The Best Online Accounting Software: Top Systems for 2020

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Browsing for the best accounting software that matches your accounting preferences is similar to walking into a bakery and looking for the perfect donut. There are so many varieties and flavors to choose from that you get overwhelmed. We can relate to that. Nevertheless, have you ever considered investing in an online accounting system? You can thank your lucky stars because our handy-dandy research team has dedicated time to searching for and finding the best online accounting software to compile a list of the top choices for small and mid-size business for the coming year.

Let’s converse about the characteristics of online accounting software as well as its essential benefits, features and trends to monitor.

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Best Online Accounting Software

What is Online Software?

An online software, or sometimes referred to as web-based software, is a program that runs entirely on the internet with the choice of hosting it on your hard drive or on a vendor’s hard drive. Sometimes online software is easily mistaken for cloud-based software. Here are some key differentiators to look over to diminish confusion:

  • Hosting: Online software can host on your hard drive or on a vendor’s server, whereas cloud-based software exclusively sits on a vendor’s server.
  • Modifiable: Web-based software permits you to adjust or add additional features to it whereas cloud software typically has little wiggle room for modifications.
  • Payment Methods: Online software usually has a one-time payment plan for an established amount of time while cloud software implements pay-per-use or monthly subscription structures.

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Benefits

Owning online accounting software comes with plenty of perks to assist you in streamlining your accounting practices. These benefits include:

  • Globalization: If you have a vast amount of patrons and partners around the globe, exemplar software should contain accessories for management such as global currencies, tax compliances, multiple modes of payment and more.
  • Third-Party Integrations: Third-party integrations permit you to link your existing software such as CRM, payroll management, time tracking and more with an online accounting system to optimize your number-crunching procedures.
  • No More Paper: Solutions permits you to store and arrange every crucial file and document in your records digitally instead of storing sheets in a cluttered filing cabinet.
  • Real-Time Snapshots: Receive real-time information about your accounts and bookkeeping data with the proper online accounting solution.

Common Features

Although most online accounting systems are unique in their own right, they do share a common thread of features. Understand that even though an accessory is labeled common or popular, it does not mean it’s necessarily a good match for your business. The most common features of online accounting software are:

  • Bill Management: Supervise all of your bills and payment deadlines in one centralized hub with the proper bill management apparatus.
  • Invoice Management: Know exactly when an invoice is sent to a patron as well as when it’s paid and initiate automatic late payment notifications thanks to an exemplar invoice management appliance.
  • Reporting: Maintain valuable reports such as profit and loss, cash flow statements, balance sheets and more with a paradigm reporting module.

Want more accounting features and requirements to make a more complete wishlist? Check out our thorough features article and elaborate requirements template.

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Trends

There are some accounting trends – such as automation and social media integrations — to consider as you browse for an online accounting program. These trends include:

  • Artificial Intelligence (AI): According to a recent study, 66% of accountants would make an investment in AI for their firm. AI can streamline recurring accounting processes such as data ciphering and data input amongst other tasks so accountants can devote more time to tasks that require critical thinking.
  • Machine Learning: Machine learning leverages sophisticated algorithms that study information and “learn” it over a period of time. Streamlining bank reconciliations, browsing audit information and interpreting payments on invoices are just some of what machine learning can do in accounting.
  • Social Media Integration: Accounting firms are beginning to utilize social media for branding and sales as a means to boost their presence. Social media implementation is also enabling accounting firms to showcase their expertise and offer more opportunities for patrons to review how they execute their accounting operations.

Best Online Accounting Software

After reviewing the key characteristics of online solutions as well as their benefits, features and trends, it’s time to dive into our top picks of the best online accounting software that cater to small and medium-sized businesses. Make sure you have a wishlist of your most-desired features and qualities (use our requirements template to help you through this process).

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QuickBooks Online

QuickBooks Online is an online accounting system that caters to small and mid-sized organizations. The industries it serves include professional services, manufacturing, wholesale, contractors, retail, non-profit and more.

QuickBooks Online Dashboard

An example of QuickBooks Online’s dashboard.

Bills Payment Management

The bills payment management appliance allows you to track bills and their payment deadlines to ensure on-time payments as well as initiate recurring bills and partial bill payments. It’s feasible for you to implement automatic scheduling for recurring purchase orders and converts them into bills when orders are finished. You may also activate bill payment using applications like Bill.com, Entryless, Veem and PayPal amongst others.

Invoice Management

Generate invoices and accept credit card, debit card or ACH bank transfer payment methods online with the invoice management attribute. This tool comes with preset invoice templates that you may personalize with your company logo and colors. This appliance also promptly tracks invoice statuses, allocates payment reminders and matches payments to invoices.

