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Medium-sized businesses experience many of the same challenges as their small business counterparts, only on a larger scale. One of the growing pains you might have in your medium-sized business is choosing the best accounting software for your company’s needs.
Of the dozens of options available, how do you know you are choosing the best accounting software for your medium-sized business? In this article, we’ll teach you how to assess your medium-sized business’s accounting software needs, then boil down the various software options to the best in class for your business.
As always, it’s important to do your own due diligence before choosing the software solution or solutions you will use in your business. Use this article as a guide to help direct your decision, but also take advantage of your accountant’s expertise and any free trial periods before making your final decision about which accounting software for medium-sized businesses is best for you.
If you started your business from scratch and have grown it to a medium-sized enterprise—meaning you likely have more than 50 employees and at least $10 million in annual revenue—you might wonder how things have gotten so complex in your business. What you could once manage comfortably on your own has now burgeoned into a company with dozens of employees handling hundreds of tasks you must be able to manage—without micromanaging.
At this stage in business, it becomes necessary to start thinking of your business in terms of departments—including your accounting department. Even if each department only consists of one employee reporting to you, creating systems and processes for each department in your business will help you run the entire enterprise more effectively.
Your accounting function is one of the most critical tasks for you to oversee in your medium-sized business. If you have handled the accounting on your own up until now, handing this task off to an employee can be a nerve-wracking experience. Yet it is necessary to free your time so you can focus on more strategic business initiatives.
Unfortunately, stories abound of dishonest employees in the accounting department embezzling from their employers. This shouldn’t dissuade you from delegating your accounting, but it should serve as a cautionary tale to get the right controls in place to protect your business. The right accounting software—or suite of solutions—can help you with this.
Software isn’t the only answer to the internal control issue, though. You must have a separation of duties in your business to ensure no one employee has complete access to financial information and duties. Your accountant can help you set up a system to use internally to help mitigate this risk.
Payroll and human resources issues become more complex once you reach and exceed 50 employees in your business, too. Your in-house accountant might have significant payroll experience, but it’s important to still think of payroll and human resources as two independent departments in your medium-sized businesses.
Before we dive into our best accounting software for medium-sized business options, let’s take a moment to assess your medium-sized business’s accounting needs. The answers to each of these questions will help you choose the accounting software solutions which will serve your business the best.
With the answers to these questions in hand, we’re ready to move on to the top five accounting software solutions for your medium-sized business.
If you answered yes to all five questions above, QuickBooks Enterprise Solutions has you covered. QuickBooks Enterprise Solutions offers industry-specific tools, reports, and features for contractors, manufacturers and wholesalers, nonprofits, and retailers. This powerful software also includes advanced inventory features and advanced pricing options for your customers, meaning you can truly customize the software to fit your needs.
A built-in sales tax module helps keep you compliant with all sales tax laws which apply to your business. And with Enhanced Payroll, keeping your employees paid and your tax filings up to date is a breeze.
As for internal controls, QuickBooks Enterprise allows you to set custom user permissions for up to 30 users, meaning you have complete control over who sees what information in your growing medium-sized company. QuickBooks Enterprise Solutions costs $1,351.80 for your first year for the Gold package. If you need advanced inventory and pricing features, your first-year investment is $1,663.20.
For ultimate security, you may decide to host QuickBooks Enterprise Solutions in the cloud using a hosting company like Right Networks. Hosting solutions require an additional, per-user fee of around $60 per month
One thing to keep in mind with QuickBooks Enterprise, though: If you have complex human resources or payroll needs, we strongly recommend not handling your payroll and HR functions in-house, even with QuickBooks Enhanced Payroll. When it comes to HR and payroll, you are much better-served outsourcing to a reputable company or companies that handle these responsibilities… and the liabilities that can accompany them. If you choose to outsource your payroll and HR functions, read the terms of service carefully to ensure the company you are outsourcing to will cover any penalties incurred due to errors or negligence.
