Business owners, freelancers and entrepreneurs often spend a large chunk of time on administration and accounting. Suited for small- and medium-sized businesses (SMBs), Xero is an affordable cloud-based accounting software system that streamlines these processes with plans starting at $20 per month. Receipt capture and the ability to automatically generate bills from captured receipts were also part of our A/P evaluation. Generally, Xero is easy to use, and you can set up your company information in no time. It scored well across all the categories I evaluated, especially sales tax, inventory, project management, and banking.

If you’re entering expenses and income regularly and categorizing transactions, you can pull up an accurate report at any time. Blockchain technology is transforming accounting by introducing unprecedented transparency and security. As a decentralized ledger, blockchain records every transaction in a tamper-proof manner, ensuring the integrity of financial data. This is particularly beneficial for audit trails, where accurate records are critical. Blockchain allows auditors to trace transactions back to their origin, significantly reducing the risk of fraud and error.

Automated features to save you time

These experiences enriched her understanding of small business management and marketing strategies. Today, she channels this first-hand knowledge into her articles for Forbes Advisor. However, before you make your final selection, it is always best to make sure the software is compatible with your operating system. This streamlines workflow and allows you to ask your advisor or accountant questions directly, all based on the most up-to-date versions of documents.

• The software can integrate with a whole ecosystem of third-party business apps.
• Xero processes payment through a payment gateway like Stripe, GoCardless and others.
• You can use cloud-based software from any device with an internet connection.
• Also consider whether you want to choose an accounting software that can scale with your needs for many years or if you’re okay with choosing something that works for now and potentially switching platforms later down the line.

If your business is growing and needs a cohesive, safe and streamlined accounting solution, cloud computing may be for you. Let’s take a deeper look at cloud computing, what it is, how it works, and how it can benefit your business. Software updates can be developed and delivered faster and more easily in the cloud. This means you don’t need to worry about installing the latest version and you’ll get access to new features instantly. With cloud accounting software, you have the option to run your business remotely, from anywhere in the world. Once you’re set up in Xero you can import all your data from your previous accounting software, including the chart of accounts, invoices, bills, contacts, and fixed assets.

This can save your company time and money by not having to employ an in-house IT representative to deal with the software. Cloud-based accounting software is hosted online, so you don’t need to buy a program to install it on your computer. Smart contracts—self-executing agreements with terms embedded in code—are another application of blockchain reshaping accounting practices. These contracts execute transactions automatically when predefined conditions are met, reducing manual intervention and transaction costs.

Is cloud accounting software suitable for all types of businesses?

Nothing stays the same cloud accounting forever and everyday new technologies are being developed that will impact the future of Canadian small businesses. From the help of AI to continued integrations, the future of cloud-based accounting systems has never looked brighter. In fact, balances reflected by your entries with cloud accounting have a high level of accuracy, as far fewer errors occur in cloud accounting than in traditional, manual accounting. AI’s ability to perform sentiment analysis on news articles and social media posts is another game-changer. By evaluating public sentiment, AI tools can predict market reactions to corporate announcements or economic events, allowing financial analysts to make more informed decisions.

Access your accounts anywhere

Whether you’re a restaurant owner, local merchant, or training organization, small and medium-sized businesses encounter numerous challenges not necessarily tied to their core operations. Unlike larger corporations, SMEs often lack the human resources needed to manage their accounting and customer relations effectively. In the event of a natural disaster or fire, being in the cloud means business productivity doesn’t need to be affected because there’s no downtime. As long as you have access to any computer or mobile device connected to the internet, you’re back up and running.

Accounting software that connects to your bank

Xero is an affordable cloud-based accounting software system that is highly rated among small businesses. Its simple solution for tracking income and expenses makes it easy to use for those without accounting skills. Top features for every plan include the ability to create and send invoices, track time and project profitability, claim expenses, bulk reconcile transactions and accept multiple currencies. Starting at £50 a month, which goes down to £5 per month for the first three months during the current promotion, QuickBooks offers four subscription plans ensuring users only pay for the features they need. Its basic plan, Simple Start, allows users to track mileage, create invoices, process payments, capture receipts, manage cash flow, get tax estimates, run reports and manage contractors. Wave offers a free-for-ever accounting and invoicing tool, along with a more expansive paid plan with thorough features.

Do I need accounting software for my small business?

This platform centralizes all the data for smaller enterprises, optimizing daily accounting and commercial management. The beauty of online accounting software is the flexibility it gives you to run your business from work, home, or on the go. You can be confident that you have an up-to-date picture of how your business is doing, no matter where you are. In addition to this, if you invite users to view your data, you can control the level of access. This is much more secure than the old-fashioned way of emailing your files or sending out a USB stick with your data on it.