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Top Online Accounting Software in 2020

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Online Accounting Software Guide

Table of Contents

What is Online Accounting Software?

Cloud-based or online accounting software is a SaaS-based business model. It can be traditional, on-premise, or self-installed software, only that it will be hosted on remote servers. Users send data requests to ‘the cloud’. The data gets processed within ‘the cloud’ and is sent back to the user. In a cloud model, instead of working from the desktop, users can execute the application functions off-site. Users also get remote access to all software applications and dynamic modules via the Internet or any other network with the help of a cloud application service provider.

Online accounting software reduces the hassles of installing and maintaining the software on every individual desktop. Employees all over the organization as well as in its remote branch offices can easily access the same data and version of the accounting software. They can also benefit from real-time reporting and visibility, and enjoy mobile capabilities and teamwork throughout the organization. The cloud accounting systems are subscription-based services where businesses end up paying only for the amount of space utilized. At the same time, businesses receive automatic updates of the software without purchasing any additional software.

Thus, online accounting software significantly reduces the cost of installing and maintaining software across the organization. It also eliminates the time and effort of installation and maintenance. Thus, it provides more convenience and advantages to businesses.

Online Accounting Software vs Traditional Accounting Software

Besides the onsite and off-site concepts, there are other noteworthy differences between online and traditional accounting software:

  1. First, online accounting software is undoubtedly more flexible than traditional accounting. In a cloud environment, users can access accounting data from anywhere using any device through the Internet. However, this is not possible in traditional accounting software.
     
  2. Second, financial information is auto-updated in online accounting software. Also, there’s no need of upgrading license fees and maintenance costs. Businesses only renew their subscription contract, if and only required. Whereas, in traditional accounting software, businesses have to pay additionally for software updates and maintenance. They also have to incur expenses for purchasing new hardware like servers.
     
  3. Third, cloud-based accounting software offers financial reporting in real-time. It reduces the chances of human errors, which are more likely to happen from manual data entry, thus providing accurate financial account balance. Contrary to this, real-time reporting is not available in traditional accounting software, which means more time, more effort, and a higher risk of errors.
     
  4. Finally, unlike traditional accounting modules, cloud-based accounting software has greater ability and efficiency to deal with multi-currency and multi-company transactions.

Developing a System for Selecting Online Accounting Software

Instead of suggesting the same online accounting software for all small to large scale businesses, software developers must cater to individual needs and specific requirements of their clients. In this way, they can deliver the best solutions and meet the unique requirements of a firm. Here’s how they can develop an appropriate system for choosing the best accounting software for their Clients:

1. Understanding Client Requirements

The very first step to provide the most suitable accounting software is by giving a patient hearing to the respective needs and requirements of your clients. A thorough understanding of the client’s business and the purpose of installing cloud-based accounting software helps in making better recommendations. Also, instead of offering a hundred options that might disinterest clients, a clever way is to know their requirements and come up with a few shortlisted choices.

2. Mitigating Risk

Moving to a new system of accounting holds a certain amount of risk. Also, there’s a substantial cost for training, support, and maintenance. Companies, especially small and medium businesses, are more cautious about the risks of adapting to a new form of software, than its benefits. In such a situation, accounting software professionals must stand out as an expert and mitigate all risks from the clients’ mind. They must make the best recommendations and win the trust of clients and create a win-win situation.

3. Forming a Brand Portfolio

In order to make the best software suggestions, a good way is to look back at similar clients or businesses and analyze their needs, preferences, pattern of usage, and level of satisfaction. In this way, the accounting staff has to form a brand portfolio of their past cloud software services and showcase their experience to impress prospective clients.

4. Collating the Above Factors

And after all such efforts, software professionals must collate all their findings and put them in one place. By going through the client's needs, offering the best choices, and going by past experience; the software team can provide the best possible solution to their clients. In this way, they can customize the software and fulfill the purpose. With the best suggestions, they can sustain their clients for a lifetime.

