It’s no walk in the park to simultaneously run a small and medium-sized enterprise (SME) and maintain its bookkeeping needs. You can invest in SME software with robust accounting tools to run your business like a well-oiled machine.
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This article covers the lowdown on SMEs, software selection tips and critical questions to mull over, standard SME accounting software benefits and features, the difference between cloud and on-premise deployments and the best accounting software for SME companies.
What This Article Covers:
- What Does SME Mean?
- Selecting Software
- Benefits
- Key Features
- Cloud vs. On-Premise
- Top SME Software
- Next Steps
What Does SME Mean?
SME, in this context, is an acronym for small and medium-sized enterprises. It can also mean small and mid-sized enterprises.
This acronym can also mean subject matter experts or people with particular knowledge and insights about specific industries and jobs.
Selecting Software
Choosing the best SME accounting software is daunting if you don’t know where to start. We’ve broken down the software evaluation process into nine simple steps called Lean Selection. These steps include:
- Establish: Why do you need a new solution? What’s wrong with current processes?
- Collaborate: Establish an internal software selection committee of executives, department leaders, colleagues and end-users.
- Define: Sit down with your committee and establish much-needed requirements and functionality in a new system.
- Distribute and Validate: Evaluate vendors that align with your requirements list.
- Justify: Determine whether you need a new solution or add-on modules.
- Prove: Ask vendors to set up demos, use cases or proofs-of-concept (POCs) to assess how specific software performs particular functionality.
- Rank: Score demos and total ownership costs, and rank each vendor accordingly.
- Negotiate: Sit down with your ideal vendor to negotiate a contract. If the contract seems sketchy, evaluate it with a law firm or lawyer. Repeat this step with other vendors from the previous step until you find agreeable conditions.
- Sign: Sign with your ideal vendor, and proceed to define an implementation plan.
Here are some questions to mull over in your quest’s preliminary stages:
- How many users, if any, will need access to the software? Is there an option to restrict access for specific users?
- Do you want an on-premise or cloud solution?
- What are the essential features of running the business? E.g., if you have inventory, you’ll need a way to track it, or if you have employees, a payroll option is vital.
- Is the software designed for a specific industry, such as manufacturing or construction?
- How can the program save you time and hassle with options like automatic tax calculations and recurring invoices?
- Are any fees added to the base cost? Is a free trial version available?
- What types of customer service and tech support does the provider offer?
- How is data protected? Are there security measures like data encryption and authentication in place? How is data backed up and restored?
- Can you add features or upgrades as needed to accommodate business growth?
- Is the software compatible with your bank so you can download transactions?
Asking these questions early in the process will make your job much more manageable and help weed out unaligned business requirement options.
Primary Benefits
SMEs are the backbone of any economy and possess many daily challenges. These challenges include targeting new customers while retaining current ones, raising brand awareness, finding competent and motivated employees and maintaining cash flow. You also have to stay on top of industry trends and technologies.
These issues often result from economic downturns, poor planning, a lack of organized bookkeeping processes and a tool that doesn’t centralize operations. However, investing in the ideal SME accounting software allows you to avoid most of these issues. This solution also offers numerous benefits, such as:
- Manages Accounts Payable and Receivable: Avoid penalties and take advantage of discounts by completely controlling your accounts payable. Verify payments with enhanced accounts receivable management.
- Drills Down Into Profits: Gain detailed cash flow and payment process insights.
- Tracks Payments: Monitor all transactions with seamless scaling and new product and service implementations. Find new ways to improve overall workflow efficiencies.
- Allocates Real-time Invoice Statuses: Receive alerts when invoices are sent, seen and paid by clients.
- Provides Easy Conversions: Send electronic estimates and quotes that automatically transform into invoices upon customer approvals.
- Offers In-depth Analytics: Obtain real-time bill and KPI insights to stay in the loop.
It’s no wonder professional accounting software for SME establishments is in demand. To ensure steady business growth, you need to take advantage of professional accounting help. Your goal is to maximize your chances of making it where others don’t, and implementing the best practices for fund management is vital.
Key Features
SME accounting software sellers offer standard and unique modules. Take every feature with a grain of salt. A module is not necessarily ideal for your business because of its popularity. Some standard features include:
- Inventory Management: Receive instant updates and insights on stock item quantities to avoid inventory shortages or overstocking. You can also pinpoint items quickly in any location or warehouse.
- Bill Management: Manage all bills and payment deadlines in one place.
- Reporting: Receive thorough KPIs, including profit and loss, customer balance summaries, accounts payable and accounts receivable aging summaries and more.
- Sales Tax: Automatically cipher and establish proper sales tax rates in or outside your location.
