Pricing Guide For Accounting Software
Accounting software refers to the tools used to manage, process, and record the financial data for business organizations. Pricing of accounting software can be a major factor affecting your purchase decision. With so many options in accounting tools available with different features, integrations, and deployment methods, it might be difficult to select one which is worth its price. To help you mitigate this easily, GoodFirms has done extensive research by analyzing some of the top accounting software available today in the industry. This study is aimed at helping you make fast and informed decisions on investing in the right accounting tool.
Global Accounting Software Market Overview
Back in 2019, a study indicated that the global accounting software market, which was nearing 12.0 billion then, will rise to US$19.59 billion by 2025.
Interestingly, the Global Accounting Software Market is likely to experience the growth of 8.5% CAGR (Compounded Annual Growth Rate) from 2020 to 2025. One of the most prominent changes the financial industry has faced over the past two decades is the accelerating adoption of cloud-based accounting software solutions.
Global Accounting Software Market - Regional Overview
Though the largest market of accounting software is in North America, the fastest-growing market from 2019 to 2025 is likely to be the Asia-Pacific region.
The growth of the accounting software market in the Asia-Pacific region can be due to some factors like increased use of mobile applications and higher adoption of modern technologies. Moreover, the emergence of small businesses and rising investment in the cloud and SaaS market is likely to affect the growth of the accounting software positively in this region.
China is likely to be the highest spender on cloud-based accounting solutions. India is also leading in terms of adopting new technologies in accounting software due to the GST scheme introduced in July 2017.
Global Consumption of Accounting Software
Global Key Players In Accounting Software Market
GoodFirms Survey On Accounting Software Usage
GoodFirms recently conducted a survey to understand the global consumption of accounting software. Renowned companies from different countries and sectors participated in this survey. Thanks to the research partners to cooperate with us even in this pandemic situation due to COVID-19.
The survey helped GoodFirms arrive at the fact that 81% of respondents use accounting software to manage their finances within their business organizations. The other highly used tools were project management software and CRM.
After a thorough analysis, we have determined the popularity of different accounting software based on their global subscribers (in millions) as given below -
Accounting Software Pricing Models
The vendors of the Accounting tools follow certain pricing models. Let’s have a look at each pricing model and its benefits.
The companies that prefer to host the accounting software system on their own server, usually go for a perpetual licensing pricing model. Perpetual licensing can prove to be an ideal option for large companies having an infrastructure that includes the required server, hardware, and other required IT resources. This type of pricing model is a one-time investment. That means you are paying for the license that would last till the software's lifespan or till you plan to change the software. In perpetual licensing, you need to consider the cost of software maintenance, IT support, deployment, etc., separately.
Project-Based Pricing Models
Many companies prefer to invest in an in-house accounting system or outsource the project to software development companies. If the accounting software system is being developed in-house, there may be various costs associated with it, like paying for the hardware and software required to build the software, remuneration of the entire team involved in building the software, and other overheads of the organization. On the other hand, if the companies prefer to outsource the entire accounting software development project, then there can be hourly/monthly charges for the developers or the overall project building cost quoted by the software development company. In this case, the investing companies will have full control over the project and get a customized solution exactly suiting their business model.
Subscription Pricing Model
The small and medium business organizations not having enough IT infrastructure, including server, hardware, and other applications, prefer to go with the subscription pricing packages offered by the best accounting software vendors. The subscription cost of the accounting tool can also include training, support, and maintenance expenses and thus prove to be quite cost-effective for the buyers. Below are some subscription pricing options -
(i) Monthly Subscription Plan - The accounting system vendors allow the businesses to purchase the software by paying monthly for the software. This is beneficial if you need to check that the accounting software system works as per your business logic, and services offered by the software vendor are of high standards. For example, the price of One Up accounting system starts from $9/month to $169/month, depending on its pricing plan you select.
(ii) Yearly Subscription Plan - Similar to the monthly subscription plan, the software vendors also provide yearly subscription plans to the businesses allowing them to pay yearly for the software. Many times paying every month for the software you are going to use for the long-term becomes a hassle. So, in that case, yearly subscription plans can fit into the budget overall. For example, Koinly is an accounting tool offering yearly subscription plans starting from $79 to $399, depending on the features preferred by the investing companies.
