Accounting Software for Consultants Buyers Guide
This detailed guide will help you find and buy the right accounting software for consultants for you and your business.
Last Updated on November 08, 2023With so many options to choose from, finding the right accounting software is a daunting process—especially for consultants, who often operate independently and without the budget of larger, enterprise-level businesses.
But that same degree of autonomy is exactly why it's important to find the correct accounting software to meet the unique needs of your business. Without the right accounting software, consultants won't have the breadth of financial insight, integration and automation necessary to thrive in today's economy. We created this Buyer's Guide to help them find the perfect fit.
Here's what we'll cover:
What is accounting software for consultants?
What are the common features of accounting software for consultants?
What are the benefits and potential issues of accounting software for consultants?
What are the market trends for accounting software for consultant?
What is accounting software for consultants?
Accounting software helps freelance and independent consultants manage small-scale financial accounting data. A core package generally includes the following modules:
Accounts payable
Accounts receivable
General ledger
Billing and invoicing
The dashboard will have some variation of those modules alongside other supplemental features. For example, Sage Intacct's dashboard contains General Ledger, Accounts Payable, Accounts Receivable and Order Entry, among other modules.
Sage Intacct dashboard
Furthermore, there are certain criteria that differentiate accounting software for consultants from accounting software for other types of businesses. These can include features such as cloud-based applications and customer relationship management (CRM) capabilities.
What are the common features of accounting software for consultants?
While different vendors offer different sets of features unique to their application, there are several core elements of accounting software consultants can expect to find:
Accounts payable | Enables you to keep track of what you owe and also pay all your bills on time. The feature helps you process your outgoing funds, track invoices, store vendor details and print checks. |
Accounts receivable | Helps you effectively manage your incoming payments. The feature offers billing codes for easy handling of recurring outgoing invoices to customers and payment codes for efficient crediting of payments from multiple accounts at one time. |
General ledger | Allows users to maintain a comprehensive record of all financial transactions and track spending by project. The feature simplifies budgeting and reporting by showing past and future transactions from specific accounts within a specified date range. |
Billing and invoicing | Gives users the ability to track transactional financial data and create billing and invoicing documentation for clients. |
Customer relationship management (CRM) | CRM applications help consultants manage interactions with current and prospective customers, clients and/or partners, with the goal of increasing customers, revenue and customer satisfaction. |
Financial reporting | Enables you to track and report on your financials with recognized business accounting best practices. |
Online accounting | Allows users to access and modify all accounting data remotely through a cloud-based server hosted by the vendor. |
Project accounting | Helps project-oriented consultants maximize job profitability and efficiency by tracking detailed cost breakdowns of individual projects. It allows consultants to examine prior job costs and estimate future costs to choose the jobs based on projected profit. |
Asset management | Offers a central asset and inventory management system for managing equipment from acquisition to depreciation to maintenance. |
What type of buyer are you?
It's important to consider what type of buyer you are before examining your options so that you know exactly what to look for in a product. Most consultants seeking accounting software fall into one of three categories:
Freelance consultant. Independent consultants are responsible for managing their own financial accounting data, without the infrastructure or budget of a business with multiple employees. These types of buyers aren't usually experts in accounting, and therefore require only basic accounting functions while prioritizing ease of use and cost over more feature-rich platforms.
Consulting firm. Ranging from a small handful of employees to a midsize network of individual consultants, these businesses often desire more robust systems. These systems should be capable of managing multiple users and projects, as well as the ability to integrate with existing systems like CRM or asset management software. They therefore require a product with a greater degree of sophistication and wider range of applications, such as CRM software, to fulfill their business needs.
Best-of-breed buyer. These buyers have more familiarity with accounting software and its specific functions. They know the individual applications they desire and how they will address their consulting and accounting initiatives. For example, an HR consultant would seek payroll management capabilities, while nonprofit and cause-driven consultants would look specifically for accounting software to help manage funds and a variety of financial benchmarks. Best-of-breed buyers like these typically prioritize functionality over integration.
What are the benefits and potential issues of accounting software for consultants?
When you boil it down, the benefits of accounting software for consultants are the same as any other business: a clearer and more comprehensive analysis of one's accounting data, which in turn leads to more responsible financial decisions and a better understanding of the proverbial Big Picture. Advancements in automation and integration have made accounting software an essential piece of the business pie, rendering older, manual accounting methods extinct.
That said, there are certain things you'll want to consider before implementing accounting software into your consulting business. For independent and freelance consultants, protecting existing data and ensuring a seamless transition is paramount. This is especially tricky when integrating with other software, so be sure to back up all client data prior to implementation.
It's also important to ensure that a given piece of software includes all desired functionality and is sufficient for your organization's projected growth rate. The last thing you want is to invest in new software only to realize it doesn't have a specific feature, or that your consulting business will outgrow the software's capabilities as it acquires more clients. Thankfully, most accounting software platforms offer trials and demos that will allow you to test drive it before you buy it.
What are the market trends for accounting software for consultants?
Consultants will want to keep an eye on these notable trends playing out in the accounting software space:
Cloud-based software. Accounting software platforms—and really software as a whole—are moving toward the Software-as-a-Service (SaaS) model. Compared to the more traditional on-premise hosting model, SaaS offers lower upfront costs and quicker implementation time. Both of these factors make cloud-based software ideal for consultants with smaller budgets and less margin for downtime.
Mobile apps. Similarly, mobile applications and smartphone-optimized web interfaces are gaining popularity not just in accounting, but across all industries. This trend is particularly relevant to consultants, who are often on-the-go and managing multiple accounts at once. For a detailed look, check out our breakdown of the best mobile accounting apps.
Industry-specific features. More and more, vendors are offering industry-specific features that cater to the unique needs of a given vertical. Be sure to keep this in mind when investigating solutions for your consulting business, as even products that were once broader and more horizontal continue to add features that benefit specific industries.
Vendor consolidation. When evaluating accounting software for consultants, buyers should consider the financial viability of small vendors, which larger merchants are acquiring at an ever-increasing rate. This is especially true of accounting and ERP markets, with major players like Oracle and Sage making significant acquisitions in recent years.