18 Feb, 2024
Discover the different types of accounting software available and find the best fit for your financial needs. From basic to industry-specific, every business has a type of accounting software.
Monitoring the financial heartbeat of any business is vital for growth and success. For scaling companies, more than spreadsheets and gut-instinct decision-making is required. Automating accounting workflows with software provides structure, accuracy, and insights for better planning. This guide examines popular accounting software types by business size, features, and deployment models and offers an analytical framework for selecting the right platform.
The accounting needs of large conglomerates differ from those of small startups. Segmenting target users by size/complexity helps entrepreneurs zero in on systems matching their requirements and budgets.
Focusing on solopreneurs and microbusinesses, entry-level software delivers straightforward functionalities like invoicing, basic reporting, and cash flow views. Systems like Jaz provide affordable options starting at $30 a month. For freelancers and contractors making under $100k in annual revenue, these appropriately light options reduce manual paperwork so you can focus on selling. But limited capabilities mean upgrading as operational complexity grows.
Best For: Freelancers, contractors, solopreneurs, and startups doing under $100k annually.
Sample Capabilities: Invoicing, estimates, bank integration, mobile access, basic reporting.
For growing small companies making upwards of $100k yearly, tools like Jaz provide a complete accounting for inventory management, payroll, custom reports, and more. The optimal balance between utility and simplicity allows for efficiently handling operational accounting needs up to about $5M in annual revenue.
Best For: Startups and SMBs with 2-50 employees doing under $5M annually
Sample Capabilities: Invoicing, inventory management, budgeting, purchase orders, bank reconciliation, payroll.
Once small businesses transition into mid-sized enterprises managing multi-entity locations across regions, operational needs demand customization, automation, and deeper analytics from accounting platforms. With revenue allocation, global consolidations, and complex reporting handled in customizable dashboards, data-driven insights guide management strategy.
Best For: Mid-sized businesses with 100-1000 employees doing $10M - $500M in revenue
Sample Capabilities: Advanced custom reports, revenue recognition allocation, multi-entity consolidations, fixed asset depreciation.
Large multinational conglomerates running complex operations require specialized accounting tools. Handling millions of transactions across subsidiaries while delivering financial insights demands elevated sophistication. With needs from automated supply chain processes and inventory valuation algorithms to global regulatory compliance, predictive planning, and blockchain support - these heavyweight champions have it all. However, overkill capabilities can complicate operations unnecessarily for all but the largest or most regulated corporations.
Best For: Large enterprises with 5000+ employees doing over $1B annually
Sample Capabilities: Global consolidations, advanced manufacturing, financial modeling, predictive planning, blockchain ledger, supply chain automation.
Accounting needs also vary significantly across business niches-
For Nonprofits: Specialized to satisfy nonprofit accounting standards like FASB with fund-based reporting principles.
For Software Companies: Handles intricate revenue recognition allocation principles.
For Retail: Advanced inventory and Point-of-Sale integrations
For Manufacturing: Costing visibility for warehousing and shop floors
For Professional Services: Sophisticated time and expense tracking
Choosing industry-specific tools aligns your workflows with both operational accounting and niche reporting. Ask vendors to demonstrate capabilities customized for your sector during platform evaluations.
Location-agnostic availability is a key virtue of modern platforms. Comparing cloud versus on-premise systems on five core aspects clarifies the better fit.
Parameter Cloud/SaaS On-Premise
Accessibility Anywhere via browser Office network only
Initial Cost Low. Subscription model High for licensing
IT Needs Vendor managed Internal IT responsibilities
Customization Medium Very high
Famous with Smaller firms, mostly Large regulated enterprises
Cloud accounting systems win hands down on convenience. Entry-level solutions from Jaz cost just a few dollars monthly to get started.
Even mid-size platforms like NetSuite and Intacct run on cloud infrastructure yet support customization, compliance standards, automated reporting, and advanced analytics functionalities required by sophisticated industries. For most entrepreneurs, cloud accounting software is the fastest and most convenient route to modernizing finance management minus upfront investments.
On-premise installations still have niche advantages for highly regulated sectors within banking, pharma, and government agencies that manage ultra-sensitive data, like customer social security numbers, requiring air-tight security. Cloud systems are adequate, affordable, and the norm for the generalized accounting needs of small and mid-size players.
Without financial visibility, companies operate blindly. But manual bookkeeping using old-school ledgers and spreadsheets has endless pitfalls:
Integrated accounting software eliminates these problems through automation. Beyond recording transactions, advanced analytics, and drill-down reporting unlock powerful perspectives to shape strategic decisions. Modern systems seamlessly handle invoicing, expense claims, payroll, tax filings, and more in one unified platform accessible via the cloud.
Understanding essential capabilities matching business needs is step one towards buying reasonably priced accounting tools to optimize workflows.
Accounting software has extensive options, from basic expense trackers to performance dashboards leveraging AI. Most provide these foundation capabilities, beyond which more advanced or industry-specific features can be added:
Advanced systems have premium features like revenue cycle automation, global consolidations, predictive planning using AI/ML, and much more.
With clarity on software types, features, target company sizes, industry requirements, and deployment models - entrepreneurs must still carefully evaluate multiple vendor offerings to identify products closely aligned with organizational growth plans and IT capabilities.
Here are crucial aspects to assess during test drives of shortlisted accounting solutions:
Most vendors promise seamless upgrades. Verify documented scale ceilings before deciding.
Can authorized remote employees readily access software functionalities easily?
How easily does software facilitate workflows between finance, inventory, fulfillment, etc?
Evaluate how easily dashboards, workflows, and reports can be tailored for business needs.
The faster the rollout, the quicker the ROI. Compare deployment timelines.
Evaluate the availability of customer support for implementation queries.
Complexity demands greater employee training time and costs.
Review tool compatibility for automating multi-platform workflows.
Verify how easily insightful reports and financial ratios can be generated.
Rigorously validate vendor security policies, controls, and compliance guarantees.
These parameters provide comprehensive visibility before committing business-critical financial data into any accounting system for long-term usage.
Automating accounting, reporting, and analytics unlocks substantial productivity gains and informed decision-making capacity for companies. Carefully choosing the right platform aligned with organizational growth plans saves money and headaches down the road. Leverage the software selection best practices outlined here to make the healthiest long-term technology decision, driving operational efficiency and strategic insights for your growing business.
Jaz is the all-in-one accounting solution and one of the best accounting software built to simplify and automate your most complex accounting tasks like invoices, bills, bank reconciliations, payments, and more so you can get back to growing your business or serving more clients.
Get Started for free and take control of your financial operations with Jaz.
When choosing accounting software, consider the size and specific needs of your business, the accounting capabilities required, and whether you need additional features such as payroll software or invoicing software.
Commercial accounting software is designed to streamline and automate the accounting process for businesses, providing features for financial statements, billing, invoicing, and managing the financial health of the business.
Custom accounting software allows businesses to tailor the software to their specific accounting needs, ensuring that it aligns with their unique processes and requirements.
Accounting software allows you to monitor and manage various accounting functions, track financial transactions, generate reports, and gain insights into the financial status of your business.
Accounting software may integrate with various management software such as inventory management software, CRM software, and billing and invoicing systems to streamline business processes.
