Skip to content 
Accurate and timely bookkeeping is essential for small businesses as they operate with limited resources. Accounting software helps with that by organizing financial information, automating repetitive tasks, and elevating regulatory compliance.
Busy team members can seamlessly perform tasks like invoicing, expense tracking, payroll, and real-time reporting.
To put it simply, the ideal accounting software for your small business will bring clearer insights, aiding decision-making.
However, it is challenging to say the least, especially with too many accounting tools available around the globe. They come in various shapes and sizes, which just adds to the confusion.
It can easily take professionals weeks, if not months, to find the right fit, which is simply too long for agile businesses.
In this article, let’s look at how you can shorten that time to quickly spot your perfect accounting software in the digital marketplace.
1. Determine the Deployment Method
Cloud and desktop accounting software solutions are the two ways you can use these platforms to handle your company’s finances. Both come with their own fair share of advantages and disadvantages.
First, let’s quickly understand them before diving into cloud accounting software vs desktop accounting software.
Cloud accounting software is hosted on remote servers and can be accessed via any device with an internet connection. Desktop accounting software is installed on your local device and can be used from that device only.
Speaking of advantages, the cloud-based accounting platforms give you flexibility, which can be ideal for traveling business owners. They also offer automatic updates, data backups, and integrations with other tools. You can start using them instantly for a subscription fee.
On the other hand, the desktop-based counterpart has some tricks up its sleeve too. There are no subscription fees, and you will have full control over your financial data. Moreover, you can back up the financial information as well, albeit the process will be largely manual.
You can spot a few cons for each while comparing cloud accounting software vs desktop accounting software.
Cloud accounting tools can be expensive, especially if your vendor charges you based on the volume of data or action instances. In contrast, desktop accounting platforms require manual effort in software maintenance and data backup on top of limited flexibility.
Businesses should look at their priorities and then make a decision. If your needs are limited and unlikely to change drastically, you can consider the desktop ones. But if you travel frequently and work in a dynamic market, the cloud-hosted accounting tools can be better.
2. Identify the Essential Features You Need
There are several core accounting tasks and processes that your tool should help with. It is pivotal that you list the central bookkeeping activities to streamline your search after the first step above.
Here are some accounting action items that are fundamentally essential for small businesses:
- Invoicing and billing: Invoices are payment requests made to customers, and bills are what your customers ask for as proof of their payment. While these appear simple, they do require keen attention to detail. Accounting platforms must help you automate these activities.
- Expense tracking: As you know, small businesses run on limited resources. Therefore, it’s crucial that you know about each dollar spent. Accounting tools that monitor your company’s expenses make it easier to categorize spending and optimize capital allocation.
- Bank reconciliation: This refers to the process of matching each transaction with the bank statements. It is a must-do to identify discrepancies instantly. Modern accounting solutions integrate with banks’ APIs to do it in the background for you and only alert you about potential errors.
- Financial reporting: Sometimes, business owners need to know the overall health of their business at a glance. Automated accounting reports tell you instantly about profits, tax obligations, and cash flow.
- Multi-user access: Over time, your team might grow or change. The onboarding process of the new team members onto the accounting solution should be seamless and quick. It is also a nice-to-have if the bookkeeping platform comes with collaboration features to streamline internal communication.
3. Look for AI-Powered Automation Capabilities
Team members in small businesses wear multiple hats. They juggle multiple responsibilities, which limits how much time they can spend on the accounting process. This is challenging because bookkeeping demands time and attention.
For example, consider the task of clearing an invoice you received from a vendor. First, you need to verify that the invoice is legitimate. Then, you need to check each product or service that you bought from the said vendor.
After validation, you make the payment and receive the bill, which is then entered into your accounting records for bookkeeping purposes.
Throughout that entire process, you might need to use a few tools, which makes the process even more tedious. Furthermore, any oversight can lead to revenue loss or strained relationships with external stakeholders.
However, AI-driven accounting platforms can do it automatically for you. These solutions will do the initial security checks and prompt you to approve the invoice. If you approve it, it will initiate the payment on your behalf, collect the receipt, and log the details into your accounting system.
On the other hand, if you disapprove of the invoice, the tool will relay that information to the sender as well. You can use LLMs to synthesize your reply for efficiency. When doing so, remember to humanize AI text to make your message more engaging and professional.
4. Consider the Ease of Adoption
The ease of adoption of accounting software solutions depends on two key aspects: how quickly you can master it and how difficult it is to integrate with other tools in your tech stack and workflow.
The ideal accounting platform in this regard is one with an intuitive interface, accelerating user adoption, even for non-technical stakeholders, and robust integrations to popular tools used by small businesses.
To find the right fit, start by evaluating your team’s digital skills. You can ask them how long it took for them to learn the software they currently use. Additionally, you can show some feature videos of the accounting tool under consideration to seek their opinions.
Then, make a list of the tools you use and check for available integrations. In some cases, you can build your custom integrations through third-party connectors like Zapier, Make, and Pabbly Connect.
This step alone should reduce the number of viable options, taking you significantly closer to the best accounting platform for your business. Consequently, you can afford to test each of the remaining bookkeeping platforms individually to see if they are a perfect fit.
A good rule of thumb is to run a short demo project built on your existing accounting workflow. It will help you simulate what it will be like using the solution on a daily basis. Pay attention to the ease of use and the robustness of the integrations to make the final decision.
5. Think About Long-Term Business Needs
Bookkeeping is a complex task in itself that rests on several external variables. For instance, local and global business laws can impact how you manage your business’s finances, which may require you to modify your accounting workflows.
Simply put, with time, the scope and breadth of your bookkeeping activities evolve, and you need a tool that can accommodate that without draining your resources.
Let’s say you have a retail store. Initially, you might be okay with a basic tool that offers invoicing and expense tracking capabilities. However, later, you may expand to multiple locations or open an online store. Then, you might need a tool that can consolidate financial information and gel effectively with other digital tools.
Moreover, you might hire more employees who handle accounting tasks, such as generating invoices and making payments. In such a scenario, your accounting platform should allow multiple users to handle the records seamlessly.
While it is always challenging to predict where your business will go in the future, you can certainly look at the growth arc of more established companies within your niche. Additionally, collaborate with your team for a better assessment.
This is a critical step because accounting is the backbone of any business. When that workflow gets disrupted for reasons such as adopting a new accounting solution, your financial operations get halted.
Wrapping Up
Small businesses need a future-proof accounting platform that elevates their bookkeeping process. Hence, it’s crucial to consider various factors, such as compliance, efficiency, and scalability.
First, start off by choosing the deployment method based on whether you value flexibility or control. Then, list the essential features you need in an accounting platform for your company.
After that, look at the AI and automation capabilities. If the tool leverages predictive models and LLMs to take administrative tasks off your plate, it will save you countless hours. This is essential if you are operating with limited resources.
Of course, it all depends on how quickly and effectively your team can adopt the new bookkeeping software into your existing processes. Finally, think of your long-term business needs and opt for a solution that can accommodate your future needs.