- Invoice: Draft personalized invoices and review statuses, such as when your clients see and pay them.
- Estimates/Quotes: Define thorough estimates and quotes, including payment terms, discounts and other line items.
- Bank Reconciliation: Efficiently connect, upload and reconcile bank transactions to ensure accuracy across the board.
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Cloud vs. On-Premise
A key consideration is whether to choose a local or cloud-based solution.
The Cloud
The cloud isn’t going anywhere. MarketsandMarkets expects the global cloud computing market to reach a value of $947.3 billion in 2026. Here are a few points that make the cloud a better SME option.
- Mobility and Ease of Access: Track real-time changes anywhere on any device, such as phones, tablets and laptops.
- No Upfront Commitment or Investment: Cloud-based software often uses a subscription model that’s relatively easy to understand and affordable to install.
- User-Friendly: Vendors usually design systems with small business owners in mind. The non-technical terms and easy-to-use interfaces mean that even with finite accounting knowledge, you can learn the intricacies of the software in a short time.
- Security: Cloud solutions come with better security measures to safeguard information, such as data encryption, two-step or multi-factor authentication, user access levels and more.
Of course, without an internet connection, cloud-based software can’t function, and while it’s unlikely your provider’s servers will go down, it’s still possible.
The cloud is also ideal if you have multiple facilities and warehouses that you visit. You’ll be able to manage your software and data on the go instead of waiting to return to the office.
On-premise
Implementing on-premise means hosting the solution on your servers and computers. You’re responsible for updating the software and contacting customer support. This option can be pricier, but costs can decrease after the initial onboarding process. On-premise is practical if you have one or two office locations.
Remember your requirements and whether cloud or local deployments are best during the selection process. A cloud-based solution’s ease of use and core functionality makes it the better choice for most small businesses.
Top SME Software
Technology advancements have made SME software for accounting professionals much more accessible, providing most of the same traditional accounting ERP functionality. Naturally, companies capitalized on the demand, leading to several choices. But each business has different needs.
To accommodate most needs, vendors offer solutions with multiple features and requirements. Unfortunately, this diversity makes it harder to find the exact program that aligns with your company’s goals. Nevertheless, we’ve compiled a list of the market’s top five SME accounting software. Let’s take a look:
Quickbooks Online
Quickbooks Online is a cloud-based SME software that also satisfies freelancers’ needs. It possesses assisted bookkeeping services and other financial services to simplify bookkeeping workflows.
A preview of QuickBooks’ dashboard.
Top Benefits
Monitors Cash Flow Management
Tracks accrued fees during the year to utilize data for cash flow estimates and management. You can also review your monetary balance in real time.
Provides Customizable Tags
Add custom tags to reports to trace and pinpoint payments.
Duplicates Invoices
Copy similar invoice formats for numerous clients.
Forecasts Profitability
Analyze projects for profitable and non-profitable trends. Connect this system with QuickBooks Payroll and TSheets for quicker updates and insights. Leverage dashboards and reports to gain total income vs. cost information. Mange over budget job costs and simplify daily expense tracking.
Supervises Contractors
Follow contractor payment statuses and craft ready-to-go 1099 forms for tax season. Track individual equipment rentals or supply usage payments as separate fees for vendors and contractors. Match charges to the correct areas on 1099 forms for easier distribution and fewer mistakes. Perform quick e-filing with one-click file services.
Primary Features
Bill Management
Monitor all of your bills and due dates in a centralized place. You can activate recurring bills. Partial bill payments are supported, and this program keeps tabs on the remaining portion of bills that need repayment. Direct deposit or check transactions are noted and tracked. After connecting your bank account, import all transactions and bill payments. Bill payments are promptly matched to vendors’ bills and recorded.
You can also execute online bill payments with separate platforms like Bill.com, Entryless, Veem and more and pay bills with credit cards, checks or online banking. Bills and invoices instantly sync with QuickBooks Online to deplete double-data entries and establish numerous bills to be paid on one particular date.
Reporting
Work with many reports and analyze numerous KPIs. Some documents and KPIs gauged with extra tools, dashboards and metrics include:
- Income statements
- Balance sheets
- Cash flow statements
- Open invoices (i.e., customer balances and past due amounts)
- Profitability
Modify reports per requirements and alert accountants of updates via email. Formulate spending roadmaps to pinpoint and track financial trends. Generate sophisticated finance and small business intel summaries and allocate them amongst business partners and stakeholders.
Sales Tax
Cipher sales tax rates for invoices after product assortment for dates, locations, product types, services and customers. Apply appropriate tax values to invoices based on the product categories and initial sale locations. Use the sales tax liability report to understand taxable and nontaxable agency sales.
