If you are just starting your business and want to keep costs as low as possible, and $10 to $20 a month makes a difference to your budget, then you can’t beat Quickbooks prices. Quickbooks will also grow with your business as effectively as Xero.
If you prefer a great user interface experience with wide market acceptance within Australia’s small business and accountant community, then Xero is the choice for you. Xero is capable of serving your small and medium business.
On the other hand, if you have really big plans for your business or your business needs are pretty complex and you want accounting software that will support you throughout, then Odoo is a fantastic option. Odoo’s ERP functionality coupled with full accounting software can power your business to great heights.
Deciding which is the best bookkeeping software can be tricky, for more information check out our bookkeeping packages . If you'd like further advice get in touch with us and we can help guide you through the decision making and setup process.