Free accounting software for small businesses sounds like a great deal but would some growing companies be better off using the paid for alternatives? Figuring out which is right for you is an important part of streamlining your business, saving time and, ultimately, saving money.
Free software is one of the latest trends in the accounting and small business software industry. A number of companies offer free to use software with the idea that they will benefit somewhere down the road. For some small businesses, sticking with this limited free version is more than enough, but growing businesses often find that as they get bigger and more complicated, they need a more comprehensive package. Sticking with the free software works for some, others can upgrade as they go, but might it just be easier to get on board with a paid plan from the outset?
Capability
Most free accounting software is capable of handling the four main accounting needs of any small business: namely account management, expenses tracking, invoicing and sales. These are the main tasks that small businesses need to log and track at all times. They are also the bare minimum offered by the free accounting software, so if all you need to do is that, then you might be better off on the free versions. But as those needs get more complex, you need to reevaluate what you are looking for from accounting software.
For example, if you need things like billing for time, inventory and payroll, then the free versions just don’t have enough to meet your needs and it may be time to invest. The same is true if you have complex sales data to process. While the free versions have some sales capability, for growing businesses that is not always enough.
Flexibility
One of the main reasons that businesses opt for the paid software rather than sticking with the free versions is that the more comprehensive software can be customised to fit the exact needs of the business. The smaller free versions come with stricter capabilities which can seldom be altered to meet your needs, which means you might end up working around the software, rather than the other way around.
Many of the paid software options allow you to integrate with customer relationship management tools (CRMs). Others can be used to extract data from the ecommerce side of the business. There are also add ons available for all sorts of tasks and business needs.
Growing businesses need software that can be flexible enough to meet changes in requirements. Add ons can give your business the freedom to maximise the use of the software and make it relevant to your needs.
Security
One of the major differences between the free and paid for software is the level of security offered. If you’re not paying a penny to use them, you probably can’t expect a huge amount of security. That’s not to say they are unsafe, but they certainly won’t come with the security features you might get with the paid versions.
Many of the free versions are hosted in the cloud, which is ideal for smaller businesses without the computer power to effectively host large programmes. However, it is often the case that larger businesses like to host on the premises, which means they have more control over who accesses private information. This is especially true for sensitive accounting information and customer details.
However, there is nothing to say that cloud-based services are any less safe. QuickBooks stores all data behind a firewall with everything being encrypted. It is all transmitted over SSLL technology and there can even be limits regarding which members of the company have access to the information.
Customers
If you’re a freelancer or small start-up then you naturally have more time to deal with customers and clients. However, the larger your business gets, the more data you have to handle and the less time you have to devote to each individual client. That’s when organisation becomes even more important. It’s also when you need accounting software with a high level of support.
If something is not working correctly or you are unsure about a process, you can’t afford to keep tens, hundreds or even thousands of customers waiting. With the paid for software, you get comprehensive support options that help you stay on top of the larger amounts of information you are processing, and give you better access to it as and when you need it.
Time
The paid for software comes with more automated features, such as digital extraction of information from invoices, automated billing and customer thank you letters. You can also integrate with your online shop to control stock levels, reorder goods and send out bills. All of which can save you huge amounts of time and energy. The free versions are suited to businesses with smaller admin needs but can’t cope with the higher volume.
Money
Obviously, the free versions are impossible to compete with in terms of price, but what is really important here is value. Stick with the free version and as you grow you’ll find yourself spending more time doing much of the process yourself. The paid for versions, which often come with a choice of plans more suited to certain types and sizes of business, are often better value in terms of the time and energy they can save the business. This is especially true in the long run.
With additional features such as billing, payroll and inventory, this kind of software could save your business a small fortune in wages, desk space, insurance and missed orders.
Getting something for free is great. But for businesses with real ambition to grow quickly, it might be a better option to start with a more comprehensive package and work from there. Do your research, work out what it is you want and need from your software, then make your decision based on this, rather than getting too carried away with the idea that it could be free.
