A Comprehensive Comparison of Bookkeeping Software for Canadian Businesses

Managing finances is a critical aspect of running a successful business. For small and medium-sized businesses in Canada, choosing the right bookkeeping software can streamline financial processes, enhance accuracy, and provide valuable insights.

In this article, we’ll explore and compare different bookkeeping software options available in Canada to help you make an informed decision.

QuickBooks:

QuickBooks Online is a popular cloud-based bookkeeping software widely used by businesses of all sizes. Intuit QuickBooks Online is, by far, the most widely recognized accounting tool on the market.

It offers a range of features, including expense tracking, invoicing, bank reconciliation, and financial reporting. QuickBooks’ other features include a centralized dashboard, online support, inventory tracking, mobile app, multi-user access, report customization, sales tax management, etc. On the other side, QuickBooks lack industry-specific features and may slow down during peak times. Also, because of the wide range of functionality, it takes time to get familiar with all the features.

QuickBooks Online integrates with numerous third-party applications and offers scalable plans to accommodate the needs of medium-sized businesses. It can also process ETF and credit card payments.

QuickBooks is available in both online and desktop versions. QuickBooks can be used for both service and retail businesses. QuickBooks Online and QuickBooks Desktop both offer comprehensive payroll processing and the direct deposit feature of QuickBooks Online is an absolute timesaver.

Xero:

Xero is a cloud-based bookkeeping software that caters to the needs of small and medium-sized businesses. Xero was first launched in Canada in 2018 and has been gaining popularity ever since.
It offers features like bank reconciliation, invoicing, expense tracking, inventory management, and multi-currency support. Xero integrates with various business apps and provides real-time collaboration with your accountant or bookkeeper. Xero has a user and mobile-friendly interface.
Xero offers payment processing and limited payroll processing. For payroll, Xero integrates with other payroll software.

Xero is available cloud-based only. Xero prices are a bit more economical as compared to QuickBooks Online.

Sage Accounting:

Sage Accounting (formerly known as Simply Accounting) is a robust bookkeeping software designed specifically for small and medium-sized businesses. Sage provides comprehensive features such as accounts payable and receivable, inventory management, payroll processing, and financial analysis. Sage 50cloud Accounting offers a hybrid solution with cloud capabilities and offline access.

Sage 50 and Sage 300 are the two most popular products Sage Software makes. Sage 50 is often more appropriate for small businesses, while Sage 300 is a better fit for larger enterprises (100+ employees).

FreshBooks:

FreshBooks is a user-friendly bookkeeping software designed for small to medium sized service-based businesses. Fresh focuses on invoicing, expense tracking, time tracking, and project management. FreshBooks also offers integration options and enables easy communication with clients through the platform.

FreshBooks was originally created as an online invoicing service for IT professionals. It offers limited accounting features and limits on user and billable clients. FreshBooks also have limited access on mobile and lacks reporting features.

FreshBooks has no built-in payroll processing but offers integration with the payroll platform Gusto. FreshBooks can process credit card and EFT payments. FreshBooks is only available on cloud based.

Wave:

Wave is a free cloud-based bookkeeping software ideal for businesses on a tight budget as it is free. Wave provides core features like invoicing, expense tracking, bank reconciliation, and basic reporting. Wave also offers paid add-ons for payroll processing and payment processing. Wave is only available on the cloud. Wave offers no new third-party integrations (only those already in place) and there is limited customer support (email only for free services).

Things to consider when selecting accounting software:

When choosing bookkeeping software, it’s important to consider the following factors:

1. Features: Assess the software’s features and compare them to your business requirements, such as invoicing, expense tracking, inventory management, and payroll processing.
2. Scalability: Ensure that the software can handle your business’s growth and increase transaction volume effectively.
3. Integration: Determine if the software seamlessly integrates with other tools and apps your business relies on, like payment processors or e-commerce platforms.
4. Ease of Use: Consider the user interface and how intuitive the software is to use. Look for platforms that are user-friendly and don’t require extensive accounting knowledge.
5. Cost: Evaluate the pricing structure, including monthly subscriptions, add-on fees, and support costs. Find a balance between the software’s features and your budget limitations.

I have selected a great accounting software; do I still need a chartered processional accountant (CPA)?

While accounting software can enhance financial efficiency, it cannot replace the need for a chartered accountant for bookkeeping. Here’s why:

Software limitations:

Accounting apps simplify cost management and automate certain tasks like invoicing, but they do not handle overall account management or bookkeeping. Tax responsibilities still require the expertise of an accountant.

End-of-year accounts:

Although AI offers automation and may offer more solutions in the future, current apps cannot fully organize and file end-of-year company accounts. A CPA is essential for this task.

Tax obligations:

Accounting software can streamline routine transaction processing both for personal and business accounts, but a specialized accountant (CPA) is needed for accurate preparation, organization, and submission of tax returns and payments.

Personalized advice:

A CPA offers tailored business advice, including minimizing overheads, improving profit margins, and supporting business growth, which software cannot provide.

Compliance with law:

A CPA possesses in-depth knowledge of accounting tax regulations and ensures compliance. They can also alert and prepare businesses for any tax changes that may impact them.

In summary, while accounting software offers convenience, an experience CPA provides vital personalized services, expertise in tax regulations, and the necessary human touch for effective financial management.

Conclusion:

Selecting the right bookkeeping software for a small and medium-sized Canadian business is crucial for efficient financial management. Assess your business needs, compare the features, consider scalability, and evaluate the costs to make an informed decision. QuickBooks Online, Sage, Xero, FreshBooks, and Wave are reputable options worth considering. Most offer free trials to give you a taste of the software.

However, it’s important to note that while good software offers efficiencies and convenience, it cannot entirely replace the expertise of a knowledgeable and experienced CPA in navigating the complex realms of accounting and tax.

If you are unsure about which accounting software would be best for your business or if you currently have a software but are struggling with your bookkeeping and accounting tasks, we recommend reaching out to the experts at Source Accounting Professional Corporation. Our team of professionals can assist you and alleviate your burden, giving you more time to concentrate on your core business activities. We are a reputable accounting firm based in the Greater Toronto Area (GTA) and Mississauga, as evidenced by our consistently high 5-star client ratings. Call us at 647-930-8130.

Disclaimer: The above contents are provided for general guidance only, based on information believed to be accurate and complete, but we cannot guarantee its accuracy or completeness. It does not provide legal advice, nor can it or should it be relied upon. Please contact/consult a qualified tax professional specific to your case.