Small business accounting software works well online. Being able to jump on and enter data, check numbers and create reports from anywhere is a huge time saver.
Modern accounting applications are easy to use. Small business owners like me may not know if a transaction is a credit or a debit, but we do know if we’re spending money or getting money.
Double entry book-keeping may excite professionals, but most small companies just need to know their cash position, whether they are trading profitably, send invoices and fill in tax forms. Being able to enter data without stressing over accounting terms and concepts is essential.
Every small business accounting software brand does a good job of dealing with the paperwork for GST returns and filing annual tax information for the Inland Revenue Department.
That’s the good stuff. Now the bad stuff.
Accounting software subscription
Online accounting firms sell their software as a subscription. Companies generally offer a basic option as a lure to new business. Quickly customers learn the cheapest option doesn’t cope with enough transactions for a meaningful business or they run up against other restrictions.
Warning. You won’t pay that entry-level subscription for long. Expect to move up to a more advanced product quickly.
There’s often a similar trap further up the product range.
Many small businesses sell to overseas customers. I may send one or two invoices to overseas clients each month. Small business accounting software companies usually charge users extra to handle multiple currencies.
In the case of Xero, a standard medium subscription is NZ$49 monthly. Being able to send invoices to Australian clients in Australian dollars costs an extra $15 a month. That works out at NZ$10 per international invoice over a year.
Xero makes it hard to work around the restriction by clearly labelling amounts on invoices created by the medium subscription product in NZ$.