The Complete Guide to Choosing Bookkeeping Software for Businesses

Did you know that, according to recent statistics, accounting is the most crucial area for businesses in terms of automation? It’s followed only by marketing and sales. In short, it pays to invest time in choosing bookkeeping software that benefits your business.

It’s no secret that bookkeeping is a necessary part of any business, big or small. But did you know that there are a variety of software options available to help you manage your books? 

In this complete guide, we’ll walk you through the different types of software and how to choose the right one for your business. So whether you’re just starting out or you’re looking for an upgrade, keep reading to learn more.

What is Bookkeeping Software?

Bookkeeping software is an accounting software program that helps businesses track their income and expenses. 

While most big businesses and corporations have accounting teams that manage their finances, smaller businesses and freelancers benefit greatly from bookkeeping software.

Why? You can usually purchase it as a standalone program or as part of a suite of business applications. While it doesn’t entirely do away with the need for a bookkeeping service or team of accountants, it can certainly help.

Bookkeeping software typically includes features such as:

  • Invoicing
  • Payment tracing
  • Inventory management
  • Employee timesheets
  • Task management
  • Project management

Ultimately, what’s so attractive about this type of software is that it’s user-friendly. This is a huge plus for business owners who aren’t accountants or bookkeepers.

Likewise, bookkeeping software can save businesses time and money by automating many of the tasks associated with bookkeeping, such as preparing financial statements and reconciling accounts.

Does Your Business Need Bookkeeping Software?

If you’re thinking about starting a business, or if you have recently started a business, you may be wondering if you need bookkeeping software. 

The answer to this question depends on a number of factors, including the size of your business, the number of transactions you expect to process each month, and the level of detail you need in your records. 

There are many options available when it comes to bookkeeping software, so it’s important to do some research to find the option that best suits your needs. Mostly, this comes down to checking out the pricing.

In general, bookkeeping software can save you time and money by automating tasks that would otherwise be done manually. However, an experienced bookkeeper can do that, too!

Which one is right for you? If you’re planning on expanding significantly, hiring a bookkeeper can help. They’ll keep track of compliance issues and ensure your records are solid. 

However, if you’re still a freelancer or sole proprietor and don’t plan on growing anytime soon, bookkeeping software might be a great, simple solution for you. This is especially true if you’re on a strict budget.

The Different Types of Bookkeeping Software

Bookkeeping can be complicated and time-consuming, but with the right software, it can be a breeze. And in 2022, there are tons of software out there that can make your life a whole lot easier. 

Here are some of the different types of bookkeeping software and their features.

Desktop Bookkeeping Software

You install this type of bookkeeping software on your computer and you access it through an icon on your desktop.

This is unlike a mobile app or web platform. However, the software still includes all of the features you need to keep track of your finances, including income and expenses, invoicing, and payments.

Online Bookkeeping Software

You access this type of bookkeeping software from a web browser. It is often more affordable than desktop bookkeeping software, and it offers many of the same features. However, it may not be as comprehensive as some of the more expensive options.

Mobile Bookkeeping Software

This type of bookkeeping software can be accessed on your smartphone or tablet. It is often more affordable than desktop bookkeeping software, and it offers basic features.

However, mobile bookkeeping software is going to be the least comprehensive option. This is simply due to the fact that it’s hard to access in-depth analytics and data from your phone. However, for basic invoicing and financial tracking, it’s fine.

Main Features of Bookkeeping Software

When it comes to bookkeeping, bookkeeping software can make the process much easier. Bookkeeping software can keep track of your finances, provide reports and analysis, and automate many of the tasks associated with bookkeeping

Here are some of the main features to look for when choosing bookkeeping software.

Ease of Use

One of the best bookkeeping software features to look out for is ease of use. Look for bookkeeping software that is easy to use and navigate. 

The last thing you want is to waste time trying to figure out how to use the software. If the software is going to cost you hours of wasted time (and ultimately money) to learn to use then it might not be worth it.

Automatic Updates

Make sure the bookkeeping software you choose offers automatic updates. This way, you can be sure that your financial information is always up-to-date.

The goal of bookkeeping software is to automate processes for you. The last thing you want to have to do is worry about regular software updates and doing them manually.

Reporting and Analytics

Look for bookkeeping software that offers powerful reporting and analysis features. This way, you can get a clear picture of your finances and make informed decisions about your bookkeeping.

However, mobile bookkeeping software is going to be the least comprehensive option. This is simply due to the fact that it’s hard to access in-depth analytics and data from your phone. However, for basic invoicing and financial tracking, it’s fine.

Choosing Bookkeeping Software: 6 Things to Consider

There are a lot of bookkeeping software programs out there. How do you choose the right one? Here are six things to consider.

Consider the Size of Your Business

Deciding on bookkeeping software for your business can be a daunting task, but it’s important to carefully consider the size of your business when making your decision. 

For small businesses, there are a number of software programs available that are designed specifically for businesses with a limited number of employees and transactions. 

These programs typically offer a basic set of features, such as the ability to track income and expenses, create invoices, and run reports. For larger businesses, however, it’s often necessary to choose a more robust program that can handle a greater volume of data. 