(iii) One-Time Subscription - Several accounting system vendors provide one-time subscription pricing models to the companies that prefer to own the software for a lifetime. If you are sure about the software and the quality of the services, you can go for a one-time subscription and free yourself from the hassle of paying monthly and yearly. For example, Ledger Lite - the World's best accounting software, can be purchased at just $50 one-time charges.
Features Based Pricing Models
Many accounting solutions are so versatile that they offer extra features that are required by large enterprises, but small and medium-sized businesses are never going to use them. For that purpose, the accounting system vendors facilitate the buyers to choose the pricing model based on the features they require. For example, Zip Books is one of the top accounting software systems that offer three different pricing packages (Smarter, Sophisticated, Accountant) based on the features, as given below -
Freemium / Free Trial Plans
Many accounting tools offer freemium or free trial options wherein you can use the limited features of the accounting system for a specific period. This can help you in checking if the accounting software system you are planning to purchase is compatible with your business requirements or not before investing. For example, Banana accounting software includes a free version that allows only 70 transactions in the transaction table, 20 rows in the budget table, and prints with a watermark on it. Moreover, Invoice Meister provides a 30 days free trial option allowing you to use all the features but for only 30 days.
Free Accounting Software
If your budget is limited and not planning to invest in an accounting software system right now, you can also go for free accounting software. One of the best small business accounting software is - Wave. It is cloud-based accounting software with versatile features. If you are looking for free accounting software that you can customize as per your business logic, you can consider the best free and open source accounting software. Though there are many benefits of using free and open source accounting software, choosing this option may require paying remuneration to the technical staff and investing in IT infrastructure to make it work in alignment with your business processes.
What Are The Other Costs Associated With The Accounting Software?
You can easily know the cost of the top accounting software by going through the packages on the vendors' website or asking them for a quote. The price mentioned by the vendor would probably include the licensing fee or subscription charges of the online accounting software. But, there are some costs associated with the accounting system that might not be included in the quote or on any accounting software vendor's website. You need to consider these costs while planning the investment budget for your online accounting software for business. Even if you are opting for free and open source accounting software, you need to count on these costs to get a clear picture of exactly how much you would be investing in your accounting system.
Some of the top accounting software can be downloaded and run on any desktop or laptop computer. But some advanced accounting tools may require specific hardware and software to run on your computer. Thus, you need to check whether the online accounting software you are buying requires spending on a specific operating system or upgrading hardware to make it work successfully on your devices.
Most of the accounting system vendors provide free training, and there are few accounting tools that come with user guides. Few accounting solutions are user-friendly and intuitive. It is important that you check these aspects before investing in one.
You may find ready-made accounting tools that just fit into your business requirements. But, if your requirements relating to your accounting system are specific, you need to check whether the accounting tool you are purchasing can be customized or not, and if yes, it is wiser to check the additional costs involved in customization.
You need to regularly maintain the hardware and software that supports the accounting system you are purchasing so that the process you are following doesn't get obsolete. Many of the online accounting software vendors may not mention the maintenance costs in their quote but can charge you for later on after the purchase. Thus, while buying, you need to clarify with your accounting system vendor about the maintenance costs they are possibly going to charge in the future.
To make your online accounting system work for your consistently growing business, you need to upgrade it at some point. There are many accounting systems available which require upgrading at regular intervals, to take advantage of the latest functionality it is offering. But, while purchasing an accounting system, you need to check with the vendor whether they charge for the upgrades or not if they have not mentioned this aspect in their quote.
After purchasing the accounting tool, you may encounter various problems while using it, and that time you would require quick and relevant support. Most of the best accounting software vendors provide support to the users of the software but charge for that service. You need to consider the support costs too in that case.
Accounting Software Pricing Plans
Most of the accounting software vendors like Zoho Books, QuickBooks Online, Sage, FreshBooks, etc. provide different pricing plans so that the companies can choose the suitable one depending on their budget and features they require.
