Free Business Accounting Software Improves

One has to wonder whether accountants should start fearing for their jobs as more and better improvements are made to free business accounting software whose revenue streams are …

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One has to wonder whether accountants should start fearing for their jobs as more and better improvements are made to free business accounting software whose revenue streams are supported by ads rather than customer purchases. Companies like Toronto-based Wave Accounting provide superb accounting software for free, and that should make companies like Intuit (Quickbooks) and Outright nervous, despite how inexpensive their services currently are. More consumers are discovering that these free programs really work, are audit-worthy and that the ads really aren’t that annoying, especially considering the price point. For more on this continue reading the following article from TheStreet.

I will leave Intuit’s fate to better minds. But considering how good free business accounting tools like Wave Accounting are becoming, it’s a safe bet the company won’t be bumping up prices for business ledger management software like QuickBooks.

The Web era’s "everything-as-ad-supported-medium" business ethic has found an odd new niche: business accounting software. Never mind that excellent business ledger tools are cheap. Intuit and Outright, both based in Mountain View, Calif., and Vancouver’s Kashoo offer powerful accounting tools for about $10 a month.

In these Web free-to-all days, sophisticated ledger-management payment and bank reconciliation software packages — the once-for-enterprise-only stuff of ADP, NetSuite or Peachtree by Sage — are now ad-supported Web services that are totally free.

That is correct: When it comes to business accounting, free is the new black.

No-cost services are flourishing. Toronto-based Wave Accounting claims it has managed a combined $20 billion in expenses and income since it launched in mid-2010.

"We are currently signing up tens of thousands of small businesses every month," says Rob Maurin, vice president for community content and communications at the company.

To get a feel for how real, really free accounting tools are, I gave Wave a solid once-over this tax season. My takeaway: It is by no means perfect — and the issue of privacy needs to be carefully considered. Still, I am seriously considering migrating my own business to Wave.

Here’s why:

1. Free accounting tools work.

I was immediately impressed by Wave. Signup takes, no kidding, 12 seconds. I timed it. Just log in and get a free account. Try that with Intuit’s QuickBooks. (Note: Use a stout password, please — this is important information you don’t want stolen.) In an instant, before you are all the graphs, ledgers and accounting tools you need to keep your business on the right side of the IRS.

The feature set is top-notch. There was an effective customizable recent activity and financial snapshot tool. I liked the ability to automatically import transactions from a bank or credit card. There were well-laid-out income reports, including a breakout of aging payables, a good sales tax reporting tool, and even a reasonable balance sheet engine.

What else could a bean counter need?

2. The ads are annoying — but not that annoying.

There is no getting past it. You’re gonna see banner ads while you do your books. For me, it was promotions for Newegg, EasyCopy, Shopify — stuff like that. Who knows what the Internet ad content blender will serve up to you. But you get the idea. There is also something called a "Business Savings" tab, where promotions on business services are flagged — mostly things like discounts on Experian and HP printer cartridges. A slick online marketing service like Amazon, Wave is not. But, overall, the marketing was decidedly soft-sell. Not distracting at all. And there was no beating the price.

3. Assuming you have checks and balances, the books are audit-worthy.

At least in my demo, the financial ledgers felt solid. Assuming the data is good going in — and you must invest in solid data entry/bookkeeping protocols to keep your ledgers audit-ready — the reports felt firm coming out. Calculations were first rate. It was easy to add in "collaborators." That is, that cranky accountant of yours to double-check your work. Overall, the all-important financial narrative of where the money comes from, where it goes and why, was clear.

In a worst-case audit scenario, I would have no problem sitting across from an IRS rep with a tool like Wave.

Things to keep in mind before you migrate: design, support and privacy. Is Wave the be all and end all in business accounting tools? Absolutely not.

The layout is primitive compared to, say, FreshBooks or QuickBooks. You are also dealing with a start-up that may go out of business. You will need to back up your data. Then there is the issue of support, which is strictly via email. My questions usually took about a day or so to get answered.

And then there is that eerie feeling that people are watching. Like all cloud-based accounting options, your data is open to third parties. Wave takes the extra step and matches that data to advertisers. The company says that, like Google, it discloses no "individually identifiable information."

But today’s raging debate over privacy is happening for a reason. You will want to take a good, long test drive with this tool to see if it is private enough for you.

What’s a smart businessperson to do? Give Wave a good solid look. You should expect to be impressed with what Wave can do. I would expect you to start thinking of ways you can import this tool into your shop.

This article was republished with permission from TheStreet.

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