Cloud accounting software: a buyer's guide

Cloud accounting software gives you accounting in real time – instant, live updates of your business' financial position. There are clear, quantifiable benefits in moving from a desktop program to the cloud, as shown by common features to all the programs.

Banks send an automatic, daily feed of transactions to most cloud accounting programs which cuts down on data entry and the hassle of downloading and uploading bank statements. It also makes reconciling your accounts a trivial affair that can be done in minutes.

Another common feature is a dashboard that shows at a glance key metrics such as profit and loss, accounts receivable and accounts payable and expense claims. Because they are internet-based, cloud accounting programs can share contacts and financial data with other cloud applications such as customer relationship managers, productivity suites like Google Apps and Office 365, and project management tools.

In short, accounting in the cloud gives small business owners a lot more information about the financial health of their businesses which makes it easier to work out how to increase revenue and profitability.

There are seven players in the Australasian cloud accounting market. This guide, written by cloud analyst Ben Kepes of Diversity Limited, is intended to give an overview of each program's strengths and weaknesses and to suggest the type of business to which it is best suited.

The seven programs are CashBooks Online, FreshBooks, JCurve, MYOB, QuickBooks Hosted, Saasu and Xero.

CashBookOnline

CashBookOnline is a lightweight program that was launched in July by Reckon Software. Hosted in a data centre in Sydney, CashBook is primarily designed for the simple recording and tracking of payments and receipts. CashBook does not include reporting or budgeting tools and is not integrated with other applications.

CashBook currently supports live bank feeds from ANZ and St George. Other bank feeds can be uploaded to the application manually.

• Cost: $198 per year.
• Strengths: Simplicity, price.
• Weaknesses: Very limited functionality, no integrations with third party apps, automatic bank feeds from only two banks.
• Integrations: None as yet.
• Who should buy it: Micro business owners and sole traders.

FreshBooks

Despite not being an accounting solution per se, FreshBooks provides much of the financial functionality that freelancers need. With two million customers around the world, FreshBooks has a massive user base which it uses to good effect. FreshBooks provides industry benchmarking reports that are very valuable as a self-assessment tool.

FreshBooks has 1,500 accountant partners around the world but as it is not an accounting application as such it tends to require much less set-up than other programs reviewed here. FreshBooks has secure backups of all customer data and a backup data centre. The company has a status page where customers can find out about any outages.

FreshBooks is integrated with over 80 different services and applications. These applications span a broad range from customer support to CRM and accounting.

• Cost: FreshBooks has a free version with paid plans starting at US$19.95 per month. FreshBooks data is located in the US and Canada.
• Strengths: Large number of integrations with other applications, ability to obtain benchmarking report comparing business performance with other similar operations.
• Weaknesses: FreshBooks is primarily an invoicing and expense tracking application. Some SMEs might be looking for a fully featured accounting solution instead.
• Integrations: Integrated with over 80 different applications – mobile, project management, customer support, CRM, accounting and many others.
• Who should buy it: Small businesses who invoice their clients.

JCurve

Built on top of the NetSuite enterprise financial engine, JCurve is an ideal solution for businesses poised to outgrow other SMB solutions. JCurve offers an extensive product line that allows customers to scale the size and complexity of their operation over time.

JCurve is generally sold through accounting or IT partners who are able to assist businesses with the move from other accounting solutions.

By using the NetSuite platform, JCurve enjoys the efficiencies of NetSuite’s global footprint. Data is stored in a West Coast US data centre and is backed up to an East Coast facility. JCurve also offers customers the benefits of the NetSuite ecosystem with the large number of applications in the NetSuite application directory available to JCurve customers.

• Cost: Between $49 and $125 per month. Extra features include payroll ($600/annum/company) and user support (25% of the licence fee).
• Strengths: Payroll, inventory, e-commerce, CRM. High-growth businesses can increase features and flexibility by adding more modules. A large number of third-party applications via the application store.
• Weaknesses: No automatic bank feeds, starting price higher than other SME applications.
• Integrations: JCurve is integrated via the NetSuite engine to a host of third-party applications.
• Who should buy it: Small and mid-sized businesses between 1 and 100 employees who are focused on growth.