Introduction

A 2022 SkyNova survey found that 47% of startups failed due to poor finances and a lack of investor support. Accounting is essential for operating a startup as it ensures your business does not run out of money. 

Accounting is often perceived as a dull and time-consuming activity despite its importance. Furthermore, not all business owners have financial expertise. Technology helps you track your finances without tedious manual bookkeeping and old-school accounting methods. 

Effective accounting with specialised software helps your startup maintain good financial health and attract investors. Accounting software generates instant financial reports covering key areas needed to make crucial business decisions.

This article explores the top 3 accounting software options for Singaporean startups.

The Role of Accounting Software in Startups

1. Simplify Tasks

Accounting involves tracking changes in assets, expenses, revenue, and liabilities. Manually summarising this information into a general ledger is time-consuming and complex. Accounting software simplifies the consolidation process by updating transactions in real-time. Your financial team can access accurate and real-time financial data at any time.

2. Save Time

Time and effort are needed to create quarterly and annual financial reports. It is unfeasible for small startups, which often have lean accounting teams. Accounting software records all financial transactions systematically and consistently, saving time manually entering data. You can access updated financial records anytime and easily retrieve reports, profit/loss statements, and balance sheets from the system. 

3. Reduce Errors

Manual data entry has a high possibility of human error due to the monotonous and repetitive nature of the task. It can lead to duplicate transactions, wrong formulas, or incorrect figures. Such mistakes will affect your startup’s financial decisions and investor confidence. Accounting software accurately automates manual and repetitive data entry work, significantly reducing errors.

Accounting software is helpful for invoicing, payroll, tax return preparation, and financial reporting. These processes are straightforward and repetitive, often using standard calculation and recording formulas. 

Features to Consider When Choosing Accounting Software

1. Functionality

Does the software meet your business needs?
List your business needs and highlight areas you need help with, e.g., tracking project profitability, automatic payment reminders, or integrating your accounting system with eCommerce platforms. Some accounting software companies offer industry-specific packages for specialised needs.

2. User Interface

• Do you prefer cloud or desktop-based software?
  You can access your accounts anywhere with cloud-based software. However, if you have team members working remotely in places with a poor or unstable internet connection, it may be better to choose desktop-based software.
• Is the software easy to use?
  Choose software with a user-friendly interface and clear instructions. Read reviews, watch tutorials, or try demos to test the software’s usability.
  

3. Scalability

• Is the software scalable?
  Your accounting software should be able to keep up with larger transaction volumes as your business develops and expands. Scalable software helps you save money because you won’t need to replace it in the future.
  

4. Integrations

• Is the software compatible with your business applications?
  Many top accounting software systems cater to the Western market, so check that your software allows local system integrations. It should be compatible with your business’s existing external applications. Some examples are shipping systems, bank software, eCommerce sites, payment applications, and payroll software.
  

5. User Support

• How comprehensive is the user support?
  Before purchasing software, read up on the type of user support and training provided.
  

6. Pricing

• Is it affordable for your business?
  Price is a key concern for many startups. Consider your business’s present and future needs when deciding which package to purchase.
  

7. Security

• How is your data protected? Your accounting software should have robust security features to protect sensitive business and customer information.

Review of Top Accounting Software Options

1) Quickbooks

Quickbooks by Intuit automates core accounting functions for small businesses, such as expense tracking, professional invoice creation, inventory management, cash flow management, and report generation.

Benefits

• Offers custom invoicing, IRAS tax filing, GST tax tracking, multi-currency support, and more. 
• Offers the Productivity Solutions Grant (PSG), a form of financial support for Quickbooks setup and installation for small Singaporean companies.
• Integrates with many popular eCommerce, marketing, and sales platforms such as Shopify, Etsy, WooCommerce, eBay, and Mailchimp.
• Cloud-based and accessible via a mobile app.

Downsides

• Difficult to contact customer service.
• Slightly complex software navigation for inexperienced or new users.

Pricing

• 13 to 27 SGD per month, depending on the package.

User Reviews

• Suitable for small businesses.
• Handles a full range of accounting processes effectively.
• Excellent invoice handling and payment system.

2) Xero

Xero automates bookkeeping and accounting functions like invoicing, payroll, bill payments, expense claims, and bank reconciliation. 

Benefits

• Offers GST automation, multi-currency handling, quotation generation, file storage, online invoicing, and more. 
• User-friendly interface.
• Convenient expense and receipt tracker.
• Compatible with global digital payment systems like PayPal.

Downsides

• Bank reconciliation issues with certain banking portals, e.g., disconnected bank feed and limited banking portal integration options.

Pricing

• 35 to 72 SGD per month, depending on the package.

User Reviews

• Good customer support.
• Convenient file storage for attachments sets it apart from other accounting software.
• Comprehensive layout view to view financial information at a glance.

3) Zoho Books

Zoho Books provides end-to-end accounting for small and medium-sized businesses and automates various accounting tasks, such as order detail logging, bill generation, and expense tracking. 

Benefits

• Offers sales tax and GST automation, multi-currency handling, inventory valuation, bank account consolidation, project tracking, and more. 
• Compatible with global digital payment systems like PayPal and Stripe.
• Has a free plan option for small businesses.
• Accessible via a mobile app.

Downsides

• Limited options for direct payroll software integration.
• Limited customization options for fonts, logos, and forms.
• Not compatible with DBS Ideal Corporate banking portal.

Pricing

• Free plan for small businesses earning below 50K USD (around 67K SGD) annually.
• 5 paid tiers ranging from 10 to 200 USD (about 13 to 267 SGD) per organisation, per month.

User Reviews

• Intuitive and visually pleasing website user interface.
• Range of packages for new and small startups.

3 Tips for Implementing A New Accounting Software

Staff Training

• Ensure your trainers understand the software before teaching anyone else. Consider engaging technical experts to help during training sessions.
• Provide incentives to encourage employees to enroll themselves in training courses.
• Decide the right training format. Research shows that theoretical training is usually insufficient for complete information retention. We recommend a mixture of lectures and hands-on tutorials.

Data Migration

• Set a final cut-off date to complete data migration and begin using the new software.
• Conduct an IT infrastructure audit to ensure your IT system can handle the new software.
• Back up your data before transferring.

Updating Software

• Choose the right time. Avoid installing software updates during peak periods, such as near project deadlines.
• Test new software in a virtual sandbox environment to ensure it integrates with your existing systems, applications, and tools.

Conclusion

Investing in a good accounting software for your startup saves time, costs and reduces errors. It streamlines your bookkeeping and accounting processes, laying a strong financial foundation for your business to develop and grow. 

Aside from considering the points mentioned in this blog, you should also carefully assess your business’s unique needs, such as industry or country-specific requirements, before choosing accounting softwares.