Invoicing
Tailor invoices with business colors and logos for templates. Accept payments via online invoices and activate recurring invoices. Link billable hours with Google Calendar, TSheets or QuickBooks’ time tracking modules. Match payments to invoices swiftly, set real-time payment reminders and receive instant notifications when clients make payments.
Estimates
Design professional estimates like discounts, stock-keeping units (SKUs), payment terms and other line items. Email estimates to your clientele, and they can accept and sign them on mobile devices. Customizable estimate templates enable you to fix layouts and add logos, personal messages and custom fields for chronicling and tracking purposes.
Estimates convert into trackable invoices when customers accept them. Invoices also have a “Pay Now” button for different payment options, such as credit or debit cards, ACH bank transfers, Apple Pay and more. Process payments, track transactions and deliver funds to appropriate bank accounts.
Limitations
This accounting software for SME companies offers bountiful modules and advantages. It also comes with a few drawbacks. These limitations include:
- Lacking days-to-pay reports.
- Being pricey.
Platform:
Company Size Suitability: S M L
Xero
Xero is a cloud-based SME accounting software with real-time financial and revenue updates and enables companies to merge with 800 programs. It’s the perfect fit for retail, high-tech, non-profit, legal, hospitality and other industries.
An example of Xero’s accounts module.
Top Benefits
Implements a Smart List
Add contacts to specific groups and arrange them into lists according to buying trends, invoice amounts and locations to deliver email marketing campaigns.
Provides Better Data Visibility
Hides and allows selective data visibility after contacting Xero Support for help.
Offers In-depth Business Performance Dashboards
Initiate and track performance objectives with drilled-down informational charts and graphs that gauge gross profits, net profit on net sales and debt to equity KPIs.
Simplifies Bank Transactions
Monitor several bank accounts and feeds in a single place.
Boosts Fixed Asset Management
Upload bills for business assets like vehicles, hardware, machinery and office equipment. Craft journal entries to supervise asset depreciation and removals.
Primary Features
Invoicing
Construct personalized invoices with your branding themes, such as logos and payment terms. Initiate prompt invoice reminders and evaluate whether customers have seen the invoice and if they paid it. This tool offers functions that allow you to:
- Establish predetermined inventory items.
- Duplicate previously-used invoices.
- Activate recurring invoices.
- Send bulk invoices.
- Include instant payment tools for customers.
Invoice editing is limited, and you may maintain a record of users’ main invoice actions. You can assign expenses to a particular client when inputting receipts or bills and then attach the costs to invoices.
Inventory Management
Acquire current bestselling product lines and linked profit views daily. This SME accounting software allows pre-filled descriptions and prices for invoices and quotes as you produce them. Determine available good values with average cost method calculations and inputting spreadsheet inventory items. It also offers comma-separated values (CSV) templates. Add photos to inventory items and upload supplier contracts.
Reporting
Draft and customize reports to measure ideal KPIs for easy performance dashboard visibility. Share critical data with advisors who can create and publish thorough reports, prepare new, elaborate budgets or import existing ones to compare projected and actual financial performance.
Implement custom columns, formulas, text blocks and drag-and-drop accounts for editing purposes. Calculate variances between columns – i.e., actuals vs. budget or actuals vs. other actuals —with this tool’s formulas.
Performance tracking traces enterprise regions such as departments, areas, rental properties or sales staff. Execute lock dates to close accounts at the end of reporting durations and export reports as PDFs. You can also send them to spreadsheets with intact formatting and formulas.
Bank Reconciliations
Input automatic and protected bank transactions daily. The cash-coding extension groups similar purchases for easy matching. Set automated bank transaction matching rules for invoices, bill payments and purchases already documented in Xero.
Bill Management
Exhibit a thorough synopsis of bills and purchase orders on purchase dashboards. Manage cash flow with charts and graphs that display payment deadlines. Advocate payment schedules, prompt payments, and recent or recurring bill duplications. Email bills and other documents to Xero’s file inbox for paperless recordkeeping.
Allow customers to pay bills and invoices with debit and credit cards, direct debit, Apple Pay or other payment methods via the “Pay Now” button. Utilize stripe auto pay or GoCardless ACH debit to employ customers with automatic payments.
Limitations
This SME software brings many features and benefits to the table. But it also has a few disadvantages. These drawbacks include:
- Having trouble changing invoices when saved.
- Has a steep learning curve.
- Has downgrading problems.
Platform:
Company Size Suitability: S M L
Zoho Books
Zoho Books, another accounting software for SME organizations, offers a wide range of customers across several industries. It has add-ons, partners and integrations such as payment systems and in-house Zoho applications.
