Accounting software have been introduced into the Nigerian financial and business industry since the late 1980s and early 1990s, this period marked the beginning of a new dawn on how financial records and bookkeeping is being done in the Nigerian business industry and the eradication of traditional and manual bookkeeping methods.
Using at least one accounting software in 2024 is a prerequisite for every business that wants to improve its financial efficiency, minimize human errors, generate accurate financial reports and data while also ensuring tax compliance. Most businesses use accounting software for their finances and reporting, these businesses could range from mid-sized businesses such as manufacturing companies, wholesale distributors, and construction firms to larger corporations such as financial institutions, healthcare providers, and even non-profit organizations.
However, small businesses in Nigeria face some challenges when it comes to making the right decision on the most suitable accounting software to choose from the array of software providers in the Nigerian business market. These challenges could be due to; limited budget, complexity, technical support, customer support, customization, user-friendliness, etc.
In this article, we will have a look at the Top 3 Accounting Software Solutions for Small Businesses in Nigeria: 2024 edition Top 3 Accounting Software Solutions for Small Businesses in Nigeria: 2024 edition
Small businesses as used in this context could be retailers, professional service providers, freelancers and even hospitality service providers.
WHAT IS ACCOUNTING SOFTWARE?
Accounting software is a financial management tool that helps businesses manage the recording, tracking and reporting of their daily revenue, expenses and other financial data. Accounting software is an essential tool that not only improves accuracy, saves time, and enhances decision-making through data, but it also helps to manage clients, reconcile bank accounts, and generate insightful financial reports that support the smooth and continuous growth of your business.
WHAT ARE THE KEY FEATURES OF ACCOUNTING SOFTWARE ?
General Ledger
A general ledger is the actual record-keeping system containing all of a business or organization's financial transactions. It sorts transaction information through individual accounts listed in the chart of accounts and serves as the primary system for recording, storing, and summarizing these transactions, including details like the date, description, and monetary amount; it also acts as the main source for generating the company’s trial balance and financial statements, with its accuracy validated by ensuring that the sum of all debit accounts equals the sum of all credit accounts.
When making a purchase decision on the type of accounting software suitable for your small business or enterprise, it is advisable to go for a software with a robust general ledger system. Investing in an accounting software with a strong general ledger module will not only simplify your financial management processes, but also reduce errors and provide you with the necessary tools needed to grow your business efficiently.
Account Payable and Receivable
A good accounting software should have an efficient account payable and account receivable modules. Account payable simply means the money a business or organization owes its vendors or suppliers, while account receivable means the money a business receives from its customers or clients. These two are of crucial importance in an accounting software, as they manage the business’s debit and credit transactions.
The account payable of an accounting software in addition to managing the debt transactions of a business also maintains a comprehensive list of vendors along with their contact details, tracks due dates, payment terms, and payment histories, records and processes incoming invoices from vendors, generates and prints checks for payments, facilitates electronic payments, and provides detailed reports on outstanding payables, and payment histories.
The account receivable module also creates and sends invoices to customers, records their payments and overdue balances, analyses the age of outstanding invoices to identify potential collection issues, and provides reports on outstanding receivables, and sales analysis.
Read Also: Zoho Books: A Comprehensive User's Guide
Billing and Invoicing
A key feature of an accounting software for small and medium-sized businesses is its ability to automate the creation of new and recurring invoices, customize them for each customer, simplify billing and payment, accept various payment methods, and enable fast payment processing.
The invoicing module in accounting software allows you to set reminders for when money is owed to your business, sending automated notifications to your customers based on invoice and payment dates. You can also view a summary of payments owed, customer statements, and reminders. Additionally, the software should enable you to create and print invoices with custom templates and send them electronically, this to ensure timely payments from your customers.
Financial Reporting
One of the most prominent features to lookout for in any accounting software is its financial reporting module. Financial reporting is the formal process of documenting a business’s financial activities. This is usually done to make informed decisions, demonstrate accountability, or to evaluate the overall performance of a business or organization’s financial health. A suitable accounting software for your small business should be able to generate a financial report so you could know the solvency of your business. Basic financial reports that an accounting software should be able to generate for your business are; balance sheets, income statements, cash flow statements, and budget.
Using an accounting software for generating the financial reports of your business helps to reduce the risk of human errors by eliminating manual data entry, this also ensures that the information provided is accurate and consistent.
Bank Reconciliation
Bank reconciliation is a crucial accounting process that ensures the accuracy of your financial data by comparing and matching your business’s financial records with its bank statements. This method involves carefully aligning the transactions recorded in your accounting software with those listed on your bank statement, ensuring consistency and accuracy on a specific date. By reconciling these records, you can detect any errors, identify inconsistencies, and verify that all purchases and transactions align with the bank's records for that specific period.
It’s recommended that a bank reconciliation be carried out every month to maintain an accurate picture of your small business’s cash position.
