Best small business accounting software? Good bank? Bookkeeping/invoice service?

by philg

Roughly every year it is time for me to ask readers what kind of accounting software they like. I’m advising a small LLC. Here are the characteristics:

  • one to three W-2 employees at any one time, paid via a payroll service (sadly this still ends up generating a huge amount of administrative hassle, including threatening notices from various government agencies)
  • about 15 customers, none of whom pay by credit card and many of whom have to be invoiced and, if they don’t pay, reminded (figure up to three hardcopy checks deposited per month)
  • revenue of perhaps $500,000 per year; profits perhaps of $50,000 per year
  • about 30 vendors, most of whom can be paid by credit or debit card

I’ve used QuickBooks Online for an LLC that I used to run. The main hassle was typically re-connecting with the online banking service of the small bank that the LLC used. Hold times for help could be epic, e.g., 30 minutes, but once connected the people seemed to know what they were doing. I can’t figure out how to use 99% of the system and it is fairly costly considering that it is maintaining a handful of database tables. Is there anything better out there? (An advantage of QuickBooks Online is that the accountant could also log in and pull down what he needed for doing taxes, fix any chart of accounts problems, enter capital equipment for depreciation, etc.)

This LLC has the flexibility right now to select a new bank for its checking account. Are there any that people especially like? Other than Bank of America, are some better for debit card fraud protection? Are there any where customers can send physical checks directly to the bank? (“lockbox” service, but not with the crazy fees that the big banks have for this and for only a handful of payments per month; it is really about making sure that important checks don’t get lost or buried)

What about an online accounting and/or bookkeeping service? Are there any that will do all of the invoicing and following up? Categorizing the comparative handful of expenses for this company (“bookkeeping” per se) doesn’t seem like a huge task once software such as Quickbooks Online is in place.

Thanks in advance for any help.

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13 thoughts on “Best small business accounting software? Good bank? Bookkeeping/invoice service?”

  1. Why would a tiny business want their customers sending payments directly to the company bank? That’s begging for hassles. And unless you are using a small bank, be prepared for big fees charged by any bank that agrees to accept payments from your company’s customers.
    Allowing customers to pay directly to a bank also opens the door for another layer of customer excuse-making. Eg “Oh, we mailed that check directly to your company bank, as you requested. You’d better check with your bank, I bet they’ve lost it.”
    Also, a payroll service, no matter how adept, cannot control the endless stream of annoying government requests/demands. I’ve experienced this firsthand for years.
    Phil, I believe I replied this to you back in 2011, but my post didn’t make the cut. So here goes again: sometimes a simple ledger and an ink pen is all that’s needed. I know that is pure anathema to a person like yourself, but sometimes simplest is best.
    I’d bet our friend Frank Robinson would agree…

  2. Phil

    I’ve been running two companies on Xero for a couple of years now. Absolutely love it. Now, I’m Canadian and they’re Australian, but they seem to have bookkeeping/accounting figured out for US and Canada. They don’t have payroll for Canada yet and I think in the US they’re rolling out state by state.

    Take a look. I love it. http://www.xero.com

  4. Thanks, Mark. Frank Robinson using an ink pen? Stone tablet and chisel was probably how they kept the books at Robinson during his time! (though keep in mind that he was quite forward-thinking regarding tax law and had that captive insurance company in the Bahamas set up!)

  6. Diff between Xero and Quickbooks Online?

    Sorry, I can’t say. I didn’t look at Quickbooks when I made the move to online accounting (they may not have been available in Canada at the time).

    I do know Xero is one of the better SaaS products I’ve ever used. “Delightful” user experience, great support (my experience w/ Intuit support is it’s non-existent), good integrations, frequent updates, etc, etc. They also nice support for running multiple businesses, via a simple “quick-switcher”. I run 2 businesses on Xero and this was important to me.

    YMMV

  9. Bench bookkeeping isn’t appropriate for this company, I don’t think. There aren’t a huge number of transactions. It doesn’t take that long to categorize stuff in Quickbooks Online. And the bookkeeping that Bench offers doesn’t seem to be mission-critical. They’re not invoicing customers and keeping track of who has paid. They are putting a hotel bill into the “Travel” category. That’s great but the consequence of getting that wrong is not losing $10,000. It is having the IRS some years down the road saying “How come this bill from Hilton Hotels shows up in Office Supplies?” (zero effect on the final tax owed, of course) Nor is Bench doing accounting, I don’t think. They aren’t figuring out if something purchased should be expensed or depreciated and, if depreciated, on what schedule.

    I think Bench. at the quoted prices, would make sense for a company that had 10+ transactions per day. Otherwise it is a pretty high price to pay for logging into Quickbooks once/month and spending 15 minutes zapping transactions into categories. (Bench might not even save time because they aren’t necessarily familiar with the transactions; how do they know what a bill from “Jet Aviation” was for? (could be charter, maintenance, fuel, parking, etc.) So then they have to call or email the customer and ask “What was that bill from Jet Aviation for?”

  11. While oriented towards Web hosting companies, I might suggest WHMCS as it allows for quick and easy invoice creation, reminder emails, easy entry of checks/payments, automated (recurring) billing, and so forth. Not sure if it has an expenses module, but that doesn’t seem to be high on your list. http://www.whmcs.com

  13. Easy. Xero. Use it with multi-currency, which is something QB online can’t do to the same extent. The main difference between QB and Xero? Xero is intuitive and just works while in QB you have to search forever. Xero is cutting edge and QB always behind…
    Have used both and switched about 5 years too late!

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