A preview of Zoho Books’ invoice accessory.
Top Benefits
Combines with Zoho Analytics
Integrate this solution with Zoho Analytics to convert information into thorough awareness.
Offers Mobility
Receive and add this system as an app for Apple and Android devices. Draft and send transaction statements, track time, attach recipes to fees, establish reminders and perform in-depth reporting.
Supervises Mileage
Use the GPS tool in mobile applications to track traveled miles and report them as bills.
Implements Multi-Currency
Conduct multi-currency pricing for accurate charges in any region. This program also records and converts fees into your company’s default currency.
Streamlines Sales Order Process
Tailor sales orders with logos, fonts and colors. Approve and convert estimates into sales orders and invoices. Craft partial invoices of available and unavailable products. Transform sales orders into purchase orders for vendors.
Primary Features
Invoices
Create new or templated invoices and add company logos or adjust fonts. You can also add check, web and cash payment options. Deliver client payment reminders. Establish recurring invoices and credit card payment activations. Approve transactions before distributing invoices and activate digital signatures by integrating with Zoho Sign. This integration helps you avoid forgery and tampering.
Chronicle retainer invoices for advance payments. Manage and apply credit notes for returns, refunds and future sales.
Bills
Generate, deliver and superintend all bills online. Execute recurring bills for standard interval purchases and send them directly to clientele. Send and approve bills before they appear in your accounts. Add landed costs to bills to determine total merchandise fees. Link customers to billable items from vendors and purchase orders. Convert purchase orders into billable statements.
Estimates
Draft estimates and quotes with contact information, item details and saved prices via modifiable templates. Send quotes after agreeing on a deal. When merged with Zoho Sign, you can activate digital signatures for agreement before submitting to customers. Transform estimates into invoices when clients approve them.
Collaborate with customers, send estimates and approve them with the customer portal. Evaluate negotiation and discount statuses and obtain estimate alerts when customers accept or make comments.
Inventory Management
Edit and arrange stock based on SKUs, product images, vendor information, costs and availability. Develop customized price lists that provide preferred customers and vendors with markups and markdowns. Leverage item tracking and inventory reports for effective inventory monitoring.
Launch reorder level notifications before items dip below the minimum quantity values and automatically send preset purchase orders to vendors. Document instant inventory changes and stock on site with current numbers and first-in, first-out (FIFO) methodology.
Sales Taxes
Employ default tax rates, define several taxes and input every relevant business exemption.
Limitations
This SME accounting software offers several compelling advantages and modules but possesses limitations. These drawbacks include:
- A clunky interface.
- Doesn’t automatically add dates and names.
- Payroll services are only available for California and Texas.
Platform:
Company Size Suitability: S M L
Sage Business Cloud Accounting
Sage Business Cloud Accounting, another cloud-based SME software, serves consulting, financial, taxation, legal, consumer and other industries. Top features include invoicing, bank transactions, reporting and inventory management.
An example of Sage’s sales module.
Top Benefits
Utilizes Mobility
Access this software on iOS and Android apps to craft and allocate invoices, record costs, review real-time business dashboard data and take receipt photos.
Provides Machine Learning
Match purchases to invoices automatically with machine learning. This capability also learns data selections and generates bank rules for automatic usage.
Implements Lean Cash Flow Monitoring
Track incoming and outgoing cash on cash flow statements.
Employs Multi-Currency Invoices
Govern exchange rates, adjustments and charges in several currencies.
Gives Analytical Tools
Leverage several analysis types to tack and arrange data to create in-depth reports.
Primary Features
Bank Transactions
Draft transactions and instantly download, perform, reconcile and match them to invoices. Search and filter potential transaction matches.
Invoicing
Track your owed company payments as you build and send invoices to your customers. Evaluate sent, unpaid and overdue invoices. Personalize bills with ideal colors, fonts, text and logos with templates. Duplicate past invoices for printing or direct client emailing.
Quotes and Estimates
Define fixed or rough quotes and estimate prices. Add default terms and conditions for quotes and estimates and convert them into invoices. It immediately computes the exact quote profit summaries.
Reporting
Browse from more than 20 financial files such as profit and loss, trial balance, balance sheet, general ledger and aging reports. You may personalize or mark particular reports as favorites and export them as CSV or PDF files.
Inventory Management
Add inventory products, non-inventory products and services to this system. Attach thorough information to merchandise, such as usual vendors, barcodes, locations, reorder points and low inventory reminders. Other module extensions include:
- Overseeing stock stages and fulfilling orders.
