Add Another Xero
Another cloud-based offering worth a look is Xero. The service focuses on the finance needs of companies with 0 to 50 employees and lets you see cash flow in real-time anytime, anywhere. Xero aims to shield non-accountants from accountant lingo: Instead of labels such as receivables and payables, it speaks of "money in" and "money out."
The solution provides online accounting, reporting, bank reconciliation, invoicing and bill payments, plus a handy built-in expense reporting tool. Xero can handle payroll chores, letting you track wage expenses and run payroll (or connect with your existing payroll service). Plus, daily bank feeds let you automatically import and code your bank transactions.
Xero's clean, modern design makes using it a pleasure -- and finding what you need easier. The Dashboard shows line graphs for your account balances and bar graphs for money coming in and money going out. This lets you see how the business is faring at a glance.
You can also populate an account "watch list" to keep tabs on important (or troublesome) accounts and see outstanding expense claims on the Dashboard. Also welcome are the add-ons and connectors to popular services that augment Xero’s core functionality to enable inventory management, CRM, point-of-sale tracking and more.
On the go? Log into m.xero.com from any mobile device to view accounts and follow up on outstanding invoices. iPhone and Android phone owners can also create and send invoices, submit expense claims, and add customer notes.
Figure 4: Xero’s customizable Dashboard gives you a quick overview of your business finances in real time.
The Xero service comes in three versions. Small -- aimed at independent contractors and small investment property owners -- costs $19 per month. That version supports five accounts payable and accounts receivable invoices per month and reconciliation of up to 20 bank statement lines per month. Medium ($29 per month) provides unlimited invoicing and bank reconciliation. Large ($39 per month) adds support for multiple currencies, with the capability to reconcile foreign currency accounts.
A Fresh Look at FreshBooks
FreshBooks was one of the early entrants in the cloud-services market, and is best known for its online billing service aimed at professional service providers and independent contractors. As the company points out, sending invoices out and tracking payments in is 90 percent of the accounting nut for a small business, and FreshBooks now offers the remaining 10 percent of features required of an entry-level accounting package.
As always, FreshBooks lets you handle billing chores quickly and easily. It can handle recurring invoices (say, billing monthly retainers) automatically, and you can choose to have it follow up with customers and clients when a bill is past due without further input from you. This combination of ease-of-use and automation not only saves you time, it means you’re less likely to put off your billing duties. Invoices go out sooner, and you have a better chance of getting paid faster.
The service also offers time-tracking to log billable hours, the capability to create and manage work estimates, expense tracking (and automated tracking for recurring expenses), and it lets you click a button to generate a report at tax time along with other critical reports that let you get a snapshot of your business.
If you need more functionality, FreshBooks offers integration add-ons for more than 70 software and service offerings including PayPal, ExpenseCloud, Basecamp, MailChimp and Salesforce.com. Since it’s an online service you can access FreshBooks from any Internet-connected computer, and the free mobile app lets you log billable hours, manage clients, send invoices and more straight from your iPhone. A free version of the FreshBooks lets you manage up to three clients, and for $19 a month you can manage up to 25 clients.
Another online tool aimed at sole proprietors is Outright. Specifically, the service is geared toward any entrepreneurs who file the Schedule C tax form, and Outright customers fall into two main categories: online sellers (product-based businesses) and freelancers (service-based businesses). The service automatically downloads and organizes all of your small business finance data -- bank accounts, credit card statements, eBay and PayPal transactions, FreshBooks entries and more -- into one place.
With all of your sales and expenses data in one location, Outright lets you easily see where you are making money (and not), who your best customers are, and identify your biggest expense and more. The service also automates your small-business accounting tasks by pulling all of your accounts into one place and organizing them intuitively, so you can quickly see your income and expenses. Conveniently, Outright organizes all of your business information into a Schedule C worksheet so that the data is ready to go for tax time with just one click.
The cloud service is available from any Internet-connected computer, and the company currently offers an iPhone app (an Android app is in development). The mobile apps let you see all of your account balances on the go, which lets you make decisions about jobs and purchases on the fly. You can also add and edit transactions from your mobile device.
The base service is free to use -- not just a free trial -- and the company offers Outright Plus ($9.95 per month) that adds advanced features such as annual, quarterly and sales tax tracking and reporting.