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11 Best Accounting Software for Small Business for 2024 – Trends, New Forecasts & What Lies Beyond?

A new version of this article, featuring the latest data and statistics is available. Check out our report on Accounting Software Trends for 2022/2023.

11 Best Accounting Software for Small Business

  1. Freshbooks is often considered to be the best accounting software designed especially for small businesses. The software streamlines billing workflows, tracking billable hours and creating expense files and professional-looking invoices. All of these can be done in a few clicks, since using the platform doesn’t require accounting experience. The also helps businesses get paid faster through integrations with online payment solutions such as Stripe and PayPal.
  2. NetSuite ERP is a cloud-based platform that offers automated accounting features for medium and large enterprises. These accounting features include accounts payable, accounts, receivable, and general ledger tasks. The platform also comes with useful financial planning features to help companies stay on budget. Accounting teams can also use the platform’s tax management features to ensure that their organizations remain compliant with tax laws.
  3. QuickBooks Online is an intuitive solution, and one of the best accounting software with reliable features for tracking expenses, monitoring sales, and managing invoices. The software also helps users accurately calculate taxes. By gathering all these features into one platform, QuickBooks Online makes accounting and financial management easier. The platform also comes with a handy auto-sync feature that helps ensure everyone on the team uses the same financial data.
  4. Sage Business Cloud Accounting is a cloud-hosted solution and is definitely among the best accounting software that helps users with tracking income and expenses. In addition to income tracking, the software also automates the setup of recurring invoices and bank statement imports. These features help accounting professionals focus their time and effort on more important tasks. The software also comes with a report designer that lets users apply their own formats and layouts.
  5. Tipalti Approve is a procurement software that provides businesses with full visibility over their spending. The application comes with features to help businesses streamline the creation and approval of purchase requests. Presets are also available for different types of requests, so users can quickly create and duplicate requests when needed. For added convenience, the software also automates the creation of purchase orders from purchase requests.
  6. AvidXchange is a comprehensive financial management suite with four core modules: invoice automation, bill payment automation, purchase order automation, and utility bill management. With these modules, businesses can easily transition to paperless invoicing and bills payment. The system is also web-based, so users can view their dashboard from any mobile device or computer with an Internet connection.
  7. A2X is a cloud-based platform that can help users handle financial and transactional data from sales channels like Shopify and Amazon. With this platform, users can do away with manually recording sales and creating financial statements, saving time and effort. Aside from sales, A2X also accurately summarizes expenses and organizes transactions into categories. This makes it easier for users to reconcile payouts and update the company ledger.
  8. Rossum is a platform that can help teams manage and organize incoming documents. The software can easily extract data from documents such as forms, prompting users to validate data with low-confidence scores. Rossum also sends automated notifications to document senders. These features help users save time on handling invoices and sending updates on transaction status and other data issues.
  9. Trolley is a payment automation software that can help streamline accounts payable workflows for businesses. It lets users send mass payments to over 200 countries and areas around the world and validates recipients’ bank accounts and personal information. Aside from streamlining payout processing, Trolley helps businesses remain compliant with tax regulations by providing the right tax forms according to IRS requirements.
  10. DocuPhase is an automated software that can help users streamline and automate AP processes. By organizing documents, DocuPhase can help companies automate the creation of purchase orders, invoice processing and data entry. The platform also automatically extracts and validates information from invoices and processes the information according to pre-established routing workflows. With these streamlined AP processes, professionals can focus on more important tasks.
  11. Zoho Books is an award-winning accounting platform designed for small and medium businesses. The software comes with an intuitive dashboard that visualizes financial performance and helps professionals stay on top of invoicing, payment reminders, and billable hours tracking. The platform also automatically imports bank and credit card transactions and categorizes these transactions according to your company’s preferences.

Technology has many stories to tell. The word itself is synonymous with development and, in much of today’s business landscape, it continues to reshape industries and businesses, even in the trying times brought about by the COVID-19 health crisis. It transforms systems and processes, converting manual tasks into automated functions. With technology, businesses operate more efficiently and effectively. And this is where the latest accounting trends mainly revolve around.

