NetSuite is a business management software suite offered as a service that performs enterprise resource planning (ERP) and customer relationship management (CRM) functions. It is a horizontal package designed for an extensive range... Read more
Sage Intacct is a provider of cloud-based accounting software. Sage Intacct’s applications are suitable for small and midsize companies and can provide real-time financial and operational insights as well as the ability to automate... Read more
Cougar Mountain Software’s Denali Business is an accounting solution with the ability to customize 10 integrated modules. It is for small to midsize businesses and can be deployed on premises or in the cloud. Key features include... Read more
For organizations seeking a solution that conforms to their existing operations, Multiview offers a suite of financial solutions. With Multiview, companies gain visibility over corporate data. The solution includes 14 modules that... Read more
Deskera ERP is a cloud-based enterprise business management suite that automates sales, billing, fulfillment, distribution (including pick, pack and ship process), sales commission calculations, purchasing, payment processing, product... Read more
Acumatica is a cloud-based enterprise resource planning (ERP) solution that offers a platform designed for midsize customers with a complete, real-time view across the business. The Acumatica suite of integrated business management... Read more
AccuFund is an online accounting and financial reporting solution designed specifically for the nonprofit industry. Integrated into one, AccuFund's Accounting suite helps nonprofit organizations and government agencies report funding... Read more
ScaleFactor is a cloud-based business accounting solution suitable for small and midsize companies. It helps businesses to automate complex accounting workflows and translate financial information into actionable insights. Key features... Read more
Financial Edge NXT is a cloud accounting solution from Blackbaud that provides transparency across teams, security, compliance, and reduces the need for manual processes. The system is a fund accounting solution that provides a general... Read more
Abila MIP Fund Accounting from ProSoft Solutions is a finance management and fund accounting solution designed to serve nonprofits and government agencies. The solution can be deployed on-premise, in the cloud or be self-hosted. Abila... Read more
Flexi is an on-premise as well as a cloud-based accounting solution for the banking, insurance, healthcare and service industries. The Flexi accounting solution features automation of accounting process and completion of audit trails... Read more
Sage Fixed Assets is a hybrid asset management solution that helps businesses track and manage the fixed assets through different steps of asset lifecycle. The solution offers integrated accounting features and multiple methods to... Read more
Workday is a cloud-based enterprise resource management (ERP) suite suitable for global businesses of all sizes in a variety of industry verticals. Workday delivers user and administrative tools across financials, HR, planning, talent,... Read more
Sage Business Cloud Enterprise Management, formerly known as Sage X3, is an ERP software suite that includes integrated functionality for financial management, sales, customer service, distribution, inventory, and manufacturing, and... Read more
Connected is a hybrid integrated accounting and enterprise resource planning (ERP) that caters to small and midsize businesses across various industry verticals and helps them to integrate their data and processes across departments... Read more
nQativ’s Activity HD is an accounting and payroll solution suitable for small to mid-size companies. It offers tools to sort, filter and present data, plus security features to satisfy data confidentiality requirements. Activity... Read more
EBizCharge offers a suite of payment processing, billing and invoicing solutions. It includes payment integrations to accounting, enterprise resource planning, customer relationship management, e-commerce platforms, mobile solutions... Read more
Sparkrock is an all-in-one solution for large and midsize Nonprofit organizations. It offers Finance & Accounting, Workforce Management, Payroll, Employee Scheduling, Case Management and Donor Management. Each module can be purchased... Read more
Xledger is a cloud-based enterprise resource planning (ERP) solution that caters to midsize and large businesses that helps them to manage day-to-day operations by automating routines ranging from bank reconciliation to invoice entry.... Read more
Restaurant365 is a cloud-based accounting solution for restaurants of all sizes. Key features include accounting, inventory, banking, budgeting and analytics. Restaurant365 offers general ledger features such as retail fiscal periods,... Read more
With online, or Web-based accounting software, an organization’s financial data is hosted by the vendor. In this software-as-a-service (SaaS) module, data is stored on secure servers with automatic back-up and redundancy capabilities. In recent years, these programs have become highly customizable: businesses only pay for the services that they consume. This flexibility, along with the lack of capital investment requirements, attracts small and medium-sized businesses especially.
Because of the hundreds of online accounting programs, it can be very difficult to decide which one is best for your business. This buyer’s guide is designed to help you navigate the online business accounting software market. Here’s what we’ll cover:
Accounting solutions track the financial transactions within an organization. Typical features include:
Specialty systems often have additional features dedicated to a particular market. These include fund accounting for nonprofits, commission calculations for sales-oriented businesses like real estate, rate analysis for banking or claims scrubbing for medical practices.
