Best Accounting Software for Small and Medium Businesses in Australia

Assuming that if you’re running a small or medium-sized enterprise (SME) in Australia, you’ve probably found yourself drowning in a sea of receipts, invoices, and financial statements at some point. Sound familiar? 

Well, it might be time to consider upgrading your financial management game with some top-notch accounting software. But with so many options out there, how do you choose the right one for your business? 

Don’t stress, we’ve got your back. Let’s take a stroll into the world of accounting software and find out why it’s a game-changer for SMEs, explore the best options available in 2024, and help you make an informed decision. 

Why SMEs Need Accounting Software?

Before we jump into the nitty-gritty, let’s take a moment to understand why accounting software is such a big deal for small and medium businesses. 

You might be thinking, “I have a good old spreadsheet. Why do I need advanced software?” Well, trust me, there’s more to it than meets the eye. Accounting software is like having a virtual financial wizard at your fingertips. It performs several functions such as accounting and bookkeeping, helping you document and summarise financial transactions, and helping you know how much cash you have, and so on.

But that’s just the tip of the iceberg. As reported by Zoho, a study revealed that 71% of small business owners found that using accounting software saved them time and improved their financial decision-making (Zoho, 2023). 

So, what are the key benefits that make accounting software a must-have for SMEs? Let’s break it down: 

1. Reduces Human Errors: We’re all human, and humans make mistakes. But when it comes to your business finances, errors can be costly. Accounting software greatly helps in minimizing the occurrence of human errors by automating calculations and data entry. Deadlines? Worry no more about them crashing on you and messing up your hours. 

2. Saves Time & Money: Time is money, in business. Accounting software automates many time-consuming tasks so that you can devote more time to business growth. A survey by Soleapp found that small business owners save an average of 10 hours per week by using accounting software (Soleapp, 2023). 

3. Syncs Financial Data: The olden days of entering figures from one system to the other are long gone. Today’s accounting software can transfer data between more than one platform, ensuring your financial information is always up-to-date and consistent. 

4. Automates Financial Reports: In a business meeting and you need a financial report in the nick of time? No worries! Accounting software can generate professional-looking reports at the click of a button. This feature is particularly convenient when you’re trying to secure funding or attract investors. 

5. Enhances Decision-Making: With real-time financial data at your fingertips, you can make informed decisions about your business. From cash management to growth strategies, accounting software allows you to understand what you need.  

6. Streamlines Tax Compliance: Let’s face it, dealing with the ATO can be a headache. However, you can cut down the tax compliance time and stress with appropriate accounting systems, ensuring you’re always on top of your obligations and avoiding those nasty penalties. 

Seven Best Accounting Software in 2024 

Now that we’ve covered why accounting software is essential, let’s look at the top contenders for 2024. Each of these options has its own strengths and weaknesses, so let’s break them down to help you find the perfect fit for your business. 

1. Xero 

Pros: 

– User-friendly interface 
– Excellent mobile app 
– Robust reporting features 
– Integrates with over 800 third-party apps 

Cons: 

– Can be pricey for larger businesses 
– Some advanced features require add-ons 

Xero has reached the top ranking in the list of accounting software used by Australian SMEs and it’s for good reason. Its user-friendly interface and comprehensive features make it a solid choice for businesses of all sizes. 

Plus, as it prioritises in the cloud business model, you can access your financial data anytime, anywhere. As one Sydney-based small business owner put it, “Xero has been a game-changer for us. It’s like having a financial advisor in my pocket!” 

2. MYOB 

Pros: 

– Tailored for Australian businesses 
– Strong payroll features 
– Excellent customer support 
– Comprehensive reporting tools 

Cons: 

– Interface can be less intuitive than some competitors 
– Some users find it slower to navigate 

When it comes to accounting software in Australia, one cannot forget about MYOB. It’s particularly well-suited to businesses with complex payroll needs. 

Speaking about his experience, a Melbourne-based entrepreneur said, “MYOB’s payroll features have saved us countless hours and headaches, especially during tax time.” 

3. FreshBooks 

Pros: 

– Simple, intuitive interface 
– Great for freelancers and service-based businesses 
– Strong invoicing and time-tracking features 
– Affordable pricing plans 

Cons: 

– Limited inventory management 
– Fewer integrations compared to some competitors 

As a freelancer or a service-providing business owner, it’s highly likely that you would appreciate the versatility of FreshBooks. Its focus on simplicity and ease of use makes it perfect so you concentrate more on your profession.

4. QuickBooks Online 

Pros: 

– Powerful features for small to medium businesses 
– Excellent reporting capabilities 
– Strong inventory management 
– Good integration with third-party apps 

Cons: 

– Can be overwhelming for very small businesses 
– Some users find the interface cluttered 

QuickBooks Online is a heavyweight in the accounting software world, offering a robust set of features that can handle the needs of growing businesses. In particular, its inventory planning is exceptional.

