Cloud accounting solutions in the marketplace today can be segregated into those meant for full-fledged companies and those that cater to small and micro businesses, which are usually service-oriented and have few employees or perhaps just the entrepreneur themselves.
In the case of the latter, the accounting needs are minimal and are mostly required for tax purposes and for their own reference. A largef business on the other hand has certain documentary obligations, reporting responsibilities, and more management. In a previous post, I wrote a review of QuickBooks Online, which is meant for larger businesses (the larger end of the small business spectrum) and has all the bells and whistles that you would expect. A different kind of online accounting solution is provided by Outright, which I had also taken a look at a few days earlier (see review of Outright). These two products illustrate the differences between the two markets.
The difference between QuickBooks and Outright can seen even just by looking at the pricing. Even though it offers a one month trial period, QuickBooks online isn’t free and the smallest subscription starts at $12.95 a month. From there it scales with the number of staff who need to log in, going up to $63.16 for five users.
Outright, on the other hand, is free to use. You don’t even need to provide any credit card details. The only time you pay for Outright is if you want annual or quarterly reports and need to do your taxes. In which case it’s $9.95 per month.
This basic pricing difference is illustrative of the differences in the target markets. For a larger business (even one that still qualifies as a “small” business), the monthly cost of QuickBooks is negligible. It’s a fair deal for a product that manages every aspect of accounting. For a solo entrepreneur though, QuickBooks will probably be overkill. A simple streamlined accounting application that tracks their income and expenses and helps them with taxes is all they need. For them, Outright is perfect.
Made for the Internet Age
Another hint: Outright’s focus is the help it provides with 1099K tax forms. This is a new requirement by the IRS instituted a couple of years ago to take care of online payments through services such as PayPal and Amazon. If you have more than 200 transactions and over $20,000 in sales using these portals, they will send you a 1099K form that you need to incorporate into your tax filings.
Outright will help you process this. It automatically pulls data from your financial institutions and classifies them according to IRS approved categories and generates a Schedule C worksheet. All of this tax assistance is of great help to small business owners and entrepreneurs for whom home accounting is just a burden.
Outright can also integrate with other online software solutions such as FreshBooks, which handles invoicing. Used together, they can streamline and efficiently handle all the accounting needs that a service oriented business might have. But it won’t hold a candle to what QuickBooks Online is capable of. Any company that has to manage employee salaries and inventory will require a serious and comprehensive accounting solution for which QuickBooks is the perfect fit.