Accounting software

Is this the right tool for you?

Without a proper ledger, you do not know whether a month was profitable until your accountant tells you months later. Accounting software records income and expenses as they happen, matches them to the bank, and produces the reports lenders, tax preparers and you need.

Signs you need it now

• Your records are a spreadsheet, a shoebox or the bank statement.
• Your tax preparer spends much of their time sorting your transactions.
• You cannot say which jobs, services or products actually make money.
• A lender or landlord has asked for a profit and loss statement and you had to build one.
• You are collecting sales tax and are not confident it is tracked correctly.

When another area fits better

• You want someone else to do the recording and reconciling, not a tool to do it yourself. Read the bookkeeping help guide
• Your immediate need is just sending bills and getting paid. Read the invoicing guide

What matters at your size

How the way you work changes the choice

Trades and contractors

Job costing matters most: materials, labor and subcontractors against each job. Progress billing and retention are specialized needs that general tools handle unevenly.

Shops and retail

Daily sales summaries from the point of sale, sales tax by location, and inventory valued correctly. The link to your till system is the key integration.

Professional firms

Time and expenses billed to clients, retainers and possibly trust or client funds, which some professions regulate. Check your profession's rules on client money.

What to compare

• Does your accountant support it

  Often the deciding factor. Ask before you choose; migrating later is painful.

• Bank feed reliability

  Broken bank connections are a frequent daily frustration. Ask how reliably each connects to your bank.

• Accrual versus cash

  If you need accrual accounting or inventory, the entry-level tiers often will not do it.

• What happens as you grow

  Cheap tools that cannot add a second user or track by class become a migration once the business grows.

Cost and setup effort

• Most products are a monthly subscription with tiers that add users, inventory or project tracking. Check which tier includes the features you need now and next year.
• Setup means a chart of accounts, opening balances and bank connections. An accountant or bookkeeper setting it up correctly once saves a lot of clean-up later.
• Moving history from one system to another is rarely clean, so choose with a few years in mind.

Trade-offs to weigh

General or industry-specific

General tools are widely known by accountants and connect to many apps. Industry tools handle job costing or inventory better but narrow your choice of advisers.

Simple or complete

A simple tool you keep up to date beats a powerful one you avoid. Add complexity only when a real report or process needs it.

All-in-one or connected apps

Accounting with built-in payroll and payments is simpler to run. Separate specialist tools can be better at each job but need the connections maintained.