There are many different types of online accounting software out there, what type should I use for MY business?
To help answer that, let me first briefly talk about the evolution of personal computing. The very first computers used by both consumers and businesses were desktop computers, and they were the mainstay of personal computing for many years. Next came laptops, then came the smartphone, shortly followed by the tablet. These devices have expanded what you can do with a computer and changed how you use one. As the devices became smaller and with the advent of the Internet, work suddenly became mobile, allowing knowledge workers to ply their trades from anywhere, at any time.
Accounting software has undergone this same shift. From pen and paper, to spreadsheets, to desktop accounting software. And now there’s the cloud and the term online accounting or cloud accounting software. A new problem that has arisen is that a lot of software related to small business accounting falls under the umbrella category of online accounting software. However, just like there are many types of computing devices (desktop, laptop, tablet, smartphone), there are many types of online accounting software as well. Some are better suited for certain functions and types of businesses than others.
Online Accounting Software Types
My task today will be to help you navigate the different types of online accounting software so that you can choose which one is the best fit for yourself or your clients.
As I see it, the six main types of online accounting software are:
- Personal
- Expense
- Invoicing
- Micro-business (Soloprenuer)
- Small Business
- Enterprise
Most online accounting software has certain “core” features such as posting to the general ledger. Each product, though, can have additional capabilities, such as inventory, expense management, project management, payment processing, payroll, and so on. Part of the big difficulty in navigating the complicated waters of software for your business’ accounting needs, is that there is a lot of crossover in functionality between these different products. There’s also a huge difference between users, from the big picture accountants, to the detail oriented bookkeepers, to the get-this-done-so-I-can-do-something-else small business owners. Lastly, what works well for an owner-operated business probably won’t work so well for the small business with 25 employees.
So, I’ll start off describing personal software and work my way up to enterprise software.
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