- Extending intricate information about your items and catalog.
- Implementing non-stock and service items for companies that don’t use inventory tracking.
- Developing adaptable pricing and discounts.
- Filtering multi-level categories.
- Pinpointing intel on how you sell merchandise and earn revenue.
Limitations
This accounting software for SME organizations comes with several features and advantages. It also has a few limitations, such as:
- Not supporting native payroll functionality.
- Lacking recurring bills and invoices.
- Lacking automatic invoice reminders.
Platform:
Company Size Suitability: S M L
NetSuite Financial Management
Last but not least, NetSuite Accounting is cloud-based accounting software for SME businesses. It integrates with NetSuite order management, inventory management, CRM and eCommerce platforms. It caters to several sectors, including advertising and digital marketing, media and publishing, consulting, IT, manufacturing and more.
A preview of NetSuite’s home dashboard.
Top Benefits
Implements Amortization Schedules
Conduct automatic expense depreciation schedules, and simplify amortizing prepaid fees and other protocols. Link this system with amortizing expense jobs and their completion percentages.
Utilizes Statistical Accounts
Stow away critical, non-financial information, including headcounts, floor spaces and common shares. Distribute financial operations throughout your company automatically and proportionately. Conduct several allocation schedules in particular sequences, and include net promoter scores and other non-financial KPIs in your dashboard.
Performs Multi-Currency Management
Browse and choose from more than 100 currencies, exchange rates and payment options. Implement real-time currency transitions and financial unifications for all global activity.
Offers Multi-Language Support
Use this system’s multi-language UI, and translate it into 19 languages, such as Chinese, Japanese, French, German, etc.
Leverages Audit and Compliance Reporting
Keep business practices aligned with international and security compliances while adapting to new frameworks. Access diverse, regional audit file formats. Save audit trails, execute built-in analytics and obtain logs and workflows. Obtain drilled-down, summarized files and underlying purchasing information for better transparency when adhering to local and regulatory requirements.
Primary Features
Tax Management
Leverage the tax engine to meet your needs. Employ the out-of-the-cloud, pre-configuration tax codes and localized reporting modules that support more than 50 countries. Perform instant tax calculations for more accurate and faster tax filing.
Use cross-border sales, online functionality and Intrastat reporting throughout all 27 European Union countries. Merge third-party tax solutions with this system via the Suite Tax API.
Invoice and Billing Management
Oversee billing operations, consolidate invoices, automate rating procedures and launch multi-pricing models. Implement customer-specific price plans with volume, tiered and flat pricing models. Support several subscription types from evergreen to traditional time-based models. Execute repetitive subscription billing management with auto-renewals.
The SuiteBilling extension produces standard pricing templates and customized scenarios to support customer-centric deal negotiations and contracts. Real-time reporting provides typical billing and financial data details, such as monthly recurring revenue, total contract value and customer churns.
Financial Reporting
Review roles-based dashboards and KPIs. Employ standard or personalized reports and access them practically anywhere on your web browser or mobile device. Use the report builder extension to build preferred financial and reporting statements.
Obtain global support for internalization and localization for several accounting books, fiscal and tax calendars, audit and compliance reporting, local format income statements, balance sheets and localized tax calculations.
Budget Management and Reporting
Track and manage budgets. Input account budgets on a single screen or duplicate them based on other budgets or actuals. Craft budgets in Excel or import them from CSV files. Establish and simultaneously document several resources for different criteria, such as typical vs. conservative or estimated.
General Ledger
Add tailored impact lines to transactions, including invoices or vendor bills, throughout one or multiple accounting books. Specify profit centers, funds, programs, product lines, standard subsidiaries, classes, departments, locations and other segments.
Leverage preset mapping tools for primary and secondary charts of accounts. Establish particular currencies and document all book-specific operations according to one business transaction from general ledgers, revenue recognition, expense depreciation, profit and loss distributions, and more.
Limitations
Although this SME accounting software offers numerous features and benefits, it has limitations. These drawbacks include:
- Occasional crashes.
- Lacks good budget forecasting and fixed asset tools.
- Lagging response times from support teams.
Platform:
Company Size Suitability: S M L
Next Steps
Growing your business means regularly staying on top of your financial information. Modern systems let you simplify, streamline and escape the tedious, time-sucking world of spreadsheets. Track all your info on user-friendly dashboards, link your software to bank accounts for easier synchronization and generate reports without headaches.
Accounting SME software has adaptive scalability options that align with all business needs. With the right software in place, you’ll spend less time managing your finances and more time growing your business. For more accounting systems, check out our in-depth comparison report.
What are some of your must-have features for SME software? Let us know in the comments!
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