Not so long ago, QuickBooks Online was considered unsuitable for medium-sized businesses.
With the advent of QuickBooks Online Advanced, medium-sized companies can experience the ease of use of QuickBooks Online and get the powerful accounting abilities they need. QuickBooks Online Advanced supports up to 25 users and three accounting firms, unlimited class and location tracking, unlimited chart of accounts, top-tier support, and five courses to help your team learn how to use the software.
Perhaps the most exciting thing about QuickBooks Online Advanced, though, is that it includes a subscription to Fathom—a powerful reporting and analytics software. Fathom helps QuickBooks Online Advanced users get the most out of their accounting data by providing dashboards and the ability to customize projections.
QuickBooks Online Advanced costs $150 per month, putting it in line with QuickBooks Enterprise in terms of pricing. Be warned, though: Depending on your industry, you might need to invest in additional apps in order to have all the functionality you need in your accounting software. These additional subscriptions can quickly add up, so do your due diligence before going all-in with QuickBooks Online Advanced.
We’ll be the first to tell you Zoho Books has some quirks. It’s not quite as user-friendly as QuickBooks products, and we don’t agree with the way it handles reimbursed expenses. However, when it comes to growing with your business, Zoho’s products are completely scalable, making it a good solution for your medium-sized business.
Zoho Books does everything you would expect a cloud-based accounting solution to do: bank feeds, invoices, estimates, time and project tracking, reporting, tax calculations, and more. For maximum power, combine Zoho Books with Zoho CRM, Forms, and Mail to have your entire business in one ecosystem.
Zoho Books costs $29 per month. Although that is considerably less than the other accounting solutions on this list, keep in mind your investment will increase if you add other Zoho modules to your technology stack.
Sadly, accounts payable fraud is all too common in medium-sized businesses. It’s one of the easiest types of fraud to perpetrate, too. You don’t want to spend your time writing and mailing checks, but how else can you make sure only approved invoices are being paid (and that they are actually being paid to your vendors instead of to an employee)?
You can take the stress out of managing your company’s accounts payable with Bill.com. Bill.com integrates with QuickBooks, Xero, Sage, and NetSuite, but you can use it as a standalone solution if you use an accounting software Bill.com doesn’t integrate with. With multiple user levels and customizable options, you can give your accounting department as much or as little control over accounts payable as you want.
Bill.com also has multiple approval levels, too. You can customize the workflow so either you or one of your employees can initiate payments, either with or without prior approval. And with optical character recognition (OCR) capabilities, you can eliminate data entry and see a scan of the bill all in one place.
Bill.com’s pricing starts at $39 per user per month, with additional per-transaction fees depending on what services you choose to use.
Even with an in-software sales tax module, managing sales tax can be a huge time-waster in your business. If you have nexus in several states, managing sales tax becomes even more onerous. Fortunately, there is a solution to automate this function for your business: TaxJar.
TaxJar offers automated sales tax reporting and filing options for ecommerce and other multi-channel sellers. Even if you sell in-house only, you can upload a CSV file of your transactions to TaxJar and use their powerful automation to simplify your sales tax burdens.
TaxJar’s pricing starts at $19 per month, with an additional $25 fee for each state you enroll in their AutoFile option.
Delegating your business’s accounting functions can be stressful, but choosing the best accounting software for your medium-sized business can help alleviate some of that stress. We chose our five favorite solutions for this list, but it’s possible your business has requirements one of these solutions can’t handle. Take some time to evaluate the options in this article, as well as software specific to your industry. Use any trial periods offered to get a feel for the software you are evaluating, then choose the solution that works best for you.
As always, the best accounting software for your medium-sized business is the one you will use to its full functionality. Make sure you understand the nuances of the software before you make a commitment, and make reviewing your accounting reports a priority in your business. This will help you be confident in your numbers… and your accounting software choice.
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