Choosing Between Free and Paid Small Business Accounting Software

Service sectors with lots of competition often breed gobs of ever cheaper deals to entice new customers. In the accounting software industry, the latest trend is to offer software at no charge while looking to capitalize downwardly the road. Sometimes these offerings can brand a lot of sense for sure businesses, simply companies experiencing rapid growth need to be conscientious.

With freemium, small business, and enterprise tools available, it can be hard for small to midsize businesses (SMBs) to make up one's mind which solution is right for them. You might have the money to buy expensive software such as Cougar Mountain Denali Summit and Microsoft Dynamics GP, merely practice you lot actually need all of that customization functionality and calibration? Conversely, yous might be able to become away with using free tools past companies such as Wave, only is the tool smart plenty to handle more complex tasks?

To find out what SMBs should wait for when choosing paid bookkeeping software, I spoke with Scott Davisson, co-founder of Acclivity, provider of desktop-based small-scale business accounting tool AccountEdge. I asked him about pricing, flexibility, security, and client service.

Does Your Paid Software Do More than Than the Cadre Four?

Davisson said most of the free accounting tools can handle account management, expense tracking, invoicing, and sales. These are the bare minimum tasks that whatever tool should exist able to assist you accomplish, regardless of how much you're willing to pay.

"That's the core," said Davisson. "If all y'all need is to practice that, then you're probably fine on a freemium model. As those needs get more complex…that's where y'all might start to evaluate your needs about what's out in the market and how much information technology costs."

Additional needs might ascend that your freemium tool tin can't handle. If you need software that can handle things such as billing for time, inventory tracking, and payroll, you're probably going to need to invest in a paid tool. As well, although most gratuitous tools can handle sales data, if your business has multiple departments, you lot might want to consider going with a more than complex tool considering nigh freemium tools won't permit you to enter sales data by department (rather, you'll demand to enter the data as one lump unit).

How Flexible is Your Accounting Tool?

Ane of the main reasons businesses select enterprise-level accounting software over lower-cost or freemium applications is that enterprise tools often provide limitless customizations that can bend and layer the software specific to each client'south needs. Pocket-size business organisation tools, such equally the one provided by Acclivity, won't offer that level of complexity.

However, this doesn't mean you're stuck with what comes out of the box. Think about what third-party integrations your SMB software offers. Does it integrate with a client relationship management (CRM) tool? Does it pull in data from your e-commerce software? If a minor business accounting tool can provide you with multiple integrations and add-ons, then y'all might not need to spend big bucks on an enterprise-level platform.

"The software needs to be flexible enough to meet your needs," said Davisson. "But it's a tricky goal. Our software isn't for one specific type of industry. Nosotros demand to have a solution that fits your needs, but we don't have that out-of-the-box customizability. Nosotros're sort of similar a Swiss Army knife. Our add-ons give customers additional components that bolt onto the software to continue to make it relevant to their needs."

Is Your Software Secure?

One of the main points of differentiation that you'll find betwixt enterprise-class, SMB, and freemium bookkeeping software is the level of security that your vendor intends to provide. If you're non paying a cent for your software, do you realistically expect Fort Knox-level security?

This is 1 of the reasons Davisson said his clients adopt on-premises software to cloud-based tools. "A lot of people are pulled to the cloud against their will," he said. "But they don't trust their finances in the deject. It'due south about security and control."

AccountEdge is a desktop-based tool that can exist expanded into the cloud with a companion app. Still, Acclivity doesn't offer a cloud-merely version of the tool. "Part of why nosotros're seeing a lot of activeness and involvement is because, once nosotros license the desktop software, you can put it on your own network, behind a firewall, it'southward yours," Davisson said. "In terms of security, that gives you the ultimate control."

This doesn't mean that deject-based tools are inherently less secure than desktop apps. For example, Intuit QuickBooks Online Plus stores data on firewall-protected servers where the data is encrypted. When your data leaves the spider web browser, it's transmitted over Secure Sockets Layer (SSL) encryption technology. Intuit too lets administrators limit who can access specific types of information inside the tool should they determine to make certain data available to executive-level employees simply.

How to Choose Between Free and Paid Small Business Accounting Software

Client Service

This ane should exist a no-brainer. The more competitive a marketplace becomes, the more of import client service has to be. Can you attain your accounting software vendor if and when something isn't properly working? Tin you achieve them on the medium of your option or do they force y'all to option a specific communication platform? Are the service representatives speaking your language or did the vendor outsource its help desk team?

These are incredibly important questions you should ask each of your prospective vendors. Information technology's highly likely that enterprise-level accounting software will offer 24/7 support, especially if you're willing to make 5-effigy annual payments or more. Still, if you're trying to cull among a listing of freemium and paid SMB tools, you'll want to closely investigate your service options.