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Types of Accounting Software in Canada

Edited by Indeed Employer Content Team

From accounts payable to payroll solutions, accounting software has become the norm for small businesses in Canada. In this article, we take a look at some of the options that are available.

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Accounting software for small businesses in Canada

Many small businesses in Canada choose free accounting software to create invoices, perform payroll, track accounts payable, automate transactions, convert currency, and more. Reputable and secure free accounting software can even assist you when it comes to filing your taxes with the Canada Revenue Agency. In fact, most SMBs in Canada today use some form of accounting software, whether it’s free or paid. From programs to apps, they’re designed with the user in mind to streamline and assist you with all your business financials. Low-cost and free small business accounting software is popular with many small and medium-sized businesses in Canada. Its affordability and functionality appeals to everyone, from those with basic computer skills to the tech savvy. Not only do they provide easy-to-use modules, from accounts payable/receivable through payroll and balances, they’re also a one-stop shop for financial information. Canadian businesses generally acquire small business accounting software as stand-alone apps, online services, or software packages. Other SMBs may develop their own accounting software. Here’s what you need to know to make the best decision for you and your business.

Advantages of free accounting software

If you are concerned that you “get what you pay for” when it comes to free accounting software applications, the good news is, you actually do get a number of helpful services. Getting started with small business accounting software does not have to be expensive. There are many affordable and even no-cost options that are safe and secure. Here are some of the benefits to choosing free accounting software:

  • an excellent starting point for a new business
  • saves money on hiring a bookkeeper
  • you can input your own transactions
  • increase accuracy and productivity
  • decrease late or non-payment of accounts receivable
  • instantly send electronic quotes, invoices, and payment reminders
  • consolidate financials
  • processing payments directly
  • helps make informed data-driven decisions
  • handles all the basics
  • many free software accounting options in Canada

Disadvantages of free accounting software

If your small business requires more complex functionality, a paid version of your accounting software may be better suited to your needs. When it comes to considering free accounting software in Canada, it’s important to weigh your options. The “free” aspect might sound enticing, but you may decide to go with a paid account in the end. Here are some of the potential downsides to consider about free accounting software for small businesses in Canada:

  • higher payment processing costs (e.g., they may take a percentage of the invoice amount)
  • fewer options and features compared to paid versions
  • less personalization to match your business’s brand
  • little to no customization
  • potentially advertising of the software or app on your accounting materials
  • limited scope of insights or granular metrics
  • less sophisticated (e.g., likely no inventory tracking or analyses)
  • more generalized and not specifically tailored to your particular industry

Paid accounting software considerations

As free accounting software offers numerous advantages, it can be a good choice if your small business is a start-up or if you’re self-employed. Paying for an invoicing app or accounting software may be wasteful if you’re just using it for basic accounting. However, as your business grows, you may find that a more customized approach would be better. For example, if you’re starting to do business internationally but your small business accounting software only works with the Canadian dollar, a more enhanced accounting program that incorporates foreign currencies may help.If you’re operating more than one company, you’ll likely need more advanced capabilities to accommodate multiple businesses. Before you select an accounting program, look at your business objectives and see if what the software offers can grow alongside your company’s growth. It’s an advantage if it allows you to easily upgrade once you’re further down the road.
After all, your SMB accounting needs may change and require services beyond the software you start out using. This is where an enterprise resource planning (ERP) system can be useful. Vendor names you may be familiar with include Epicure, Oracle Enterprise Resource Planning, Sage, SAP, and Netsuite*. This type of specialized accounting software comes with a heftier price tag, so start-ups and less-established SMBs tend to prefer free or low-cost accounting software.

Free accounting software options in Canada

Here are 10 popular accounting software applications in Canada with options for free use, listed alphabetically*:

  • AccountEdge
  • Avantage Progression SE
  • Dynacom Accounting SMB Edition
  • FreshBooks
  • Kashoo
  • Quickbooks Online
  • Sage Business Cloud Accounting
  • Wave
  • Xero
  • ZipBooks

These are just a few examples and a starting point for you to explore more.

Managing your business accounting needs

Whether you’re a start-up, small business, or self-employed, you’re bound to want to see your business grow and thrive. Small business accounting software has revolutionized time and budget management, so it makes good business sense to take advantage of it. You may not require something as sophisticated as an ERP system right now, as an augmented workflow may introduce unnecessary complexities. That said, as your business grows, your needs are likely to expand, too. Ultimately, free accounting software is an excellent place to start as you foray into small business accounting. However, it pays off to fully consider your needs and periodically re-assess them—as your finances become more complex or diversified, your accounting software should, too. Related article: 10 Steps to Starting a Business *Please note that none of the companies mentioned in this article are affiliated with Indeed.

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