In a typical accounting software, bank reconciliation features include importing bank statements, processing reconciliation, categorizing transactions, and generating reconciliation reports.
Now that we’ve covered what accounting software is and its important key features, let’s explore the top 3 accounting software solutions for your small business.
This article highlights Zoho Books, Sage Business Cloud Accounting, and QuickBooks as the best accounting software solutions for Nigerian entrepreneurs – small to mid-sized business
Now, let’s examine each one to see how it fits your business needs.
1. Zoho Books
Zoho Books is a cloud-based accounting software that offers a comprehensive accounting solution for small businesses. Zoho Books is a solution that can simplify the bookkeeping and accounting tasks of your small business. Zoho Books is one of the best online accounting software for small businesses, as it allows you to manage your business finances efficiently.
This software is an affordable alternative to QuickBooks, and it has all the accounting features you need to scale your small business at an affordable rate. These features include; invoicing and estimate, a client and vendor portal, bank reconciliation, sales and purchase order, online payment, reporting etc.
By using Zoho Books, you can create professional invoices for your customers and receive online payments all from one place. This accounting software is quick, efficient, easy to use, and will assist you in taking control of your business's finances.
You can also access Zoho Books on your mobile phones, its mobile app is available on both Android and iOS platforms. This app allows you to use all web features such as invoicing, report generation, and expense management. Zoho Books is ready to help your small business achieve its long term objectives.
Droidedge Consulting is a certified Zoho Partner, and we can help your small business get started with Zoho Books.
2. Sage Business Cloud Accounting
Sage Business Cloud accounting is a very similar software to Zoho Books, as they both are cloud-based solutions and they offer similar features designed to help small to mid-sized businesses. Sage Business Cloud Accounting is known for its reliability, ease of use, and a wide range of powerful features. It offers a user-friendly interface, real-time financial reporting, comprehensive invoicing and billing capabilities, a smooth bank reconciliation module, multi-currency adoption, and automated tax compliance. They offer similar features designed to help small to mid-sized businesses. Sage Business Cloud Accounting is known for its reliability, ease of use, and a wide range of powerful features. It offers a user-friendly interface, real-time financial reporting, comprehensive invoicing and billing capabilities, a smooth bank reconciliation module, multi-currency adoption, and automated tax compliance.
This software also supports multiple users with controlled access for each user, it ensures data security, and provides the flexibility of managing finances from anywhere via its mobile app. Sage Business Cloud Accounting ticks all the necessary features of an efficient accounting software on our list, features such as bookkeeping and general ledger, account payable and receivable, automated billing and invoicing, financial reporting, bank reconciliation, expense tracking, and payroll so, this accounting software is a must-need solution for your small business.
To get more insight into how to use the Sage Business Cloud Accounting software, check out our tutorial video on:
Also see how to sign up on Sage Business Cloud and get a 30 days free trial:
3. QuickBooks
QuickBooks are accounting software packages offered by Intuit. They are designed for small, mid-sized, and even large businesses. QuickBooks accounting software are currently of three editions; QuickBooks Online, QuickBooks Desktop and QuickBooks Enterprise.
QuickBooks Online and QuickBooks Desktop is designed for small to mid-sized businesses, while QuickBooks Enterprise is built for large organizations and corporations. QuickBooks Online as its name says is the online software that can be accessed anywhere on the cloud using a web browser, this offers flexibility, and it’s recommended for your small business. QuickBooks Desktop needs to be installed on a computer and doesn’t give room for a remote access, it comes in different versions such as pro and premier.
Generally, QuickBooks software have robust features to cater for your business accounting needs, very similar to Zoho Books and QuickBooks, this goes from the friendly user interface to the cloud and mobile accessibility, invoicing and billing, inventory management, payroll processing, tax compliance, multi-users adoption and reporting.
Check our video tutorial on How to Use QuickBooks Online:
CONCLUSION AND RECOMMENDATIONS
As a small business owner or enterprise in Nigeria who needs to make a purchase decision on the best accounting software solution for your small business, this article will guide you on the key features to look out for in each software.
Choosing the most suitable accounting software solution for your small business as a Nigerian entrepreneur or startup depends on some few factors such as; your business size, budget, desired features in the software, accessibility, data security and privacy.
These three accounting software solutions namely; Zoho Books, Sage Business Cloud Accounting, and QuickBooks, that we have explored in this article suits your small to mid-sized business needs in the Nigerian business market, and they all have their unique strengths that will help you improve the finances of your business. Another good reason why they all suits your business needs is because they are all cloud-based accounting solutions – accessibility
Also, to understand how these financial and bookkeeping solutions can enhance your business finances and overall efficiency, you can reach out to our experts at Droidedge Consulting as we are an efficient IT firm, and we provide implementation, customization, development, training and support for these accounting software and other ERP systems.