Developments like SaaS saw the industry add cloud-based accounting tools, along with on-premise solutions. Still, more technological disruptions are on the way for the accounting industry. In this article, however, we’ll be presenting you with the top accounting trends that you need to know about.

key accounting trends

Many accounting leaders and accountants are feeling the business impact of automation and high-tech systems (Spade Technology). As a matter of fact, a Sage report reveals that about 90% of accountants feel that accountancy is undergoing a cultural shift that is leaning more toward technological adoption (Sage, 2019).

This cultural shift is driven by several factors. The report attributes it to marketing demands, regulations, generation change, and client demands, as well as investments that businesses make to keep pace with the accounting world. In addition, the changes in work environments brought about by the ongoing pandemic has also contributed to the changes in operational processes. With such a transformation in the industry, more and more accounting leaders and professionals are discovering new strengths in utilizing advanced solutions for accounting processes.

Most services in the accounting industry are vulnerable to disruptions (Accounting Today, 2016). Among the inflationary factors that were of top concern for accounting firms in 2020 were the cost of raw materials (39%) and labor costs (31%) (Statista, 2020). There is a need to reshape organizations given recent developments. These future trends in the accounting profession reflect these developments. Aspiring professionals in the field have to take to heart the emerging accounting trends and techniques to make inroads in the talent market.

In the following sections, we’ll dive into more comprehensive discussions of each accounting trend and technique in the accounting industry.

1. Automated Accounting Processes

Automating more accounting processes is a key trend in the industry. Automation eliminates confusion and minimizes errors, which is why companies are more inclined to invest in automated solutions. Since the process relies heavily on computers, businesses face the risk of falling victims to fraud and compromised security. These led to an increased demand for internal auditors to check for any data inaccuracies. Thus, there is no need for in-house accounting services to worry about getting replaced by bots.

According to an ACCA Study, over 50% of C-level executives in the accounting industry expect the development of automated accounting systems. In the coming years, it will have the highest impact across several industries, allowing accountants to utilize data and optimize processes for both the best accounting software for small businesses and large enterprises. Accounting automation also seeks to guide businesses in arriving at data-driven decisions more quickly than ever before.

automation of accounting jobs

Key takeaways

  • The automation of accounting processes will further increase in the short- and long-term.
  • More than 50% of executives expect automated accounting systems to develop in the coming years.
  • Automation solutions will empower in-house accountants.

2. Rise of Accounting Software Solutions

The adoption of technologically-driven solutions in the accounting industry will intensify in the coming years. As the demand for computerized accounting grows particularly during the pandemic, accounting software companies will address this need with robust solutions. These software platforms possess a range of software functionalities accountants value the most, such as optimizing processes and minimizing manual tasks.

The accounting software market will experience a higher level of growth in the years ahead, according to a report by Fortune Business Insights. All over the world, there is a strong demand for software platforms to manage spreadsheets and have a better understanding of tax management. During the forecast period of 2020 to 2024, the market will grow at a CAGR of 6%, taking into consideration the effect of the pandemic on the industry (Businesswire, 2020). While North America is seen at the forefront of this growth, the adoption of modern technologies in the Asia Pacific will also drive the growth of accounting software companies.

Technology Adoption Among Small and Medium-Sized Accounting Firms

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Source: Sage 2020

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Key takeaways

  • There is a rise in demand for accounting software solutions.
  • North America is leading the accounting software market.
  • The market will grow at a CAGR of 6% during the forecast period 2020 to 2024.

3. Outsourcing Accounting Functions

Businesses are now outsourcing accounting functions and reaping its many benefits. Outsourcing lets companies focus more on their limited resources, increasing profitability. It also saves them employment costs like payroll, taxation, salaries, benefits, and training expenses. Hence, outsourcing accounting functions is becoming a popular strategy among many companies.

This gives rise to the number of outsourced accounting service providers. It is one of the fastest-growing areas in the accounting industry. Every year, businesses experience satisfaction in their outsourced accounting value and results. Outsourcing is now an increasingly important method for CPA firms to deliver efficient services to their clients, as well as analyze business operations and add more value to their business. Accountancy, especially in business processing outsourcing (BPO) companies, is also becoming a highly esteemed career all over the world.

