Over the past couple of years, I’ve moved a lot of my traditional “software” based tasks to the cloud. You can read about it here: I Started Moving My Finances and Business To The Cloud. There are so many great tools that I have been able to take advantage of, including Google Docs and Google Apps email.
However, over the past year, one area that I have been struggling with is finding a good cloud based accounting software that could complete with QuickBooks. Well, after searching and searching, and trying out various companies and options, I’ve finally come to a conclusion.
** I just updated this in April 2013 with the latest from these companies. I’m always experimenting with new cloud-based software, so if you have any suggestions, please let me know in the comments!
Online Accounting Software Choices
Quickbooks Online – Since Quickbooks has been my bread and butter accounting software choice for over 5 years, I’d thought I’d look into using them in the cloud. The great thing about Quickbooks Online is that is has all the features of Quickbooks Pro software, just available anywhere. As a result, you can integrate it with other Quickbooks applications, like Payroll and more.
The downside of Quickbooks Online is the price: the cheapest option starts at $12.95 per month, with more features available at $26.95 per month and $39.99 per month. To get payroll included, you jump up to $52.76 per month and $63.18 per month.
Even the cheapest option is $155 per year, which is just as expensive as purchasing Quickbooks Pro (which currently retails for $183.95). If you use Quickbooks online for over a year, it just isn’t worth it.
However, Quickbooks Online does offer a current 30 day free trial of its software, so you can give it a go without committing.
Freshbooks – Freshbooks was recommended to me by a consultant that I used on a project. He was very happy with it, especially the online invoicing part. As a customer, I also thought that the online invoicing was a pretty neat aspect. Freshbooks started with the easy to use online invoicing, and now has a full suite of accounting aspects to keep track of everything. It is very client focused – with calendars for organization and ways to collaborate.
The good thing about Freshbooks is that not only can you try it free, but they have a free option that lets you manage up to 3 clients. It’s not much, but it does give you a sense of what it would be like to use full time.
The downside, once again, is the ongoing cost of Freshbooks. To manage 25 clients, it now becomes $19.95 per month, and for unlimited clients, it jumps to $29.95 per month. If you want team management functions, it runs $39.95 per month. So, for the basic level, you will pay $239 per year to manage 25 clients.
Kashoo – Kashoo was the next system I tried out, and it interested me because it had automatic bank import functions to import and categorize your transaction (I love automated). It also had the basic accounting functions like Quickbooks, but was a little more automated. The great thing is that it can import your bank information automatically, which is helpful and time saving.
The biggest drawback was the lack on invoicing available on Kashoo. Instead, they want you to partner with Freshbooks to invoice your customers, or just manually enter the sales.
The good thing about Kashoo is that they have a free level, that includes all the accounting software (non-automated), as well as iPhone and iPad apps (which was very handy). However, to get access to the good features, like templates, you must sign-up for the first level of service, which is $10 per month. They also have an unlimited team version for $20 per month, which is also what you need to get if you want payroll integration.
At $10 per month, or $120 per year, this is the cheapest option of the paid online accounting programs so far, and it is pretty good in terms of features available as well.
Outright – Outright was the final choice for paid programs, and it is neck and neck with Kashoo. The great thing about Outright is the automation – everything is automatically pulled from your bank accounts and categorized. This is even included in the free option.
The drawback of Outright was that they charge $9.95 per month for their first and only level of service, but it is this level that has access to all the reporting you would want. Otherwise, all Outright does is keep track of the basic profit and loss. I also found it a little more difficult to use that Kashoo.
Bean Cruncher – Bean Cruncher is one of the newest online bookkeeping and accounting programs out there, and I was glad I stumbled up on. What I really like about Bean Cruncher is the speed and interface. Their online system runs quick, which is great – especially when you are entering a lot of invoices. Their main dashboard is also really helpful, with all of the key data displayed right when you log in.
The only thing holding my back from Bean Cruncher is the price – it starts at $19 for up to 150 customers, then $39 for 500 customers, and $99 for unlimited customers. In my business, I’d hit 150 customers pretty quickly, because I get a lot of one-time customers. This was the main problem I ran into with Freshbooks. Even though the software is great, it’s hard to beat free.
Xero Online Accounting Software – I was turned on to Xero by the readers in the comments below (thank you)! Of course, when someone mentions that this is the best online accounting software out there, I have to go check it out for myself. And I have to agree – this is the most power online accounting software I’ve found to date. The features and services of this program rival Quickbooks, which is impressive. There is also easy integration for bookkeepers and accountants.
Xero is a bit different from most online accounting software in that they are targeting accountants and bookkeepers as their target audience – they want accountants to use the software, and setup their clients on the program. You can still use the software if you’re a small business, and it is still great.
Once again, pricing matters. Since this is the most powerful online software, I wasn’t surprised to see the prices be high. The entry level is $19 for 5 invoices per month. The next level up covers pretty much everything you need, at $29 per month you get 100s of invoices. They do offer a $39 per month tier, but you only need this if you do multi-currency accounting.
Best Online Accounting Software
Wave Accounting – My personal pick for the best online accounting software is Wave Accounting. It took me a long time to find this company, and they were actually referred to me by a Twitter follower! However, I’m glad I found them.
This company does it all – invoicing (you can even send them to customers online), accounting, and reporting. And the best part, is that it is free. There are no costs for using Wave, and they maintain a business model similar to Mint, where they are paid through affiliate sales.
As of 2013, they also started an online payment system for their invoices, which does cost money, but the rate is cheap – 2.9%. If you’re sending invoices and need to accept credit cards, this is a great solution that continues to distinguish Wave as one of the best online accounting programs out there.
I’ve supported them since these affiliates also provide good deals on business related products. If you are interested in an online accounting program, Wave Accounting is the best option to check out.