Top Trends in Online Accounting Software

1. Cloud Is No Longer ‘Future’

With the world moving towards cloud technology, it’s no longer an aspiration. In fact, the cloud is the talk of every business. Today, most small, medium and large companies are embracing cloud modules to ease their accounting system. They find cloud more user-friendly, convenient, and cost-efficient. Thus, cloud-based accounting software is the ‘current trend’ of every industry.

2. Most Businesses Are Happy With Traditional Software

Although business heads might talk cloud, yet they hesitate from being a regular cloud user. The problem of functionality still persists in the minds of top management. Where new businesses and startups give a quick go-ahead to cloud-based software, older companies prefer to cling to their traditional software modules. According to a survey, the difficulty lies in changing the mindset from traditional to cloud technology. Nonetheless, while businesses have started believing in incorporating cutting-edge technology, online accounting software professionals must think of ways to break the taboo and bring more businesses within the cloud domain.

3. Innovation In Cloud Based Accounting Software

Cloud based accounting software has come up with a new feature and module, known as Blockchain. It is an amazing application and helps users to manage their digital conversations in a cost-efficient manner. Blockchain gives fair, transparent, and traceable ways to streamline communication and track all accounting and financial data from a centralized location.

An overview of Online Accounting Software

In a layman’s language, Cloud based online accounting software makes the entire system of financial transactions transparent by keeping a tab on them. The most common and basic features included are – managing and updating the general company ledger, payments received and paid payroll, and recording modules. Often supplementary features are provided as per your need like – fund bookkeeping for non-profit purposes, claiming for medical purpose and calculating the extra commissions for sales-based businesses like real estate, brokers and rate analysis for banks. Same as the most useful Personal Finance Software will provide you with plenty of user-friendly features so that you can deal with all parts of your accounts.

Why is it most preferred? There is no need for extra hardware as it is directly hosted on the internet. These online accounting services for small businesses require an active server, also this online accounting software has regular back-up facilities and reduces the expenditure cost that can be paid as monthly or annual fee.

The two types of best online accounting software are SAAS – browser-based and Application Service Providers (ASP) – client based. The SAAS being designed to be used via Internet browsers like Chrome, Safari, Explorer can be accessed by the user from anywhere in the world. In the ASP, the small “client” software is installed onto the business’s computer. Both these are hosted on a server. The ASP can be “web-enabled”, however, it is not designed for that purpose hence they may not operate very seamlessly on a web browser.

The Vendor – Buyer Scenario

From the innumerable software out there, it can be an ordeal to choose the best one and the cost of selecting the wrong one can have numerous side-effects. So we have prepared a list of the vendor – buyer table category-wise.

Type of Buyer Vendor software options
Full fledge Cloud-based accounting solutions Busy, Tally, Saral (Synchronization) ProfitBooks, Quickbooks, Reach, Zoho Books, Xero
Basic Cloud Accounting systems for Small businesses Reeleezee, Handdyaccounts, Waveaccounting, Zipbooks, Bean cruncher, Gurilla, Zoostr

Market trends that you should be aware off

1.Customization as per your requirements

Most of these solutions are agile and allow the user to pay only for the services they use. So if your business needs core accounting and not tracking of sales management, then it would not be included. The benefit of this is that you don’t pay extra charges, only pay for what is used.

2. Electronic payment gateways

They offer numerous advantages like online paying off bills and receiving payments. They save time and transport expenses of your customers and the benefit of online receipt generation is that the accounts are maintained transparent without chances of getting lost or misplaced.

3. SAAS for large enterprises

The SAAS offers many benefits that like the ERP, CRM (Customer Resource Management), Sales and invoice management, and outlet resource management and finance management software. They are highly functional and target large businesses that require all these features. They are multifarious and have diverse functions, this is their main benefit.

The above trends have changed the name and face of the accounting software industry. With changes in accounting software, accountants are also changing their outlook and perceptions. They are constantly updating themselves with the latest trends and versions of cloud-based accounting software. Armed with such knowledge and proficiencies, today’s accountants overwhelmingly propose cloud technology for creating a customized experience for their clients.

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Nikunj DudhatBy Nikunj Dudhat | Last Updated: October 27, 2020

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