Which Cloud Software should I choose?

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The Cloud Accounting Software Industry has grown significantly over recent years. For nearly 30 years Desktop Accounting Software or Spreadsheets were the only computerised accounting options for businesses. The introduction of Cloud Accounting (CA) in the early noughties changed the accounting software landscape dramatically. 

 

What to consider

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If you are a business owner looking to migrate from a desktop software to a cloud software you should consider all of the following: 

 

• What Accounting functionalities do you require?

• How do you intend to access the software?

• How many users require access to the software?

• What permissions do these users require?

• What information do you require from the software (i.e. Budgets, Management Accounts)?

• What costs are you willing to bear? 

 

Below we have included information on three of the most common CA packages available. All have the same double entry functionality but each has its own features that may make it more attractive to you and your business.

 

Quickbooks Online 

 

Quickbooks is one of the most popular accounting products on the market. It is designed as a simple and affordable CA software. There are different levels of subscription available on Quickbooks to cater for different sized businesses, however, it is mostly used for small to medium sized businesses. If your business is expanding rapidly (or you want it to expand rapidly), then Quicbooks may not fulfill your needs.

 

Quickbooks features double entry software that is robust. Users are able to manage their Trade Receivables, Trade Payables, Bank Accounts and General Ledger Accounts. Next we will discuss the different tiers of Quickbooks and what these offer. 

 

Simple Start

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This is the least expensive subscription. Simple Start allows you to send unlimited invoices, connect your bank, manage income and expenses. Simple start offers a lot of accounting features for the basic subscription, one downside to simple start is that it only allows for one user.

 

Essentials

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This allows you to do all of the above but in addition you are able to pay bills, track time, manage multiple currencies, and give access to three users. 
 

Plus

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This allows you to do all of the above but in addition you are able to track profitability and inventory, track transactions by class, create budgets and you have access to more robust reports. Plus allows access to five users. 

 

Quickbooks Online Payroll

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All product tiers integrate with Quickbooks Online Payroll (QOP). Payroll is not part of the above tiers and comes at an additional fee. QOP automates the payroll process, making it relatively straight forward, it also automatically pulls the information into your general ledger. 

 

Pros of Quickbooks

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Quickbooks is simple and modern. It is easy to use but also easy to learn if you have little accounting experience. All tiers give customers access to support. There are also many videos available online to help you along the way. The software has a lot of integrations which mean it can be linked to other third party software. 

 

Cons of Quickbooks

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Quickbooks reports can sometimes be confusing and having to pay additional fees for payroll is not ideal. The basic package is limited to one user on the subscription. 

 

We would recommend Quickbooks for individuals looking for simple and affordable software. Businesses looking to grow should consider another package.

 

Xero

 

In 2006, Xero entered the Cloud Accounting scene. Unlike many other competitors, such as QuickBooks, Xero was always designed as a cloud-based product with specific benefits in mind.

 

Xero is available at multiple subscription levels. At each level, Xero offers a double entry accounting platform with a chart of accounts. The software could be described as the most versatile on the market due to its integration with third party applications. Over 700 third party apps can be used with Xero, making it very versatile. If you are wondering whether Xero would be a good fit for your business, its versatility means it most probably is! 

 

Starter Plan

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This is the lowest priced subscription and is targeted at sole traders and new businesses . It allows users to send up to 20 invoices, Enter 5 bills, reconcile bank transactions, Submit VAT returns to HMRC. The plan is fairly limited due to the capped level of invoices and bills you can enter, but this doesn’t necessarily mean it wouldn’t be suitable for your business. Get in touch for more information on whether you could use the Xero Starter Plan.
 

Standard Plan

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This plan is targeted at growing small businesses, it gives the same functionality as the starter plan but allows users to create unlimited invoices and bills. In addition, you can bulk reconcile transactions and perform Short-term cash flow and business snapshots. 

 

Premium Plan

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Includes all the features above plus multi-currency tracking, capture and managing expense claims, project timings and cost tracking. 

 

All the plans above, unlike other software, allow for as many users as required. Xero Payroll is also available but comes at an additional cost. Xero supports single business subscription meaning that if you have two businesses you will require two separate subscriptions. 

 

Xero Integration

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Where Xero excels is with it’s integrations. Xero integrations allow you to use other third party applications with Xero to streamline your accounting function. For example: 

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Expensify = allows you to facilitate staff business expenses 

Chaser - automatically chases customers for monies outstanding

Dext - processes purchase invoices - allocating both the expense and any VAT

 

Pros of Xero

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The intuitive design of Xero makes reporting simple. A great deal of useful information is available on the dashboard. Reports are available to download in both PDF and Excel formats. Reports are also easily customizable to produce Monthly or Quarterly reports with comparatives. 

 

Cons of Xero

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Many people say that customer service at Xero is poor, we have never had an issue with them so we would tend to disagree. Although the design makes reporting simple, without training it can be easy to duplicate transactions. Multi-currency is only available on the most expensive plan. 

 

We would recommend Xero for businesses looking for accounting software to maximize the success of their business. If you are interested in paying that little bit more per month to get your accounting system accurate and streamlined, Xero is the only choice.

 

Sage Business Cloud

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Sage Business Cloud (Previously Sage One) can help users keep track of their accounts receivable and payable, reconcile their bank statements and access reporting features and other app integrations. An individual new to cloud accounting should find the simplicity and basic functionality an excellent starting point. 

 

The Software has a similar basic functionality as the two mentioned above. It allows business owners to keep track of incomings and outgoings. The dashboard is simple and enables for easy cash flow forecasting. Customers can personalise their invoices and built in reports allow users to print reports such as Profit and Loss or Balance Sheet. 

 

Accounting Start

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This product includes Sage’s basic functionality. Users are able to create and send invoices, reconcile their bank accounts and calculate and submit their VAT. Accounting start only allows for one user. 

 

Accounting 

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The Accounting product includes the above support but allows for unlimited users. Accounting allows users to manage and submit CIS, run more advanced reports, Send quotes and estimates, forecast cash flow and manage purchase invoices. The accounting packages also allow for accrual based accounting.

 

Mobile App

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Available on both IOS and Android, the mobile app allows users to capture receipts and enter them automatically to the dashboard.The Accounting tier subscription includes an auto entry feature which automatically processes these receipts, using clever technology that learns where in the chart of accounts to allocate the expense. 

 

Pros of Sage 

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A unique feature of Sage is they provide a “getting started” checklist, this helpful tool makes setting up on cloud software much easier. The inventory tracking feature is a useful tool to have built in to the software.

 

Cons of Sage

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As Accountants we find Sage particularly difficult to use compared to some of its competitors. Reports do not download as clearly as there are some strange defaults in the software. The Sage customer support is also not the most efficient.

 

We would recommend Sage for individuals that require inventory tracking i.e. small shop or ecommerce business. For other businesses looking to grow their business we would advise choosing Xero over Sage as we feel you get far more for your money. 

 

There are a lot of factors to consider when choosing on a Cloud Accounting Software Package. We hope the above has given you an insight into the features of our top 3! If you would like to discuss the benefits of each in more detail please do not hesitate to get in touch.

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