Overview of Popular Accounting Software for Small Businesses

In today’s fast-paced business environment, efficient financial management is crucial for the success of small businesses in New Zealand and Australia. Accounting software has become an indispensable tool, streamlining financial processes and providing valuable insights. This article explores the landscape of accounting software, focusing on popular options available to small business owners in these regions.

The Evolution of Accounting Software

Accounting software has come a long way since its inception. Initially, these programmes were complex, desktop-based applications that required significant technical know-how. Today, we’ve seen a dramatic shift towards cloud-based solutions, offering unprecedented accessibility and ease of use.

Modern accounting software brings numerous benefits to small businesses:

• Real-time financial visibility
• Improved accuracy and reduced human error
• Time savings through automation
• Enhanced collaboration among team members
• Access from anywhere with an internet connection
• Regular updates and improvements without manual installations
• Better compliance with tax regulations
• Improved cash flow management
• Enhanced data security and backup

These advantages have made accounting software an essential tool for businesses of all sizes, particularly for small enterprises looking to optimise their operations and compete effectively in the market.

Key Features to Look for in Accounting Software

When evaluating accounting software, several key features should be on your checklist:

1. Invoicing and billing: Create and send professional invoices, track payments, and set up recurring invoices. Look for software that allows customisation of invoice templates to match your brand.
2. Expense tracking: Log and categorise expenses, capture receipts, and generate expense reports. Some advanced software even offers OCR (Optical Character Recognition) technology to automatically extract data from receipts.
3. Bank reconciliation: Automatically import bank and credit card transactions, matching them with your records. This feature saves time and reduces errors in manual data entry.
4. Financial reporting: Generate comprehensive financial reports, including profit and loss statements, balance sheets, and cash flow statements. Look for software that offers customisable reports to suit your specific business needs.
5. Payroll management: Calculate wages, manage leave, and process superannuation payments. Ensure the software complies with New Zealand’s payroll regulations, including PAYE and KiwiSaver.
6. Inventory tracking: Monitor stock levels, set reorder points, and track cost of goods sold. This is particularly important for retail and manufacturing businesses.
7. Multi-currency support: Essential for businesses dealing with international clients or suppliers. Look for software that can handle foreign exchange rate calculations automatically.
8. Integration capabilities: Connect with other business tools such as payment gateways, CRM systems, or e-commerce platforms. This allows for a more streamlined workflow across your entire business operation.
9. GST management: As a New Zealand business, you’ll need software that can handle GST calculations and reporting. Look for features that simplify your GST return process.
10. Project tracking: For service-based businesses, the ability to track time and expenses against specific projects can be invaluable for accurate billing and profitability analysis.

Popular Accounting Software Options

Let’s explore some of the most popular accounting software options available to small businesses in New Zealand and Australia:

Xero

Overview: Xero is a cloud-based accounting software that has gained significant popularity in New Zealand and Australia. Founded in Wellington, it has a strong understanding of local business needs.

Key features:

• User-friendly interface
• Comprehensive reporting
• Extensive third-party app integrations
• Robust inventory management
• Multi-currency support
• Automated bank feeds
• Mobile app for on-the-go access
• Built-in payroll for New Zealand businesses

Pricing: Xero offers tiered pricing plans starting from basic to premium options.

Pros:

• Excellent mobile app
• Regular updates and improvements
• Strong presence in NZ and Australia with localised support
• Intuitive dashboard with real-time cash flow updates
• Large ecosystem of add-on applications

Cons:

• Some advanced features only available in higher-tier plans
• Can be overwhelming for very small businesses or sole traders
• Limited customisation options for invoices in lower-tier plans

Suitability: Ideal for small to medium-sized businesses across various industries, particularly those looking for a scalable solution.

MYOB

Overview: MYOB (Mind Your Own Business) is one of the oldest and most established accounting software providers in the region, with a strong presence in both New Zealand and Australia.

Key features:

• Comprehensive accounting tools
• Payroll management
• Inventory tracking
• Job and project costing
• Bank feeds and reconciliation
• GST tracking and reporting
• Time billing for service businesses
• Customisable dashboard

Pricing: MYOB offers various products with different pricing tiers to suit businesses of different sizes.

Pros:

• Strong brand recognition and trust
• Tailored for Australian and New Zealand businesses
• Robust reporting capabilities
• Good customer support
• Comprehensive training resources available

Cons:

• Interface can be less intuitive compared to some newer options
• Some users find the software can be slow at times
• Higher-tier plans can be expensive for small businesses

Suitability: Well-suited for established small to medium businesses, particularly those in retail or manufacturing sectors.

QuickBooks Online

Overview: QuickBooks Online is a cloud-based version of the popular QuickBooks software, known for its user-friendly interface and comprehensive feature set.

Key features:

• Easy-to-use dashboard
• Customisable invoices
• Comprehensive reporting
• Time tracking
• Mobile app for on-the-go access
• Inventory management
• Project profitability tracking
• Multiple user access with permission settings

Pricing: Offers several plans ranging from basic to advanced features, starting from around NZD 30 per month.

