The best accounting software for small businesses should be affordable, easy to use, and allows you to easily track your income and expenses. The software should also include detailed financial statements to give you insights into the health of your business. We looked at over a dozen products and narrowed it down to two powerful ones, QuickBooks and Xero. There were a couple runners up (Zoho & FreshBooks), but QuickBooks and Xero took the cake by a long stretch! Below we will go over 8 reasons why QuickBooks and Xero are the best tools for your business compared to some proprietary product with minimal capabilities and integrations.
1. Integration Capabilities with Multiple Third-Party Apps
The ability to integrate with other programs is a big advantage of QuickBooks and Xero. Both integrate with financial institutions so that your bank and credit card transactions can automatically download daily to your accounting software. Additionally, both apps integrate with hundreds of other apps that you may already be using, such as, Insightly, EpicLedger, CRM, Stripe, PayPal, Shopify, Square, etc. If your app does not have integration capabilities, automating your accounting process will be impossible. This will end up costing you in more ways than one. You will end up spending more time and effort manually entering information and keeping up with physical documents, which will end up costing you money.
2. Easily Give Access to Your Bookkeeping Data When Your Switch Accountant
With established apps like QuickBooks and Xero, there is no need to transfer data from one accountant to another. For whatever reason, if you ever decide to switch accountant or CPA, all you have to do is give access to your next accountant or CPA via the administrator portal. This will save you money because your next accountant won’t have to spend hours recreating your data all over again which you will be billed for.
3. Mobile Device Compatibility
One of the most convenient factors about Xero and QuickBooks is that they are making it available on mobile devices. Users can manage their customers, invoices, estimates and expenses on the go.
4. Easy to Setup & Use
One problem with accounting programs is that many of them are difficult to use and cumbersome to learn because they don’t have a mature customer base which means limited feedback to optimize the programs. QuickBooks, on the other hand, is designed to be intuitive and easy to understand, even for business owners who lack an accounting or financial background. Xero has a great team of staff who are always on standby via email to help you figure out the ins and outs of the program. It also has detailed tutorials for specific scenarios.
5. Top-Notch Support
QuickBooks and Xero provide incredible support. You get free phone support and access to online tutorial videos and online support forums. The best thing, their response time is immediate.
With other apps on the market, they are not as responsive when it comes to support. Their turnaround times are questionable. What if you had an emergency and you need to take immediate action? Let’s just say you will be waiting a long time to receive any sort of feedback or help.
6. Top Level Security
QuickBooks relies on advanced, industry-recognized security safeguards to keep all of your financial data private and protected. QuickBooks Online is a VeriSigned Secured product. VeriSign is a leading secure socket layer (SSL) Certificate Authority. With pass-word-protected login, firewall protected servers and the same encryption technology (128 bit SSL) used by the world’s top banks, QuickBooks has the security element in place to give you peace of mind.
With Xero, your business and personal information is encrypted and replicated it in several locations online. This means that your data is safe, secure and available when you need it. It also has a two-step authentication which adds an extra layer of security. Each time you log in, you will be required to enter a unique code generated by an app on your smartphone making it harder for anyone to hack into your account.
Would you use an app, that hasn’t been around for long, with dubious security? We think not! With Xero and QuickBooks, your business and personal information is secure.
7. Detailed Reports
By managing all of your cash inflow and outflow activities in QuickBooks and Xero, you are able to access several reports that provide valuable insights into your business. All reports are pre-built in both software and can be run easily generated. Reports are updated in real-time as you enter and save transactions. In addition to AR and AP reports, you can also run top three reports that you need in order to assess the overall health of your business: Profit and Loss, Balance Sheet and Cash Flow Statements.
8. Stability & Reliability
Software bugs are frustrating and at any instance something can go wrong causing you to lose all your hard work and information. This is where Xero and QuickBooks shine. Since both software have been around for so long, their engineers have gone through a fair share of fixes and eliminating bugs making the software extremely stable. Other proprietary accounting applications are still going through a trial and error process and you never know when your data will be wiped by a bug or a program error. You can always rely on QuickBooks and Xero!
Of course, there are more than eight reasons why Xero and QuickBooks take the cake, but we thought we’d keep it short and only highlight the more relevant features. After reading this article, we hope to have helped you determine which accounting software is right for you.
Why We Went with QuickBooks As Part of Our Accounting Package
At OneSelfClub we pride ourselves in providing our members the best tools for their business needs and that’s why we use QuickBooks as part of our complete accounting package. QuickBooks is easy to use, reliable, convenient, hassle-free and it is universal. Our package includes QuickBooks Online because we believe it’s the best solution for business owners. It’s cloud-based so that you never lose your financial data, it’s affordable, it’s easy to use and it’s available on all of your devices.
