Most apps start small and add features and (hopefully) usability improvements year by year. Small business accounting apps, on the other hand, have evolved in the opposite direction. Products from companies like Peachtree and DacEasy and MYOB started their lives as full-blown, multiple-module, highly complex applications that were priced for the small business market in the early 1990s. The problem? They offered far more than most companies needed. They also used a lot of accounting jargon that people didn’t understand, and, worst of all, they could be very hard to use, even for a professional.
Intuit changed that with its first version of QuickBooks. The program was developed for DOS, and its main menu contained only a few simple choices, including CheckBook, Invoicing/Receivables, Accounts Payable, Chart of Accounts, and Company Lists. It relied on dialog boxes, registers, empty fields, and function keys for navigation and data entry. But a check looked like a paper check blank, and the software clicked with a lot of companies that needed its simplicity.
More than 20 years later, we have multiple versions of QuickBooks for Windows, as well as QuickBooks Online. Intuit remains the market leader, but other cloud-based applications like Xero and Zoho Accounting, which were launched on the Internet instead of making the leap from desktop software, provide similar tools and usability. There are now many choices when it comes to online double-entry accounting solutions. The problem, in some cases, is that these cloud-based accounting services have actually come full circle in terms of their evolution. That is, their capabilities have begun to rival those early, not-so-friendly but powerful DOS-based applications.
Still, at their best online accounting apps have a lot to offer, as detailed below.
Even the very smallest businesses need to keep track of their money, from payroll to taxes. In fact, many operate so close to the bone that every dollar is critical. Very small businesses and sole proprietorships need accounting software at least as much as their larger counterparts. The problem is, what they need and what a bigger business needs are most probably not the same thing at all. If you’re a sole proprietor and you’ve tried a cloud-based accounting solution aimed at larger businesses in the past, you may have found that you’re paying more than you really want to for features that you don’t really need. And maybe you went back to the old tried-and-true methods of keeping your books in a spreadsheet, or even in actual, literal books—made out of paper! It’s easy to understand how that could happen, but it’s a shame in this day and age not to take advantage of best-of-breed accounting software, wizard-based simplicity, access from anywhere, and the safety of an offsite backup.
But don’t despair, there’s a whole breed of online accounting tools made just for sole proprietors, and we’ve reviewed them. The best of them are extremely affordable and offer mobile versions, integration with major banks, quarterly estimated income tax calculations, reports that make sense for very small businesses, and more. They may not offer a ton of integration with other add-ons and corporate homepages for employee access—or a bunch of other things you don’t need.