Online accounting systems are specifically designed to be used through the Internet, rather than being installed locally onto company computers. This reduces information technology requirements like server hardware, backups and maintenance and shifts the expenditure from being a large up-front capital cost to a much smaller, but ongoing, monthly or annual fee.
AR invoice screenshot in AccuFund
There are two types of accounting software online: browser-based, SaaS and application service providers (ASPs). SaaS solutions are designed for the user to access the information through an Internet browser like Internet Explorer, Firefox, Chrome or Safari. This allows the information to be accessed from anywhere, and it always looks exactly the same. An ASP is a client-server system, where the business installs a small software “client” onto their computers. In both models—SaaS and ASP—all of the data is hosted by the vendor on a remote server. Most ASPs are also “Web-enabled,” meaning that a Web-browser can be used if necessary, though it will come with a few disadvantages since it is not designed for that purpose.
Online financial software falls into three main categories:
Enterprise resource planning (ERP) solutions. This describes an integrated suite of features that includes manufacturing, sales, customer relationship management, project management, supply chain management etc. Buyers will want an ERP if they’re looking for a full-suite comprehensive solution, of which accounting is just a small part.
Basic systems. Basic programs online that aren’t part of an ERP tend to be much more cost effective to purchase outright and install locally, and there aren’t very many Web-based systems that focus in this market. But there are a handful available, if this is the deployment model you prefer and all you need is basic functionality. There are also a number of online vendors that will let you select only the features you wish to use.
Fund accounting solutions. There are several products out there designed specifically for the nonprofit market, which include industry-specific features like fund accounting, requisitions and grant and donation management.
A Web-based system has a number of significant advantages over traditional on-premise software platforms:
Greater level of interactivity. Online bookkeeping software extends system capabilities with functions such as online payments and employee portals. An online accounting system can support a user interface for business employees and customers for communication and sales. Online payments save time by integrating with accounts payable/receivable and the general ledger to automatically update a company’s books. Online employee portals can increase the flexibility of communication and collaboration.
Limited IT burden. Browser-based access for Web accounting software avoids potential compatibility problems, which can sometimes happen when installing these kinds of programs locally to your system. In addition, the vendor handles all of the routine back-ups, upgrades and maintenance, saving considerable time and money on IT infrastructure, a particular benefit for smaller businesses.
Lower up-front costs. Rather than paying a large installation fee, Web-based systems come on more of a subscription basis. In the SaaS model, the user pays a monthly or annual fee, making it a low but ongoing operational expense rather than a capital one.
Data security. Web-based software vendors have stringent security requirements to ensure that your data is secure from hackers and protected from loss. Therefore, an on-premise crash, theft or other hazard to the company’s computers will not destroy the business accounting data. Many online solutions also allow businesses download their data locally, if that’s preferred.
Although Web-based solutions don’t require the same investment in hardware as traditional software installations, subscription costs can accrue over time. The longer it stays in use, the more the user pays, and after a few years the costs may exceed whatever would have been paid for an on-premise system. This is especially true for larger organizations that have the capital and IT infrastructure to make an on-premise system more cost-effective.
Another issue to consider whenever purchasing any new product is to ensure user buy-in. If people feel like they’re having new software “forced” on them, they’re more likely to resist its implementation. Therefore, it’s important to get them excited about the benefits of the new program. A great way to do this is to involve them in the selection process, either inviting them to the demos directly or, if there are too many users for that to be practical, at the very least surveying employees for their opinions on the features they’d want in a new program.
Customization. A growing trend in the SaaS accounting market is the ability to select the features your organization needs or wants. If all you need is core accounting, that’s all you pay for, and if you want forecasting but not grant management, the software won’t include it.
Electronic payments. The ability to pay invoices and collect receipts electronically is a great way to save time and money. The benefits are strong enough that most solutions are developing electronic payment features to allow their customers to take full advantage of those capabilities.
SaaS for larger businesses. In the past, Web-based systems were being marketed exclusively as online small business accounting software for companies that couldn’t afford the up-front costs associated with an on-premise system. Today, however—although many small business systems still offer SaaS models—more and more vendors are targeting larger companies with SaaS solutions offering extremely high-level functionality, as in the ERP realm, offering the best of both worlds.
These are the best online accounting software solutions and vendors to consider, categories by program type:
|These types of buyers...||Should evaluate these systems...|
|Enterprise resource planning (ERP) solutions||NetSuite, Epicor, Microsoft Dynamics GP, SAP, Royal 4|
|Basic programs||HIntacct, Accumatica, Lawson S3|
|Fund solutions||FastFund, Serenic, Accufund, Sage MIP Fund|