5. Zoho Books 

Pros: 

– Affordable pricing 
– User-friendly interface 
– Strong automation features 
– Part of the larger Zoho ecosystem 

Cons: 

– Limited payroll features 
– Fewer integrations compared to some competitors 

Zoho Books provides excellent features and a reasonable pricing option, making it ideal for small and medium enterprises with budget-consciousness. Its automation features are particularly impressive, helping to streamline many routine accounting tasks. 

6. Thriday 

Pros: 

– All-in-one financial management platform 
– AI-powered insights and recommendations 
– Integrated banking and accounting 

– Designed specifically for Australian businesses 

Cons: 

– Relatively new to the market 
– May have fewer integrations than established competitors 

Thriday is the new player in the industry and is going places due to its unique concept of making financial management effortlessly. By combining banking and accounting in one platform, it offers a unique solution for Australian SMEs. 

7. Reckon 

Pros: 

– Affordable pricing 
– Good for micro-businesses and sole traders 
– Simple, straightforward interface 
– Strong customer support 

Cons: 

– Limited features compared to some competitors 
– Fewer integrations 

Reckon is a great option for very small businesses or sole traders who need a simple, no-frills accounting solution. Its low cost and usability is appealing to most beginners.

Key Considerations for Choosing Accounting Software 

Now that we’ve looked at some of the top contenders, how do you choose the right one for your business? Here are some key factors to consider: 

#1 List of Features Your Business Needs 

Every business is unique, and so are its accounting needs. Start by making a list of must-have features for your business. 

According to Blue Lotus, some essential features to consider include: 

– Invoicing and quotes 

– Expense tracking 

– Bank reconciliation 

– Payroll processing 

– Inventory management 

– Financial reporting 

– Tax compliance tools 

#2 User-Friendly Interface 

Let’s be honest, if the software is a pain to use, you won’t bother with your bookkeeping for long. Choose software that has a simple layout that you and your team can easily navigate. 

As a business owner in Perth recounted, “We switched to a more user-friendly system, and suddenly, everyone in the team was more engaged with our financial processes.” 

#3 Cost and Pricing Structure 

Accounting software is an investment in your business, so it’s important to do a cost-benefit analysis. According to CPA Australia, factors to consider include: 

– Initial purchase or setup costs 

– Ongoing subscription fees 

– Additional costs for extra users or features 

– Training and implementation costs 

– Potential savings in time and resources 

Remember, the cheapest option isn’t always the best value in the long run. 

#4 Regulatory Compliance 

Ensuring your accounting software meets Australian regulatory requirements is crucial. Look for software that: 

– Complies with Australian Accounting Standards 

– Supports Single Touch Payroll (STP) 

– Facilitates GST reporting 

– Assists with BAS preparation Scalability 

As your business grows, your accounting needs will likely change. Choose software that can scale with your business. 

Consider factors like: 

– Ability to add users 

– Upgrade options for additional features 

– Capacity to handle increased transaction volumes 

#5 Data Security 

In today’s digital age, data security is paramount. Ensure the software you choose has robust security measures in place, including: 

– Data encryption 

– Regular backups 

– Multi-factor authentication 

– Compliance with data protection regulations 

Choosing the right accounting software for your small or medium business in Australia can be a complicated task. But armed with the right information and a clear understanding of your business needs, you can easily choose which accounting software will pave your way to success. Remember, the best accounting software for your business is the one that meets your specific needs, fits your budget, and helps you manage your finances more efficiently. 

Whether you’re a tradie in Tassie or a startup in Sydney, there’s a solution out there for you. To help you compare some of the popular options we’ve discussed, here’s a handy comparison table: 

Software	Pricing (Starting from)	Best For	Key Features
Xero	$27/month	All-round use	User-friendly, 800+ integrations
MYOB	$24/month	Australian businesses	Strong payroll, local support
FreshBooks	$15/month	Freelancers, service businesses	Simple interface, great invoicing
QuickBooks	$15/month	Growing SMEs	Powerful features, inventory management
Zoho Books	$11/month	Budget-conscious SMEs	Affordable, strong automation
Thriday	$29/month	Tech-savvy Australian businesses	AI-powered, integrated banking
Reckon	$8/month	Micro-businesses, sole traders	Simple, affordable

(Source: Blue Lotus, 2023) 

Keen to make a step forward in business accounting with some top-notch accounting software? Remember, in the world of small business, staying on top of your finances isn’t just smart – it’s essential. After all, when your finances are in order, you can focus on what you do best – running and growing your business. And isn’t that what it’s all about?