With QuickBooks Online, business owners can:
· Send invoices
· Create and evaluate financial reports
· Track expenses
· Generate profit and loss statements
· Bank reconciliation
· Inventory tracking
· Track accounts payable
· Create and manage budgets
· And the list goes on…
QuickBooks Online is just a tool that helps you maintain your company’s day-to-day finances, but what about your other accounting needs? Well, OneSelfClub has the complete solution. It is comprehensive and everything you need for your business accounting needs. In addition to the QuickBooks Online subscription, as a OneSelfClub member, you will also get:
· Bookkeeping Service
· Month-end Reconciliation
· 1-hour interaction with an accounting advisor
· EpicLedger financial dashboard to help you understand your numbers in less than 60 seconds.
· EpicMileage to automatically track your business miles and claim maximum deduction during tax time.
Using DIY accounting methods like QuickBooks as a start up or small business owner is expected. No matter how diligent you were in recording your finances, chances are some things fall through the cracks.
Messy Chart of Accounts
Your chart of accounts should be clean and easy to understand. If it's too complicated, it’s inevitable that items will get coded wrong. Don’t create a million hyper-specific accounts. And remember to group similar accounts together. Basing your chart of accounts on Schedule C (Form 1040) is a good place to start.
This happens a lot, even to the best of us. Having the same entries in two places will cause your books to be unbalanced and you will waste time fixing the error or pay your CPA to look for and solve the issue. Create a system to track your entries. For example, have two folders, "not entered" and "entered". Once you have entered your transactions into QuickBooks, move them over to the "entered" folder.
Using Accrual Instead of Cash-based Accounting
QuickBooks defaults to the accrual method, but it's better to use the cash-based method. It's effortless, tells you exactly when the transaction took place, and it's easier to see how much cash you have at any given time.
Many of us fall behind on our records and catching up is a major hassle. To stay current on your records, make a habit of regularly recording your transactions and not waiting till the last minute. Transaction Thursdays is a perfect day!
Missing or Incorrect Adjustments
Let's say you charge $50 for a service, and the credit card company takes 2%, your revenue is actually $49. Make sure you have corrected your adjustments at the end of the month, quarter or year.
Losing Old Records
If you have changed accounting software or (for some reason) shut your business down along with your QuickBooks, remember that you only have a read-only access to your QuickBooks files. Make sure to backup regularly.
Not Getting Help
Feeling overwhelmed or stressed? Especially with the tax deadline approaching? It might be time to sign up with OneSelfClub. OneSelfClub is the perfect accounting solution for start-ups and small business owners like you. It's affordable, interactive, reliable and a lot less stressful than paying a CPA to clean up your mess nearing tax season.
Saving your receipts can be a tedious task, but it's important. You should save all your receipts and invoices related to your business expenditures. Here are some different types of receipts you will need to gather: vendor invoices, statements and check payments made.
Reconcile Your Bank Accounts
Monthly bank reconciliation is crucial to ensure accuracy of financial statements. During the reconciliation process, steps need to be taken to ensure each transaction from your bank statement matches with your books. Identify and fix any discrepancies to ensure that your bank and credit card balances are properly reconciled.
Separate Personal Expenses From Business Expenses
We can't stress this enough. Commingling your personal and business expenses in the same account will raise red flags and result in you being held personally liable for your business’s debt and actions.
Going green will guarantee that you don't spend extraordinary amount of time compiling your information and it's better for the environment. It will also make your life easier. We recommend you use tools like Shoeboxed to scan/document your receipts. And, it will automatically create expense reports from your uploads.
Collect W-2s and 1099s
If you hire employees or contractors, you are required to file W2s and 1099s. The deadline for filing these reports is due by January 31, 2019. Late filing may result in penalties, so as a business owner, you definitely want to be sure to stay in compliance.
Have A Tax Professional Review Your Expenses
We understand some business owners prefer the DYI approach when it comes to accounting and filing taxes. However, we strongly advise that you hire an experienced CPA to review your books, tax deductions, and any other financial information relevant to your tax return, before you file your taxes. This helps to eliminate errors and ensures that you're taking advantage of all the deductions available to you and your business.
Frustrated with doing your own books? Sign up for OneSelfClub.