Dashboard and Reporting

QuickBooks Online has a modifiable dashboard that gauges performance against time periods, budgets and other variables. The reporting trait offers a plethora of reports including income statements, balance sheets, profit and loss and cash flow statements amongst others. This feature comes with a spending roadmap to trace current trends and distribute financial information to investors.

Other Noteworthy Idiosyncrasies

Although QuickBooks Online has all the common traits, there are additional modules worth mentioning that can streamline your accounting needs. These appliances include:

  • Inventory Management: Stay in the loop of the products already in your inventory in addition to products on order with this element.
  • Expense Tracking: Connect your credit cards, bank, PayPal and Square accounts to instantly import transactions thanks to this idiosyncrasy.
  • Sales Tax Management: Automatically cipher taxes for invoices in accordance with date, location, type of product or service and customer with this feature.
  • Estimation Management: Swiftly convert accepted estimates into invoices with this tool.
  • Third-Party Integrations: Merge plenty of third-party business applications like time tracking, inventory management, cloud accounting, e-commerce and payment processors with QuickBooks Online.
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Company Size Suitability: S M L

Wave Accounting

Wave Accounting is an online accounting system that has separate apps for accounting, payroll, receipts, invoicing and payments. It’s intended for small business owners, entrepreneurs, freelancers, consultants, accountants and tax preparers for any type of industry.

Wave Invoicing Management Module

A preview of Wave’s invoicing management module.

Invoice Management

Wave Invoicing enables you to develop invoices with drag-and-drop line items to arrange content as well as customize invoices with your preferred logo and colors. This module accepts credit cards and bank payments and sends invoices through Gmail, Wave, Outlook and more. You may send automatic payment reminders to clients in addition to tracking payments, partial payments and overdue invoices.

Bills Management

Draft a bill once and instantly duplicate it via Wave Invoicing’s bills management tool. You are able to add vendors, currencies, purchase orders or sales orders, due dates and bill numbers to a bill as well as alternate between automatic and manual billing for recurring payments.

Reporting

Thanks to Wave Accounting’s reporting trait, you may generate reports that showcase month-to-month or year-to-year collations. The accrual-basis reporting extension offers reports that display all of your accounts payable and accounts receivable transactions. The cash-basis reporting extension offers all credit card transactions including short-term and long-term assets and short-term and long-term liabilities.

Other Noteworthy Idiosyncrasies

Since Wave has all of the common modules, there are some supplementary appliances that can also maximize productivity to keep your company afloat. These accessories include:

  • Double-Entry Accounting: Produce and manage infinite bank and credit card connections as well as an unlimited amount of income and expense tracking with this feature via Wave Accounting.
  • Receipt Management: Take pictures of receipts and upload them while you’re on the move with this accessory on Wave Receipts.
  • Account Reconciliation: Ensure the bank balance matches the balance found in Wave Accounting with this element.
  • Payments Handling: Through Wave Payments, you may accept credit card payments online, in-person or over the phone.
Price: $$$$$
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Company Size Suitability: S M L

Sage Intacct

Sage Intacct is an online accounting system dedicated to small and mid-sized companies in the accounting, construction and real estate, non-profit and distribution industries among others.

Sage Intacct Dashboard and Reporting Tool

An example of Sage Intacct’s dashboard and reporting tool.

Dashboard and Reporting

Choose from more than 150 pre-made financial reports, custom reports, dashboards and visualizations with the dashboard and reporting module. You may track and report financial and operational intel including square footage, available resources and more. The dashboards come with various data visualizations to exhibit vital KPIs such as:

  • Conditional highlighting that permits you to visualize particular metrics that hit above or below determined ranges.
  • Sparklines that sum up historical numbers as mini line graphs for weeks, months, quarters and years.
  • Color scaling that highlights high, low and in-between quantities.
  • Red, green or black-arrow trend indicators that display increasing or diminishing metrics.

Project Costing and Billing

The project costing and billing attribute assists you in tracing expenses by project, unbilled research and development (R&D) costs and billable services projects for patrons. Adjustable dashboards offer instant transparency of budget vs. actuals, billed vs. unbilled expenses and billable hours vs. non-billable hours. This appliance enables you to establish numerous billing rates and price lists by employee, project, type of work or client.

Other Noteworthy Idiosyncrasies

Despite Sage Intacct containing most of the common online accounting features, there are some additional noteworthy attributes to effortlessly handle your accounting practices. These tools include:

  • Accounts Payable Management: Review and track payments, approvals and reports as well as accounts payable liabilities and vendor-aging reports with this component.
  • Accounts Receivable Management: Promptly post order transactions to your general ledger and AR ledger as well as offer sales tax calculations via this apparatus.
  • Cash Management: Import transactions from banks and rapidly reconcile checking, saving and credit card accounts with this appliance.
  • General Ledger: Work with multiple currencies and entities due to this tool.
  • Budgeting and Planning: Collaborate with your teammates and invite collaborators to revise budgets, present plans, develop several what-if scenarios and dive into details through this module.
Price: $$$$$
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Company Size Suitability: S M L

FreshBooks

FreshBooks is another online accounting ERP suitable for small and mid-sized organizations in the manufacturing, construction and financial services industries among others.