Key takeaways

  • Outsourcing accounting functions is becoming more significant for businesses and CPA firms.
  • The number of benefits outsourcing gives rise to more accounting outsourcing companies.

4. Cloud-Based Accounting

The cloud is becoming a popular place for accounting services. With cloud-based accounting systems, companies and firms are able to have access to their system anytime—something that bodes well for teams that have shifted to a remote work setup since the COVID-19 pandemic began. Data access also includes tracking inventory, sales, and expenses. Moreover, cloud-based solutions allow for the creation of workflows, saving businesses valuable time. Having such benefits is driving businesses to make the shift to cloud-based accounting systems.

As such, about 67% of accountants now believe that cloud technology can make their roles easier (Sage, 2018). This is according to a survey conducted by Sage, which also reveals that 53% of the respondents adopted cloud-based solutions for project management and client communication. This could be related to the rise in the demand for advanced technological solutions from various industries. Among them is the accounting industry, which is taking a major leap for more effective and comprehensive financial reporting and analytics.

Year-over-year revenue growth of accounting firms

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Source: Xero

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Key takeaways

  • Cloud technology is popular among accounting companies.
  • About 67% of accountants think cloud-based solutions make their jobs easier.

5. Focus on Data Analytics

As technology allows specific accounting tasks to become easier, the accounting industry shifts its focus to data analytics. Accountants are taking on new roles as advisors, with unique skill sets that revolve around analyzing data. Analyzing numbers helps businesses come up with valuable insights, which enables them to identify process improvements as well as increase efficiency and manage risks better.

Although analytics as part of accounting services is not entirely new, it is now more powerful, presenting financial performance in a new light for better actionable insights. Larger accounting firms apply data analytics in tax, consulting, risk management, and auditing. Meanwhile, CPAs in other organizations are utilizing the capabilities of the best data analytics solutions to support industry-specific needs.

importance of tech skills in accounting

Key takeaways

  • In the accounting industry, there is a growing focus on data analytics.
  • Accountants are undertaking new roles as financial advisors.
  • Data analytics in accounting lead to process improvements and efficiency in the business.

6. Blockchain

The accounting industry needs to understand blockchain technology more and for good reasons. Blockchain is already changing the accounting sector by lowering the costs of reconciling and maintaining ledgers. It also provides the needed accuracy in terms of ownership and history of assets. With blockchain technology, accountants gain a more unobstructed view of their organization’s obligations and available resources. So, it comes as no surprise that a significant number of blockchain wallets are created monthly, a chunk of which belong to companies. In fact, firms in the US are estimated to spend $1.1 billion on blockchain technologies by the end of 2022, according to data published by Statista (Statista, 2020).

The Big Four in the accounting industry—Deloitte, Price Waterhouse, Ernst Young, and KPMG—join the blockchain trend by having people work in distributed ledger laboratories. This is in the hopes that immutable distributed ledgers will become a reality. In that case, their audit and accounting divisions will most likely become obsolete.

Source: Blockchain.com

Key takeaways

  • The accounting industry sees more investments in blockchain-based projects.
  • Deloitte, Price Waterhouse, Ernst Young, and KPMG are taking significant leaps in learning more about the technology.

7. Utilizing Social Media

The effects of social media encompass different industries. And the accounting industry is one of those. The use of social media in various industries helps improve brand awareness, increases sales, and drive website traffic. For accountants, it is quickly becoming a powerful branding and sales tool that boosts their exposure, demonstrates their expertise, and provides many opportunities to learn more about the industry.

An effective social media strategy can contribute to the profitability of a business. Social media sites like Facebook, Twitter, LinkedIn, blogs, and community forums help businesses keep in touch with clients. Accounting firms also benefit from monitoring competitors and industry trends. As far back as 2014, about 77% of accountants already use social media as part of their marketing and branding strategy (University of New South Wales, 2018). This is reinforced by a more recent report, illustrating that accounting firms of all sizes are using different social media platforms for their business. This figure is sure to grow in the coming years, especially with a whopping 4.20 billion active social media users as of 2021 (We Are Social, 2021).