If You are running a business, regardless of size, you instinctively know how important accounting is to long-term success. The challenge is finding the right medium, an accounting application that works for your unique situation. Majority of small business owners use either QuickBooks Online or QuickBooks Self-Employed. The difference between the two is significant and whether you use one or the other is solely dependent on the type of business you are operating. Let's look at each option in its entirety.
What is QuickBooks Self-Employed & Who Is It Best Suited For
As you have probably guessed, QuickBooks Self-Employed is for the self-employed. More specifically, it's for independent contractors who need a little help staying organized. By independent, we mean just about any part-timer, moonlighter, momprenuer, freelancer, real estate agent, Uber/Lyft driver or independent consultant. Additionally, if you sell products via e-commerce platform, QuickBooks Self-Employed can help you stay organized.
Ideally, it's for those business owners who don't differentiate between personal and business bank accounts, i.e. people who file 1040s. If you have one account that stores all of your income and expense, QuickBooks Self-Employed can help you sort it out.
More specifically, QuickBooks Self-Employed is for individuals who:
- Pay majority of expenses using their personal debit card, credit card or even cash
- Write no more than 5 checks per month
- Invoice no more than 10 customers per month
- Do not have employees as QuickBooks Self-Employed does not have payroll functionality
- Do not employ any contractors
- Want to pay for the tool on a month-to-month basis
What is QuickBooks Online & Who Should Use It
QuickBooks Online is ideal if you are a solopreneur or a small to medium-sized service-based business that requires inventory tracking options or have invoicing requirements. It is a great option if you intend to grow or scale your business in the upcoming years, possibly hiring employees or if you sell goods or products (online or physically).
It is also a great option for companies that want multiple directors to access financial data or for those who desire automatic updates from the cloud.
In general, QuickBooks Online will work for individuals or businesses that:
- Buy or sell products or services, similar to a retail establishment
- Manage accounts payable & accounts receivable
- Plan to expand in the future and will have employees who work for them
- Pay or plan to pay employees or contractors
- Require extensive reports about their business
Now that you know who QuickBooks Self-Employed and QuickBooks Online is suited for, let's get in to the nitty-gritty of each. Both programs are impressive, but only one will fit your needs. A summary of key features will help you clarify which program is best suited for you:
What Can You Do With QuickBooks Self-Employed & QuickBooks Online (Features)
The goal of QuickBooks Self-Employed is to track freelance business income and expense, capture all expense deductions for tax time, estimate quarterly tax payments and make tax time really simple and stress-free. On the other hand, the goal of QuickBooks Online is to manage the financial aspects of a business. Below are some key features of each QuickBooks:
What Is Missing From Each QuickBooks Solution
There are obviously some things missing between QuickBooks Self-Employed and QuickBooks Online. With QuickBooks Self-Employed, you are limited to the reports you pull, i.e. profit and loss statement and a Schedule C report. You cant send invoices or receipts and the Mileage tracking feature doesn't work all that great on iOS devices. QuickBooks Online on the other hand, is not for beginners; there's a definite learning curve and it requires time and patience.
Additionally, unlike QuickBooks Self-Employed, Quickbooks Online does not include a mileage tracker. If you are self-employed, tracking your miles is important so that you can claim maximum mileage deduction when it's tax time. On average, business owners can save $5000 on taxes with just mileage deduction alone.
The Alternative & Complete Accounting Solution For Your Business
Even though both solutions are sufficient and will satisfy your accounting needs, neither QuickBooks Online nor QuickBooks Self-Employed is the complete solution. OneSelfClub has the complete solution for your business needs. Since QuickBooks Online doesn't have mileage tracking, OneSelfClub's accounting package has filled that void by offering EpicMileage, a free mileage tracking app that automatically tracks the miles you drive.
On top of that, you get your own accounting advisor to consult when you have questions or concerns which both QuickBooks are missing. The package also includes EpicLedger's financial dashboard which will make your life easier when it comes to understanding your numbers and making timely business decisions. Highlighted below are all the accounting services included in the OneSelfClub package:
Some small business owners love going over their own books — after all, it’s their personal scorecard of how well the business is doing. Others dread dealing with numbers or get so caught up in day-to-day operations that they neglect their bookkeeping. Whether you love it or hate it, good bookkeeping is essential to small business success.
Separate Your Personal and Business Finances
When your business is just starting out, it is easy to mix and mingle expenses and income. Co-mingling business and personal money can lead to big tax headaches down the road. Open a business bank account as soon as you have formed your business entity. It is also a good idea to get a business credit card as soon as possible. Using a business credit card responsibly helps your business build its credit rating separate from your personal credit rating.
