Best Accounting Software Based on In-Depth Reviews

By automating and digitizing the complex, time-consuming, and extremely prone-to-human-error accounting tasks necessary to run a small business or freelancing career, accounting software is a great tool for non-accountant entrepreneurs who want the benefit of thorough, accurate financial records for only a fraction of the fees charged by a certified accountant. 

Because of its many benefits, it’s no wonder that 65% of small businesses use some type of accounting software, or that the accounting software industry is predicted to reach a global value of $11.8 billion by 2026. 

According to José Luis Rodríguez, a tax and customs specialist with 15 years of experience in the oil industry, “like most areas of our lives, small businesses are right in the middle of the information revolution, and tools like accounting software help owners and freelancers stay agile and on top of their business. Plus, they can stay informed thanks to the multiple reports and data produced by the software.”

Valerie de la Cruz, Accounting Manager at Ad Practitioners, LLC, had this to say about the benefits of accounting software: “Accounting software lets business owners monitor their income and spending, giving them control over their finances, plus a clear overview of where the business stands.”

Here are some things you should know about accounting software. 

The Essentials

Effective accounting software –such as the ones featured in this review– must be able to perform and automate tasks that are indispensable for the proper management of a small business’s finances. These are:

Accounts Receivable and Payable

Accounts receivable refers to money owed to a company by its customers, while accounts payable is the reverse: money owed by the company to its clients, contractors, and service providers. 

Financial Reports

Financial reports are documents summarizing a business’s financial performance for a determined period of time. These reports are shared with interested third parties –such as shareholders and regulating agencies– and usually include balance sheets, income statements or loss reports, statements of equity, and cash flow statements.  

General Ledger

This is the system used to record every financial transaction made by a business. The information contained in the general ledger is used to create financial reports. 

Bank Reconciliation

The process by which a business’s internal financial records are reconciled, or matched, with its bank records. It summarizes the deposits, withdrawals, and other activities affecting a business’s bank account for a specific period. 

Billing and Invoicing

The two concepts may seem identical, but they’re not; invoices are basically a description of services provided, while bills refer to a request for payment. This is one of the most important tasks in a small business, and its automation by accounting software represents a drastic reduction of time performing this task. 

Expense Tracking

This is a record of daily financial transactions, so that you can stick to your business’s budget. Some accounting software even lets you upload receipts by taking a photo, making it a great way to stay on top of your cash flow and also get you prepared for tax season.  

Fund Accounting

A task mostly performed by non-profits, this applies to funds that have restrictions relating to their use. In fund accounting, the focus is on accountability –the right and lawful use of funds– rather than profits.  

The Benefits

Besides significantly cutting down on the time you’d have to spend performing accounting tasks –therefore making your job as a business owner much easier–, one of the most important benefits of accounting software has to do with the virtual elimination of human errors. 

By using complex algorithms and machine learning, accounting software gives you 100% accurate results regarding your company’s finances. This accuracy, consequently, helps you create reports that meet the legal requirements for your business. 

In addition, accounting software is able to give you an overview of your business’s progress and status, so you can pinpoint opportunities and areas that need improving. 

Accounting Software vs Certified Accountant

Even if you use accounting software for most of your business’s financial tasks, this does not mean that you should altogether forgo the services of an accountant. 

According to Valerie de la Cruz, Accounting Manager at Ad Practitioners, LLC –ConsumersAdvocate’s parent company–: “Businesses will always need a real person making sure the information on the software reflects real-life transactions. While accounting software certainly makes processes a lot easier, a real accountant can strategize in ways that machines yet cannot.”

Ideally, you should use the services of both, and give your accountant access to your accounting software. This way, you’ll both be –quite literally– on the same page. 

Cloud and Desktop Options

In the world of accounting software, there are two main options: cloud-based and desktop-centric. 

The desktop versions run only on the computer you download them into and do not require an internet connection in order to function. Data is stored in your own PC, which means you’ll need to use some sort of backup in case your computer breaks down. Consequently, desktop versions make it harder to share your data and/or access your financial information, since it’s all in your computer. 

We, however, recommend cloud-based accounting software because of its sharing capabilities, automatic data backup –so that you can be sure you’ll never lose your financial data–, and affordable monthly payments. Cloud-based accounting software is tailored to today’s mobile users, meaning you’ll be able to access your data from anywhere and via various media, including webpages and apps.