Source: Accounting Today

Key takeaways

  • More and more accountants are using social media to establish a credible reputation as a subject matter expert.
  • Social media allows accounting firms to gain more exposure.

8. Advisory Services

Experts are predicting a hybrid approach that combines accounting technology and financial advisor input in the near future. This comes from the discovery of new solutions for analytics that allow accountants to focus more on decoding data for deeper insights. Unlike other tasks in accounting processes, decision-making will always fall into the hands of human professionals and experts. Hence, complete automation in the accounting sector cannot be possible.

The increasing introduction of more advanced technologies in the accounting industry allows accounting firms to focus on the quality of their advisory services. Services like growth profitability and strategies, as well as business intelligence, are becoming better and are growing in numbers. The elimination of manual and repetitive tasks opens opportunities for accounting firms to spend more time analyzing data, providing insights, and giving advice to their clients, especially in a disruptive time as the COVID-19 pandemic.

Automating accounting processes also means fewer errors, thereby increasing client confidence in the data and improving the quality of advice given to them. Moreover, with robotic process automation (RPA), accounting professionals can rely on AI to understand client intent or base its current actions on past data (Bernard Marr & Co).

Source: Statista

Key takeaways

  • Accounting technology will empower financial advisors in the future.
  • Because of advanced accounting solutions, accountants and similar professionals have more time analyzing financial data.

9. Role of AI

Artificial Intelligence (AI) is producing positive results in the accounting industry. It allows analyzing large volumes of data at high speed, as well as increasing productivity and generating more accurate data at a reduced cost. The importance of AI in accounting is growing more steadily as it optimizes administrative tasks and accounting processes that result in various structural changes. AI provides vast opportunities for accountants and a new level of efficiency for workflows.

The Sage Practice of Now 2018 report reveals that about 66% of accountants would invest in AI (Sage, 2018). More recently, 58% of accountants also believe that AI can help them improve overall efficiency and are looking forward to adopting relevant AI applications for their company (Sage, 2019). These figures only show that AI is transforming the industry. However, experts do not see AI replacing human roles. Instead, AI will be assisting human decision-making and empowering lucrative and in-depth analyses.

Role of AI in accounting

Key takeaways

  • About 66% of accountants are willing to invest in AI.
  • AI is becoming increasingly important in optimizing accounting processes and administrative tasks.

10. Big Data in Accounting

Just as big data plays a crucial role across many sectors, it fills the same significant role in the accounting industry. Big data supports companies and firms through expanded assessment methods, with accountants and finance experts working behind the scenes. Professionals identify which of the collected data are the most valuable and then turn them into actionable insights. This makes it crucial to understand what big data is in making business decisions.

With the use of big data, accountants and experts transform key internal data sets into secure, vigorous, and important data analyses. Globally, 63% of organizations are also looking to adopt big data in the next few years (Dresner, 2020). Meanwhile, a growing number of firms are now prioritizing accountants who have extensive knowledge in analytics and data science. This shows that the accounting industry is shifting from its reactive nature to becoming more proactive. CPAs, backed by big data, can now focus more on planning, taking control, analyzing processes, and anticipating problems before they even happen.

Big Data Adoption in Companies Worldwide (2019)

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Sources: Dresner

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Key takeaways

  • Big data plays a crucial role in the accounting industry.
  • Backed by big data, CPAs can focus on business planning and identifying potential issues.
  • When hiring, firms are prioritizing accountants who have data science and analytics backgrounds.

11. Remote Work Setting

In August 2020, the unemployment rate for finance and accounting roles in the US was 5.7% versus the national unemployment rate of 8.4% (Controllers Council, 2020). Employers these days are having a hard time finding top talents in finance and accounting. This is why it is more important for them to broaden candidate search and hiring requirements. And for the first time in history, candidates get to dictate certain terms of their employment, among which is having a flexible and remote work setting.

Accounting leaders are consequently adapting to the trend of allowing employees to engage in remote work. According to a 2020 survey published by Arizent, 85% of CPA firms will allow their firms to work from home even after the pandemic (Accounting Today, 2020). This would not have been possible in the past. Still, with technological advancements and the emergence of computerized accounting systems, accountants working from home are able to produce excellent results in their work as those in office settings.