These programs typically offer more advanced features, such as the ability to track inventory levels, manage payroll, and generate financial statements. No matter what size business you have, there’s a bookkeeping software solution that’s right for you.

How User-Friendly is the Software?

When choosing bookkeeping software, consider how user-friendly the software is. After all, you will be spending a lot of time using the software, so you want to be sure that it is easy to use and navigate. 

One way to judge how user-friendly a piece of software is is to look at online reviews. Another way is to download a free trial version of the software and try it out for yourself. 

By taking some time to assess how user-friendly the software is, you can help ensure that you choose a product that will meet your needs and make your bookkeeping tasks easier.

Features: Invoicing, Time Tracking & More

When choosing bookkeeping software, there are a few important features to keep in mind. First, the software should have invoicing capabilities. This will make it easy to bill customers and keep track of payments. 

Second, the software should have time tracking capabilities. This will allow you to track how much time you spend on each project and ensure that you are billing correctly

Finally, the software should have the ability to generate reports. This will allow you to see how your business is performing and make necessary adjustments. 

By choosing software with these features, you can streamline your bookkeeping process and get more out of your data.

What Ongoing Costs Does the Software Have?

When choosing the best bookkeeping software for your business, also be sure to consider the ongoing costs associated with the software. Many software programs require a monthly or annual subscription fee, and some also charge transaction fees. 

In addition, you may need to pay for training or support in order to use the software effectively. As you compare different software programs, be sure to ask about all of the potential costs so that you can make an informed decision. 

Customer Support & Quality of Service

Not only do you need to find software that meets your specific needs, but you also need to make sure that it will provide quality customer support. 

When choosing bookkeeping software, look for a company that offers 24/7 customer support. This way, you can be sure that someone will always be available to help you with any questions or issues that you may have. 

After all, this is what you’re paying for. If you don’t receive timely support, it’s going to make a whole lot more sense to go ahead and pay a bookkeeping business for regular support.

Additionally, read online reviews of the software to get an idea of the quality of service that you can expect.

Free Trials or Demos

When choosing bookkeeping software, it’s important to consider whether you want to try out a free trial or demo first. Both options have their own pros and cons, so it’s worth taking the time to evaluate which one is right for you. 

Free trials typically give you access to all of the features of the software for a limited amount of time. This can be helpful if you’re trying to decide whether the software is a good fit for your needs. 

Demos, on the other hand, usually only provide a limited number of features, but they can be a great way to get a feel for how the software works before committing to a purchase. 

Ultimately, you should be able to try the software before fully purchasing it, though. We never recommend purchasing software before using it. And we definitely don’t recommend signing a long contract before testing anything out either.

3 Tips for Using Bookkeeping Software Effectively

Bookkeeping software can be a great way to keep track of your finances, but it’s important to use it effectively in order to get the most out of it. 

If you think that using bookkeeping software is the best option for you compared to hiring a bookkeeper or accounting firm then you’ll want to ensure you’re using it correctly.

Here are three tips to help you do just that.

Keep Your Software Up to Date

Bookkeeping software can track your income and expenditures, help you manage your budget, and even prepare your tax return. However, bookkeeping software is only as effective as it is up to date. 

Regular software updates not only improve bookkeeping software performance but also add new features and fix bugs. As a result, it is important to keep your bookkeeping software up to date in order to get the most out of it. 

You can usually set bookkeeping software to update automatically, or you can update it manually when new updates are released. Either way, make sure to keep your bookkeeping software up to date so that you can keep your business finances in top shape.

Track Your Business’ Progress

Tracking your business’ progress is important to ensure that it is heading in the right direction. There are various bookkeeping software programs available that can help you to track your income and expenses, as well as your inventory levels. 

By keeping track of these things, you will be able to see how your business is performing and make any necessary changes. For example, if you see that your expenses are increasing but your income isn’t, you may need to cut back on some of your costs. 

Alternatively, if you see that you are not selling as much as you expected, you may need to adjust your prices or marketing strategy. Tracking your progress will help you to ensure that your business is on the right track and making progress towards its goals.

Backup Your Data Regularly

No one likes to think about the possibility of their computer crashing and losing all of their hard work, but it happens. 

That’s why it’s important to back up your data regularly. Bookkeeping software can help you keep track of your finances, customer information, and inventory. Losing this data can be a major setback for any business.

The Verdict: Is Bookkeeping Software Right for Your Business?

In learning about choosing bookkeeping software for your business it’s important to assess if that’s the right option for your company or not. Ultimately, this type of software is great for super small businesses and freelancers. However, if you have employees and manage more than a few thousand dollars in revenue monthly, there are other options.

The best option for small yet growing businesses? Bookkeeping services tailored to fit your business’ needs.

At Kleanbooks, we offer just that. We have a team of dedicated, experienced tax and accounting professionals who will work to understand your business. They can maintain your books, run your payroll, and manage your taxes.

Think this might be a better option for you than bookkeeping software? Schedule a free live consultation now!