There are many small business accounting and bookkeeping softwares. You will quickly become overwhelmed by the number of software options available to small business owners. What software should you choose? Which features are included? Do I want all features? Or just the ones that I need? These questions are endless and unanswered. Don’t be discouraged if this is your situation. There is still hope. Continue reading. After reading this post, you’ll have all the information you need to make informed buying decisions. First some questions about you.
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- What size is your business?
According to Small Business Administration, a small business is any privately-owned business with less than 100 employees.
That’s enough.
This definition is quite large. 100 employees is not a small number.
If you assume that each employee is paid $3000/month, you will be paying $300,000./month in salary.
This is a good chance that you won’t be searching for accounting or bookkeeping software online if you own a business.
Software companies will have sales agents waiting to sell their software.
You are probably looking for small business software online.
How small is your business?
You own a company with less than five employees.
Most probably even less.
Only one employee.
Yourself.
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- What are you selling?
Do you sell a product or service?
Or just services?
Are you making the product yourself or buying it pre-made?
Are you selling through your website or in a physical store?
How can you find customers?
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- What is the data volume of your company?
Good data volume is a sign of a successful business.
What is it worth?
How many orders are you able to place per month?
How many customers are added each month?
How do you store your data?
How much data?
What is the expected growth rate for data?
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- Are you a webmaster?
Web sites are now a standard feature for almost all businesses, large and small.
Do you have one?
Do you have one?
Do you want your software to seamlessly integrate with your website?
Would you like to have access to your bookkeeping and accounting software for small businesses via the internet
The answers to the above questions will determine which accounting software / bookkeeping software you choose for small businesses. If you only have one company, you will need something simple to use that can be accessed from anywhere. It can also grow with you company. Right? … Right!
Okay, let’s talk about one more thing. Technology under the hood. It is important to understand the technology used in your small business software, even though it might not be obvious. It is the foundation of the software. Although things may become a bit more complicated, I will do my best to keep them as simple and straightforward as possible.
Accounting software for small businesses does one thing. It stores data. Data refers to information about your company. Data can include customer names, addresses and products as well as orders, invoices, and order numbers. Small business software should be able efficiently store data in order to function efficiently. It should be able to retrieve and modify data quickly when needed. What good is a black box program that can’t provide the data you need? Are you still with me? Good.
There are two options for storing data.
- Flat file
- Relational
Flat file method stores data in flat text files similar to notepad files. It is outdated and archaic.
It cannot maintain relationships between data entities. e.g. You want to store customer names and invoices. One customer can have multiple invoices. To store invoices from customers, you’ll need to remember their names each time you store one. As shown below.
customer1 — invoice1
customer1 — invoice2
This approach has the drawback that you will need to remember your customer name each time you store an invoice. This is inefficient.
The relational method stores data using relationships. It is faster. Take a look at the same example using relational method. It only uses the customer name once.
customer1
— invoice1
— invoice2
It’s elegant, isn’t it? You bet. It’s cleaner, easier to understand and more efficient. We are nearly done if you still haven’t stopped me. This song and dance were intended to demonstrate that relational storage is better than flat file storage. This should be a key consideration when purchasing small business software. There are five main small business accounting/bookkeeping software.
Quickbooks from Intuit, Simply Accounting, Peachtree, Sage, and Microsoft Small Business Accounting Software. Agreed?
This is the real deal. These small business software do not use relational storage! Can you see? There’s more. These are proprietary software created by large companies that use ERP (Enterprise Resource Planning), software that runs on unix and uses relational databases (relational storage) to manage their businesses. You got what I said. Let me repeat. These so-called best small business software companies do not use their own software. They sell non-relational storage software under the name of small business software. Why? The cost of relation storage is high. But not anymore!
Many new software products for small businesses now use the relational approach. These software are open-source relational databases that can be accessed from any location via the Internet. They also use GAAP (Generally Accepted accounting Principles). This new software is called small business ERP software. These new software are a knockoff of the archaic and outdated small business accounting/bookkeeping software. Next, you might ask “Can you give me a name?” Yes. You can try IT for starters. It’s elegantly written with mysql relational databases and apache web servers.