Do A Weekly Checkup
If you are not a numbers person, your natural tendency may be to put off the "boring" part of entrepreneurship as long as you can. Then, you could end up with books that are not balanced, bounced checks or unpaid invoices that are months overdue. Make sure to review your books at least once a week. It will help ensure everything is in great shape.
Get Professional Help With Your Bookkeeping
If you are the business owner also doubling as the office administrator/bookkeeper and finding the bookkeeping too hard or don't have enough time to do it, then we recommend hiring a professional. Hiring a professional is cost-effective and more importantly, it will save you time to focus on growing your business.
Track and Document Business Expenses
With changes to business tax reporting for 2019, you should consult your accountant to see what kinds of expenses you will be able to deduct next year. Be sure to keep detailed records, including receipts. Avoid having drawers stuffed full of receipts by scanning and digitizing them; there are several smartphone apps that make this easy. Avoid using cash for business expenses. Using your business credit card is a good way to simplify your expense tracking, because most business credit cards sort your expenses by categories.
Stay on Top of Your Business’ Accounts Receivable
Late-paying customers can quickly dry up your business’ cash flow. That’s why it is essential to pay attention to when your receivables are due and act immediately when they are overdue. Reach out to late-paying customers right away to see what’s going on with their payment and when you can expect to receive the money. If the customer is having financial difficulties, see if you can work out a payment plan to start getting some of the money that is owed to you.
Automate Whenever Possible
Bookkeeping software simplifies the tedious process of entering data into spreadsheets and reconciling figures manually. Cloud-based bookkeeping software are even better because they back up all your data — no more worries about a crashed hard drive wiping out your books. This is why we use QuickBooks Online and EpicLedger. Both are cloud-based softwares that eliminate the possibility of losing important data. Everything is in the cloud.
Stay On Top Of Tax Deadlines
In order to avoid getting caught short, plan ahead. Set aside money for any anticipated tax bills and pay them on time so you don’t face penalties. The IRS website’s tax calendar for businesses can sync with your own cloud-based calendar so you never miss a deadline.
Avoid Using Cash For Business Expenses
Instead, use your debit or credit card religiously. When you use cash, you lose track of potential write-offs. If you must pull money out of the ATM, write a note on the receipt stating the purpose of the withdrawal.
Learn To Understand Monthly Bookkeeping Reports
It’s surprising how many business owners have no clue if what they are doing is working until it’s too late i.e. they suddenly find themselves with low cash flow and huge debts. To avoid this, you must understand your bookkeeping reports such as, income statements, balance sheets, cash flow statements, etc. With OneSelfClub you get a monthly financial meeting with an advisor to review these reports and your financials in detail. This is a crucial step to have someone consult with you about your financials as they can help you understand the trend of how your business is doing, and provide another point of view on your financials. Additionally, you can use this time to go over additional questions or concerns you may have on a monthly basis instead of having to clean up everything year end to file your taxes.
Perform Quarterly Reviews
Each quarter, take an in-depth look at your bookkeeping and accounting records. Look for trends, such as growing or declining sales, year-over-year revenues, or an increase in late-paying customers. Consult your accountant so that they can help you look at the big picture so you’re better prepared for future capital needs such as buying new equipment or moving to a bigger location. Additionally, you can use financial dashboards to perform quick yet thorough reviews.
Plan For Major Expenses
Set aside money for major expenses like furniture, new equipment, repairs, etc. Proper bookkeeping is important and it can help you budget for your business. By budgeting for your small business in the coming years, you can save a lot of worry about dealing with these expenses in the future.
Have Immediate Access To Your Financial Data
If you don't have access to your financial data, it becomes exponentially difficult to make business decisions or analyze the health of your business when you need to most. Think about driving your car at night without headlights - you are bound to crash. No matter where you are in your business’ journey, immediate access to critical information like cash flow, revenue, net profit margin, expenses, etc. will allow you to make smarter choices. EpicLedger is a great tool that allows business owners to easily access their financial data no matter the time or location.
OneSelfClub helps business owners streamline their accounting processes, increase their operational efficiencies, lower costs and maximize profits by utilizing state-of-the-art and exclusive technology, a determined team and a proven methodology.
Our solution will enable business owners to focus on the more important things, growing their business.
If for any reason you are not satisfied within 30 Days of using our product, you will be given 100% Refund.
OneSelfClub is a bookkeeping services firm, not an accounting firm. OneSelfClub is not certified, licensed or registered as a certified public accountant or certified public accountancy firm. Our mission is to have our bookkeepers help you get your books in order so that they can be handed over to your CPA for tax preparation purposes.