How to pick accounting software for small businesses

Quick insights

• Accounting software can help track money that goes in and out of a small business.
• Using accounting software may help business owners automate the expense report process and avoid human errors in reporting.
• Cost, features and ease of use may be important factors to consider when choosing accounting software.

Small business owners or financial stakeholders typically track the money that goes in and out of their business. But as a business grows, this process may become more time-consuming and difficult. Investing in accounting software can be a helpful way to automate this process and potentially save time for other tasks.

Accounting software can help create expense reports, assist with bookkeeping, inform budgeting decisions and more. Below, we cover the benefits of using accounting software, what factors to consider before purchasing and a few popular software options.

Benefits of accounting software

Small business owners typically need to wear a lot of hats when running their companies. And as businesses grow over time, it may be increasingly difficult to manage multiple areas or departments.

Opting for accounting software can be a useful way to streamline recordkeeping and expense reporting tasks. Here are just a few key benefits of investing in accounting software:

• Streamline the reporting process: Some accounting software will automatically generate and fill out expense reports. If your company is used to manually creating and filling out these reports, this may be a helpful timesaver.
• Reduce manual errors: Automated data entry may result in fewer manual errors.
• Provide details for budgeting: Financial stakeholders can review financial reports all in one place and use these findings to help inform future budgets.
• Assist in collaboration: Finance stakeholders can work on the same documents within the same system, potentially making it easier to communicate and collaborate.
• Provides scalability: As businesses grow, they may need to devote more time to recordkeeping and expense management. Software can help businesses manage these tasks over time.

Factors to consider when choosing accounting software

There are plenty of accounting software options out there, so you may want a consider a few factors to find out which software is best for your business:

• Cost: While expense report software can be helpful for small businesses, it is an investment. Newer businesses may not need as robust (or expensive) of an option as larger, more established businesses might.
• Features: Before purchasing software, it may be wise to check if it includes all the features you need. For example, some software may only have expense reporting capabilities. Others may also allow you to track accounts payable and accounts receivable.
• Usability: Software costs may vary depending on how many people will need access to the software. Additionally, some businesses may prefer software that also features a mobile app. This may be helpful for employees who need to submit expense reports on the go.
• Customer support: If you have a new business or don’t have a dedicated finance department, it may be helpful to opt for software that has accessible customer support and training resources.

Accounting software features to look for

Once you have a few accounting software options in mind, do your research to ensure it offers the features you need. Some software companies offer free trials or demos where you can ask a sales rep specific questions about the product.

Here are a few common accounting software features that may be helpful for your business:

• Automated invoicing and billing for a straightforward payment process.
• Business credit card integration for seamless expense tracking. Explore our business credit card options to find the right one for your company.
• Bank reconciliation functionality to ensure that bank statements match up with expense report numbers.
• Payroll management features to assist with employee payment and tax calculations.
• Tax preparation assistance to ensure that the company complies with tax regulations.
• Financial reporting and analysis tools to provide insights into budgets and business performance.
• Inventory management tools to track product stock levels.

In summary

Expense management software may be a valuable investment in your small business, especially as you scale. However, you may want to consider the relevant features and the cost of the software before choosing the one that works best for your business.

Some accounting software companies allow you to request a free trial or sales demo to ensure the features and customer service are what you’re expecting. You can also test out a free accounting software option first to see if it meets your company’s needs.