GoodFirms conducted a survey to know the most preferable pricing package among the businesses and the results are as follows -
The Key Takeaways
As per the above survey conducted by GoodFirms -
33.3% of the respondents prefer basic pricing package
16.7% of the respondents prefer medium pricing package
50% of the respondents prefer professional pricing package
The above figures say that the professional pricing package is the most demanded one due to the high-end features included in it. Definitely the basic and medium pricing packages are popular among the startups and small-sized businesses that function with a limited budget.
To further clarify the pricing plans offered by the accounting system vendors, we have listed the basic details of the top 5 accounting software for business and their pricing plans as given below -
Pricing Plans of the Top 5 Accounting Software
Xero founded in 2006, is a Software-as-a-service technology company based in New Zealand that offers cloud-based accounting software for small to medium-sized businesses. Besides New Zealand and Australia, the company operates in the UK, USA, Canada, Singapore, Hong Kong, and South Africa.
The cloud accounting software by Xero is made available for a monthly subscription cost that can range from $9-$60 based on the features required by the users. It allows users to operate their business from anywhere using any device. It includes powerful collaboration features allowing small businesses to establish trusted relationships with their clients and ensure exponential growth. Using Xero, the business owners get real-time visibility over their financial position in a simple, smart, and secure manner.
Xero has been reported to become the first cloud accounting business to exceed one million subscribers in the Australia & New Zealand market. At present, it has more than two million subscribers globally.
Xero Accounting Software Pricing Analysis - Plan Wise
Just check these customer reviews to know more about Xero.
QuickBooks Online is a cloud-based software that was introduced by Intuit in 2014 to cater to small to medium-sized businesses. Different versions of this software are available for regions like North America, South America, Europe, Asia Pacific, Middle East, and Africa depending on their specific taxation policies.
Being an integrated financial software, QuickBooks Online is well known for its smarter tools and timely support they provide to their clients. It helps you in managing and organizing your incomes, expenses, and all the financial processes within your organization from a centralized location. Its pricing model is based on a monthly subscription plan and can cost you from $8-$45 depending on the functionality you require.
At present, QuickBooks Online is serving around 4.5 million global subscribers, with an increase of 1.1 million subscribers in 2019.
QuickBooks Online Accounting Software Pricing Analysis - Plan Wise
Do you want to know more about QuickBooks Online? Just go through its customer reviews.
#3 Zoho Books
Zoho Books is one of the best products of Zoho (one of the leading software providers having around 13 million users worldwide). Zoho Books is conveniently integrated with other Zoho apps, which means it can help you in other business processes as well.
To make it simple, Zoho Books can provide you with clear visibility over the financial health of your business without any limitations, helping you to make smarter decisions for the future. Zoho Books is available at a monthly subscription of $9-$29, depending on the features you require and the number of users. It is considered as the best small business accounting software as it is not only affordable, but also includes time-saving features helping you to manage accounts receivable/payable, inventory, and banking.
Zoho Books is extremely popular among users based in the US, UK, India, Canada, France, Spain, Netherlands, Germany, Australia, and Ireland. Besides English, it can support other languages like Simplified Chinese, Dutch, French, German, Italian, Japanese, Portuguese, Spanish, and Swedish.
Zoho Books Online Accounting Software Pricing Analysis - Plan Wise
Just go through the customer reviews about Zoho Books to know more about this accounting software.
Sage Business Cloud Accounting is a simple online accounting and payroll services tool available for users based in countries like US, UK, Australia, UAE, India, Ireland, Deutschland, and many more. It has been proven to be consistently popular among small business entrepreneurs and freelancers because of its affordable price and versatile functionality.
Sage Business Accounting Software helps in managing all the processes and documentation required in business like invoices, statements, estimates, and quotations. It can integrate with several banks and thus allows users to manage their payment transactions automatically. It enables users to stay updated with real-time information about their cash flow and pending payments helping them to make fast and informed decisions.
There are versions of Sage available; as a result, the users can use the software from Windows, Mac, Android, and iOS devices. Moreover, it also works on web-based browsers for users' convenience. The pricing package of Sage starts from $10 to $25, depending on the accounting features required by your business organization.
