January 20, 2020
Choosing the best accounting software for your coworking business
Keeping track of your cash flow is a top priority for every business – what’s owed to you, what’s owed by you and what’s been paid. Without a clear understanding of this, it can be difficult to grow your coworking space. Yet staying on top of accounting can be tricky. You can do it yourself, which involves time-consuming data collection and number crunching, or you pay someone else. But that’s expensive, especially for a small business that likely doesn’t need a full-time accountant. This is where accounting software can make a big difference. Typically online and cloud-based, accounting software helps businesses automate everything from logging expenses and creating invoices to tracking cash flow and managing taxes. As a result, you save time and money.
It’s worth noting, however, that accounting software is not the same as a payment gateway. Allowing you to accept payments online, payment gateways are likely another solution you’ll need to incorporate into your coworking technology ecosystem.
To help you on your search for accounting software, this post will outline the most popular options for coworking spaces and some key factors to consider.
Market leading accounting software
One of the biggest challenges when looking for accounting software is narrowing down options. There’s no shortage of solutions available and each one has its benefits. A couple of the most popular options amongst our coworking clients are Xero and Quickbooks Online.
Xero is known for its user-friendly interface and robust feature set, most of which are included in all of their plans. This is a big advantage, as many solutions reserve top features for their premium packages. Learn more about the Optix Xero integration here.
QuickBooks is another popular option, with strong financial forecasting functionality to track the health of your business. Not to mention, lots of time-saving features which it estimates saves users 40 hours a month on accounting tasks. Other great options include Sage, Wave, FreshBooks and Zoho, one of the most affordable solutions for small businesses. Optix will be launching an integration with Quickbooks soon.
Evaluating your options
Accounting software does more than just invoicing. As you explore the options, here are a few key features to look out for:
Financial reporting – Keeping track of your business health can be tricky. Good accounting software will use the data it collects to help you see the big picture. This can include your cash flow, profits and losses, and balance sheet.
Budgeting – Many accounting softwares offer budgeting tools. While you may already have a budget sitting in a spreadsheet, budgeting within your accounting system can greatly simplify implementing and tracking your budget. Some software even provides real time updates on how you are performing relative to your budget.
Expense tracking & accounts payable – Tracking the money going out is just as important as tracking the money that’s coming in. Some accounting software allows you to set up your vendors and schedule regular payments. By doing this within your accounting software, this information can feed automatically into your financial reporting to give you accurate, real time snapshots of your financial position.
Accounting on the go – You can’t always be in the office, but it’s still important to stay on top of your finances. Make sure your chosen solution offers a mobile app. That way you can send and track invoices, view reports and capture business expenses – wherever you are.
Support services – Sometimes issues occur. Don’t forget to review the customer support options your solution offers. Do they have a live chat? A 24/7 phone line? What about a good help center or community forum? Having these can be invaluable if things go wrong.
Integrating with your coworking software
Perhaps the most crucial consideration when choosing an accounting software is the ability to integrate with your coworking software. A solid integration is essential for the efficiency of your operations. Almost all coworking software has some integration capability with accounting system, but simply having an integration doesn’t mean it does everything you need. If your systems don’t speak to each other in the right way, you could face errors hat negate the operational efficiencies that led you to invest in software in the first place.
Consulting your accountant, bookkeeper and/or CFO is a good place to start to ensure you understand the requirements for your business. They’ll have a strong understanding of what’s most important and what this integration needs to do.
To help evaluate your coworking software options, here are some good questions to ask:
Does the integration support automatic user creation in the accounting system?
This can be a real time saver when onboarding new members. Ideally you should be able to add your members into your coworking software and have them automically created in your accounting system. No more double keying user details in various systems!
Is the sync one-way or two-way? Is it automatic or manually triggered?
A two-way sync is ideal as it will allow the invoice to be updated in either system while giving you the confidence that your records are accurate. Ideally, this should also be automatic so you don’t have to worry about manually triggering a sync any time you’ve updated an invoive.
Can you link memberships/rooms with ‘Accounts’ in the accounting system to allow for automated categorization of revenue?
Understanding where your revenue is coming from is likely a top priority. By linking accounts to products and services in your coworking system, you can be sure revenue is being attributed to the correct category.
Does the system alert you to any syncing errors?
With complex software integration, errors can happen. But knowledge is power and you don’t want to leave your members in the dark, especially when it comes to financial matters. An integration that alerts you to any problems will allow you to get ahead and stay in control of the situation.
Does the integration support sequential invoicing regardless of what system an invoice is created in?
This will support good record keeping, and sequential invoicing may even be a regulatory requirement in your country.
Will a fully replicated invoice be created in the accounting system or will it just be a transaction record?
Having a fully replicated invoice will provide a more granular view of your revenue, and can be helpful from a planning and budgeting perspective.
How is tax handled?
Nobody likes getting a call from the tax authority! Make sure you understand how tax is handled and tracked to avoid a headache come tax time.
What manual effort needs to be done to supplement the integration?
Integrations are designed to save you time and make your operations more efficient. Having a good understanding of what your integration does not do will allow you to manage your team’s workload accordingly.
Optix & Xero
Optix now integrates directly with Xero to help you create accurate, automated invoices that are marked as paid as soon as the money comes in – letting you focus on building your coworking business with financial peace of mind. An integration with Quickbooks Online is now also available with Optix.