Pros:

• Intuitive user interface
• Excellent mobile app
• Good integration with third-party apps
• Strong reporting capabilities
• Regular feature updates

Cons:

• Some users report occasional syncing issues
• Advanced features may require higher-tier plans
• Less localised for New Zealand compared to some competitors

Suitability: Great for small businesses and freelancers who prioritise ease of use and need a comprehensive feature set.

Reckon One

Overview: Reckon One is an Australian-developed cloud accounting software designed for small businesses, with features tailored for the Australasian market.

Key features:

• Modular pricing structure
• Bank feeds and reconciliation
• Invoicing and expense tracking
• Payroll management
• BAS and GST reporting
• Time and project tracking
• Customisable dashboard

Pricing: Unique modular pricing allows businesses to pay only for the features they need.

Pros:

• Flexible pricing model
• Tailored for Australian and New Zealand businesses
• Good customer support
• Scalable solution as your business grows

Cons:

• Less popular than some competitors, which may limit integrations
• Interface not as modern as some alternatives
• Some users report a steeper learning curve

Suitability: Good for small New Zealand and Australian businesses looking for a cost-effective, locally developed solution with a flexible pricing structure.

Saasu

Overview: Saasu is an Australian cloud-based accounting software known for its simplicity and affordability, with growing popularity in New Zealand.

Key features:

• Invoicing and quotes
• Inventory management
• Multi-currency support
• Payroll processing
• Financial reporting
• Project costing
• Purchase order management

Pricing: Offers a range of plans suitable for different business sizes.

Pros:

• Simple and straightforward interface
• Good value for money
• Solid inventory management features
• Suitable for businesses with foreign currency transactions

Cons:

• Less well-known, which may limit third-party integrations
• Some users report occasional performance issues
• Limited customisation options compared to some competitors

Suitability: Well-suited for small businesses and startups looking for a straightforward, affordable solution with solid features for inventory management and multi-currency support.

Wave Accounting

Overview: Wave is a free accounting software that offers basic features suitable for very small businesses or sole traders. While not specifically designed for the New Zealand market, it can be a good option for businesses with simple accounting needs.

Key features:

• Free core accounting features
• Invoicing and receipt scanning
• Income and expense tracking
• Financial reporting
• Multiple currency support
• Double-entry accounting system

Pricing: Core accounting features are free, with paid add-ons for payroll and payment processing.

Pros:

• Free for basic accounting needs
• User-friendly interface
• Unlimited income and expense tracking
• Good option for businesses on a tight budget

Cons:

• Limited features compared to paid alternatives
• Advertising within the free version
• Less tailored for New Zealand markets (e.g., no built-in GST support)
• Limited customer support options

Suitability: Ideal for micro-businesses, freelancers, or sole traders with simple accounting needs and limited budgets.

Factors to Consider When Choosing Accounting Software

When selecting accounting software, consider the following factors:

1. Business size and type: Ensure the software can handle your transaction volume and industry-specific needs. For instance, a retailer might need robust inventory management, while a service-based business might prioritise time tracking and project management features.
2. Budget: Consider both immediate costs and long-term value. While some solutions might seem cheaper initially, they may lack features that could save you money in the long run.
3. Ease of use: Look for intuitive interfaces and good user reviews. Consider the technical skills of your team and choose software that won’t require extensive training.
4. Scalability: Choose software that can grow with your business. It should be able to handle an increasing number of transactions and users as your business expands.
5. Customer support: Check the availability and quality of customer support. Look for providers offering multiple support channels like phone, email, and chat, as well as comprehensive knowledge bases and tutorial videos.
6. Integration capabilities: Ensure the software can connect with other tools you use, such as CRM systems, e-commerce platforms, or point-of-sale systems.
7. Compliance: Verify that the software meets local tax and regulatory requirements, particularly for GST reporting and payroll management in New Zealand.
8. Data security: Look for software with robust security features, including data encryption and regular backups.
9. Mobile access: In today’s mobile world, having access to your financial data on-the-go can be crucial. Check if the software offers a comprehensive mobile app.
10. Reporting capabilities: Ensure the software can generate the financial reports you need, with options for customisation to suit your specific business requirements.

Implementation and Adoption Best Practices

To ensure a smooth transition to new accounting software:

1. Plan the transition carefully, choosing a less busy time for your business. The end of a financial quarter or year can be ideal.
2. Consider professional help for data migration to ensure accuracy. This is particularly important if you’re moving from an old system with years of historical data.
3. Provide thorough training for all staff who will use the software. This might include formal training sessions, online tutorials, or one-on-one guidance.
4. Start with a trial period if possible. Many software providers offer free trials, allowing you to test the system before fully committing.
5. Establish new accounting processes that leverage the software’s capabilities. This might involve updating your chart of accounts, setting up automated bank feeds, or creating new invoice templates.
6. Regularly review and optimise your use of the software as your business grows. Schedule periodic check-ins to ensure you’re making the most of all available features.
7. Keep your software updated to ensure you have access to the latest features and security patches.

In Summary

Choosing the right accounting software is a crucial decision for small businesses in New Zealand and Australia. By carefully considering your business needs, budget, and the features offered by different solutions, you can select a tool that will streamline your financial management and provide valuable insights for decision-making.

For businesses looking to optimise their cash flow further, FundTap integrates with popular accounting software to provide on-demand invoice financing, helping small businesses manage their finances more effectively.