Sage Business Cloud Accounting Software Pricing Analysis - Plan Wise
FreshBooks is a cloud accounting software owned by 2ndsite Inc. It is easy to use software that allows you to manage the finances of your organization in a secure manner. The versions of FreshBooks are available for users in 120 countries. At present, the users can change the language to English, Danish, Dutch, French, German, Greek, Italian, Portuguese, Romanian, Spanish, and Swedish. Moreover, they can also change their currencies, set up taxation policies and compliance requirements matching to countries like the US, Canada, UK, Europe, etc.
FreshBooks helps in streamlining and automating monotonous jobs so that you can focus on strategic activities contributing to the growth of your business. Starting from invoice reminders to collecting payments, FreshBooks can handle all your invoicing and accounting processes. Above all, it can help you in analyzing the current financial situation of your business, enabling you to make smart and informed decisions.
There are around 24 million FreshBooks subscribers located worldwide. Its price starts from $6-$20, and the most significant driving forces behind these pricing packages are billable clients, number of users, and features. FreshBooks also provides the option of custom pricing if you have more than 500 billable clients and require additional features.
FreshBooks Accounting Software Pricing Analysis - Plan Wise
Just go through these customer reviews to know more about FreshBooks.
The below-mentioned comparison chart can help you in comparing the prices of these accounting solutions at a glance and making the smart purchase decision.
Price Comparison Chart of the Top 5 Accounting Software
What Is Your Business Size?
This is an important question to be answered while choosing an accounting software pricing package. Below are the solutions -
Are you a small business owner or a freelancer?
If yes, you require time-saving features in your small business accounting software at an affordable price. Basic monthly subscription plans requiring minimum investment would suit your budget and requirements both.
Do you own a medium-sized business?
If yes, you require a scalable accounting software with robust features. Intermediate pricing plans that are within your budget but also have scope to upgrade as and when your business grows is something you need to opt for.
Do you own a large scale enterprise?
If yes, you would require accounting software with advanced functionality and high-end security features. You need to go for enterprise plans or customized plans offered by accounting software vendors.
Questions You Need To Ask Your Accounting Software Vendor
What would be the total cost of the accounting system, including other costs relating to deployment, training, support, etc.?
Are there any other hidden costs associated with the accounting tool?
Do you renew the subscription of the online accounting software automatically without the client’s approval?
Is your accounting software product compliant with the Government laws and regulations?
To summarize, the below-mentioned are the determinants that you need to consider while selecting an accounting software pricing model.
Accounting Software Pricing Determinants
You can also go through the buyers’ guide to accounting software to get complete guidelines on how to select the best accounting software suiting your business requirements.
The Key Takeaways
Across many key financial operations, automation and process improvement can reduce costs by 35-46% (pwc.com.au)
55% of accountants expect the development of intelligent automated accounting systems to have the greatest impact on their profession over the next 3 to 10 years. (ACCA Study)
37% of SMB owners think that accountancy is becoming more automated and that they can complete a range of tasks themselves. (Xero.com)
82% of the respondents of a survey say that clients expect better services and resources from accountants at present than they did five years ago. (Sage.com)
The above facts show that accounting tools can have a positive impact on the financial health of your organization and can prepare you for a challenging future. Moreover, accounting solutions are available at as low as only $6/month. Even small businesses with limitations in their budget can purchase accounting systems. Businesses that use manual or incompetent accounting systems may risk lost or damaged financial records, which can prove to be expensive comparing to investing in an accounting system.
There is an accounting application available for every budget. Still, we understand that investing in the right accounting tool is critical. So, for better decision making, you can go through our comprehensive list of the top accounting software. This list also includes in-depth analysis relevant to the features, pricing options, screenshots, and authentic users' reviews for each accounting system.
Also, you can let us know your views about the prices of the accounting tools & applications available in the market these days in the comments section below
If you have used any of the accounting software for the business mentioned above, please leave your valuable feedback here and stay tuned as we keep on updating our software lists regularly.
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