FreshBooks Time Tracking Accessory

A preview of Freshbooks’ time tracking accessory.

Invoice Management

The invoice management module enables you to customize invoices with your company fonts, logos and colors as well as the thank-you emails. Before you send invoices to patrons, you can preview them and even initiate the appliance to automatically create and send invoices, obtain payments and send payment reminders to clients. Lastly, this tool promptly ciphers calculations and applies sales tax to the invoices.

Expense and Receipt Tracking

When you connect your bank accounts or credit cards to FreshBooks, every expense is traced and displayed in the account dashboards or reports in the expense and receipt tracking attribute. You may stamp expenses as billable and instantly add them to customer invoices. This idiosyncrasy enables you to also snap pictures of receipts with your phone and add it to an expense. Each receipt is stored in the cloud.

Reporting

The reporting apparatus comes with several reports such as profit and loss, sales tax summaries, account statements, payments collected, account aging, expense, invoice details, cost of goods sold, recurring revenue and more. The time entry details report offers a detailed synopsis of every time entry you created during a particular period. This report also features your employees’ time entries as well as customizable functions to show notes and ranges of time entries with helpful filters.

Other Noteworthy Idiosyncrasies

Although FreshBooks has every typical feature, there are some extra modules worth mentioning that can handle your accounting needs. These appliances are:

  • Double-Entry Accounting: Guarantee debit and credit card amounts are equal thanks to this accessory’s automatic checks and balances extension.
  • Estimation and Proposal Tracking: Draft adjustable proposals to delineate a project’s extent, timeframe and deliverables with this appliance.
  • Time-Tracking: Automatically bill clients for tracked hours with this appliance.
  • Payments Management: Extend flexibility to your clients with payment schedules and partial payments with this attribute.
Price: $$$$$
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Company Size Suitability: S M L

Dynamics 365 Finance

Dynamics 365 Finance, another branch from Microsoft’s Dynamics tree, is an online and on-premise system that serves businesses of all sizes. Its leading industries include automotive, education, financial services, government, health, media and communications, manufacturing and more.

Dynamics 365 Finance CRM Module

An example of Dynamics 365 Finance’s CRM module.

Analysis and Reporting

Establish as many report configurations as necessary to meet the requested data composition or layout with the analysis and reporting accessory. A report configuration contains six segments: namely general, data filtering, calculation records assignments, fiscal periods per column, cost showcasing columns, and budgeted cost columns. The cost accounting analysis through Power BI has valuable key metrics including cost, magnitude and cost rate by actual cost, budget cost and flexible budget cost.

Expense Management

The expense management appliance permits you to set expense policies and automate travel expense reimbursements for employees when they input and submit expense reports and travel requisitions. This module amalgamates with financial management and relies on decisions made by your company’s finances including per diems, journals and accounts, payment methods, expense and shared categories, taxes and expense report policies. You may also activate expense-related credit card transactions so they are promptly imported on a repetitive schedule.

Other Noteworthy Idiosyncrasies

Despite Dynamics 365 Finance having most of the common features, there are some supplementary capabilities that can facilitate your accounting needs. These features include:

  • Accounts Payable: Define vendor groups, vendors, posting profiles, various payment options and restrictions in accordance with vendors, charges, deliveries and destinations, promissory notes and other kinds of accounts payable information due to this appliance.
  • Accounts Receivable: Establish customer groups, customers, posting profiles, interest notes, collection letters, commission and other frameworks concerning patron fees, shipments and targets, bills of exchange and other genres of accounts receivable intel thanks to this tool.
  • Budget Management: Modify infinite monetary and quantitative situations while establishing a budgeting organizational hierarchy to advocate various budgeting techniques with this apparatus.
  • Cash Flow Forecasting: Work with two cash flow forecasting information workspaces-one holds data from other businesses while the other holds data for a current company-via this function.
  • General Ledger: Govern your organization’s entire financial records including chart of accounts, balances, transactions and more due to this feature.
Price: $$$$$
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Company Size Suitability: S M L

That’s All, Folks!

It’s true that searching for the best online accounting software can feel like searching for a priceless heirloom only Indiana Jones can unearth. But keep in mind that you need an system that meshes well with your requirements. Are you craving more software and features to peruse? Take a look at our comprehensive comparison guide.

Which online accounting system is your first choice and why? Let us know in the comments!

Khaleel HayesThe Best Online Accounting Software: Top Systems for 2020

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