Which accounting software is best?
Remember the good old days when your only money problems were trying to stretch your allowance until your next “payday”? Now you have to worry about taxes, budgeting and balancing your income with your bills. And many have to run their own businesses with a dizzying array of black and red numbers to keep track of.
You could try doing everything manually, but it would be much easier to use accounting software like H&R Block 2021.
What you need to know before buying accounting software
Complexity of software
Everyone’s finances are different. As such, there are several layers of software that aim to give you only what you need.
- Base software is for those with little to no complications. If your only income is from one W-2 job and you live alone, this is probably all you need.
- Advanced software includes those with more variables, such as deductions and joint filing, with or without children.
- Premium software covers additional income sources such as investments, properties and cryptocurrency.
- Own boss software is for freelancers, contractors, gig workers and the like. It’s the first tier to introduce features that you can use all year round instead of just during tax time.
- Small business software is for those who need year-round accounting, but not for those who have employees to pay.
- Company software is the last step for those with many accounts and people to manage.
Base
Regardless of the level you use, accounting software should have the same basic features, such as being able to import data and file your taxes electronically once they are completed.
What to Look for in High-Quality Accounting Software
Access
With the best accounting software, you can access your data anywhere with a single login and a matching mobile app. Some software even allows you to create multiple unique users to access and manage the data, but many software require each user to pay full price for the software.
Budgeting
The best accounting software has features, or at least guidelines, to help you create and track a budget. It is the foundation on which all accounting is based – what comes in and what goes out?
Payroll
If you have employees, then accounting software with payroll administration is a must. It allows you to create and maintain invoices and pay slips. Some programs even allow you to set up a direct deposit for your employees.
How Much You Can Expect to Spend on Accounting Software
Accounting software can be a one-time cost or require a monthly or annual subscription. One-time basic tax software is free, while complex accounting for businesses can cost hundreds to thousands of dollars. Monthly plans cost about $10-$100, with discounted annual options.
Frequently asked questions about accounting software
Can’t I just use a free spreadsheet?
A. For those with the most basic needs and the least complex tax information, a free spreadsheet is pretty much all you need. However, each new piece of information you add to the equation exponentially increases the complexity of your tax return alone, not to mention the complexity of your budgeting.
And since a lot of accounting software is simple and affordable, it’s worth considering saving yourself some money, time, and effort.
How much money will I save by doing my own bookkeeping versus using a certified public accountant?
A. To answer purely from a cash point of view, you can save hundreds to thousands of dollars. This depends on the cost of your software and how much an accountant would charge based on the complexity of your accounting needs.
That said, if you’re not the best with numbers, trying to do your own bookkeeping can easily add up to hundreds to thousands of dollars in errors and missed deductions.
What is the best accounting software to buy?
Top accounting software
H&R Block 2021
What you need to know: H&R Block offers several layers of software that are all easy to use.
What you will like: Service levels include a free online option for the simplest tax returns, a more complex “Deluxe” option, a “Premium” option for those with investments — including cryptocurrency — and a “standalone” option for freelancers, contractors and gig workers.
What to think about: This is last year’s tax information; the tax software for 2022 will be available in November. All of these are best for tax-related use rather than complex accounting.
Where to buy: Sold by Amazon, Dell and Staples
Top accounting software for the money
Quicken Home and Business 2021
What you need to know: This is an excellent option for tracking personal and small business expenses if you don’t have employees.
What you will like: You can download your bank statements directly into the software for easy tracking. It can recognize tax deductions and point out when they occur so you get your best returns. You can log in to your books anywhere, including from your phone.
What to think about: There is only an annual subscription option. Some customers were unhappy with the interface and called it outdated.
Where to buy: Sold by Amazon, HP and Staples
Worth watching
Intuit QuickBooks Desktop Premier Plus with Payroll 2022
What you need to know: This is the perfect software for those who run a thriving business with employees to pay.
What you will like: It includes unlimited customer support and automated data backup and recovery. Every update, including those related to changes in tax law, is part of the subscription. You can set up direct deposits for your employees within the software. You can also import your old spreadsheet information to get started.
What to think about: There is only an annual subscription option and it is one of the most expensive. For multi-user access, each user must pay full price.
Where to buy: Sold by Amazon, Dell and Staples
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Jordan Woika writes for BestReviews. BestReviews has helped millions of consumers simplify their purchasing decisions, saving them time and money.
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