Key takeaways

  • 85% of accounting firms said that they are “very” or “somewhat likely” to let employees work remotely even after the COVID-19 pandemic.
  • In August 2020, the unemployment rate for finance and accounting roles in the U.S. was 5.7%.
  • Accounting leaders recognize the practical benefits that a remote work setting brings.

Monitoring Accounting Industry Trends

Current accounting trends tell us one thing: digitization is as ubiquitous in the accounting sector as it is anywhere else, but human roles remain just as relevant. Another development that will define accounting practice in the future is the growing acceptance of remote work in the field. It’s already big in other industries and accounting will see more of it in the future.

There are benefits to mine from the advanced solutions brought by the recent developments in the accounting sector. Among these are saving time, making tasks more efficient, and having more accurate analytics. Other than these, however, reducing costs is one of the significant benefits that companies and accounting firms experience as they embrace the latest technologies to optimize processes. Reducing costs is especially important as the world navigates the economic havoc brought about by the COVID-19 pandemic.

If you’re looking for accounting platforms that fit your budget, you may want to check out the costs of top accounting solutions that are available in the market today.

 

References:

  1. Bernard Marr & Co (n.d.). Artificial Intelligence In Accounting And Finance. Retrieved from Bernard Marr & Co
  2. Dresner (2020). Big data technology adoption plans in organizations worldwide from 2015 to 2019. Retrieved from Statista
  3. Hood, D. (2020). Despite productivity drops, firms commit to remote work in reopening. Retrieved from Accounting Today
  4. Sage (2018). Accountants Adoption of Artificial Intelligence Expected to Increase as Clients’ Expectations Shift. Retrieved from Sage
  5. Sage (2019). The Practice of Now 2019: An essential report for accountants. Retrieved from Sage
  6. Sage (2019). Sage Research Reveals that 90% of Accountants Worldwide Believe There Has Been a Cultural Shift in the Accountancy Profession. Retrieved from Sage
  7. Spade Technology (n.d.). The Age of Automation and How it Impacts Business and Workflow. Retrieved from Spade Technology
  8. Statista (2019). Projected spending on blockchain in 2022, by region. Retrieved from Statista
  9. Statista (2020). Accounting Services in the US. Retrieved from Statista
  10. We Are Social (2021). Digital 2021: Global Overview Report. Retrieved from DataReportal
Astrid Eira

By Astrid Eira

Astrid Eira is a resident B2B expert of FinancesOnline, focusing on the SaaS niche. She specializes in accounting and human resource management software, writing honest and straightforward reviews of some of the most popular systems around. Being a small business owner herself, Astrid uses her expertise to help educate business owners and entrepreneurs on how new technology can help them run their operations. She's an avid fan of the outdoors, where you'll find her when she's not crunching numbers or testing out new software.

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2 Comments »
Accounting Services Dutchess County says:

Automating more accounting processes is a key trend in the industry. Automation eliminates confusion and minimizes errors, which is why companies are more inclined to invest in automated solutions. Thanks for sharing!

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James OBrien says:

What lies beyond for the profession might be the expansion of the scope of our profession to include all data types. Accountants are generally considered the masters of the world of financial data and not all that concerned with the world of non-financial data. Accounting has traditionally focused on recording and protecting the transaction event where money or value changes hands. In our digital world an examination of all the communications and transmissions before, during, and after that exchange event would reveal most of what happened. Security in today's digital world for that exchange event requires we think about extending secure practices to all these lessor events.

Our clients need help designing, organizing, and then analyzing the data created by these nonfinancial information systems. Marketing research, advertising campaigns, sales funnels, service funnels and all the information important in providing customers with the user experience that the Omni Channel Customer Experience demands. Coordinating financial and non-financial information systems in order to provide the results our clients require involves an inter-disciplined approach. Accountants are better prepared to work with marketing data than marketing executive would be to work with accounting data. Give accountants the right cloud based software tools for the job and that opens an entirely new realm of client service possibilities. What lies ahead might be the transition of accounting from the traditional pipeline business model to the new digital platform business model that Sangeet Paul Choudary keeps talking about.

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