For most freelancers and entrepreneurs, bookkeeping is an annoying topic that they actually want to spend as little time on as possible. We'll show you when accounting software makes sense for managing your finances and take a look at specific providers.
As your finances are "unfortunately" a very important part of your activity as an entrepreneur, without which you won't get very far in your business, you should have an overview of them at all times. The easiest way to do this is, of course, with the right accounting software. I would like to use this article today to tell you more about this and introduce you to some popular providers in this area.
Why do I need accounting software?
Whether you are a freelancer, self-employed person or store owner - once you have provided your service or sold products, you have to write an invoice in order to earn money.
When you write invoices is of course up to you. Some people do it straight after work, others at the end of the month.
But one thing is always the same: bookkeeping takes time. Time that you rarely have, especially as a self-employed person, freelancer or store operator. However, finances are an important part of our daily work.
Of course, some processes can be fully automated. Store operators in particular can usually benefit from systems such as WooCommerce for example. This is because invoices can be created automatically with the help of add-ons. However, a certain amount of accounting work still remains.
The task of good accounting software should therefore be to handle as much paperwork as possible with as little effort as possible. This is the only way we can continue to focus fully on our work as self-employed people.
Which accounting software modules are available?
Anyone who has already taken a closer look at the topic of accounting software will quickly realize that not all software is the same. This is because each provider has different modules or versions in its area.
Not every module is always suitable for every self-employed person. For small businesses, a basic/beginner package for writing invoices is usually sufficient.
However, self-employed people who are already obliged to do double-entry bookkeeping and are therefore required to prepare a balance sheet cannot, of course, do without a suitable bookkeeping module. If you are also a store operator, there is no way around a merchandise management system.
It is also important to differentiate between software that you can only use offline or online.
Invoice - For beginners
The entry-level module for accounting software usually only includes the pure writing / canceling of invoices and offers. Payment reminders can also be created and customer data managed.
Accounting - For advanced users
This accounting module also allows you as a self-employed person to create delivery bills and order confirmations, for example. Online banking, item and receipt management are also available here so that these can be assigned directly to sales within the software.
Some other important functions are the creation of an EÜR, advance VAT return, P&L, balance sheet and the management of assets. Of course, you can also keep a cash book here if required.
Merchandise management - For professionals and entrepreneurs
The merchandise management module is also used by self-employed people and companies to manage goods, suppliers and prices. Stocks can be booked in and out, new goods can be created and individual customer prices can be set.
Basic functions: Every accounting software should include these functions
Useful accounting software should contain some very important basic functions for day-to-day work. In my view, these should include the following:
- Writing invoices / quotations
- Unlimited number of bookings
- Document management (entry / posting)
- Product / service management
- Cash book
- Merchandise management
- Online banking
- EÜR
- P&L
- Balance sheet
- Elster interfaces (advance VAT return, etc.)
- DATEV
- Tax consultant access
- Import / export of data
- Smartphone app
As I mentioned above about the various modules, you must of course always consider which functions you actually need.
Offline accounting software: 3 providers compared
As the name suggests, offline accounting software is a program that can only be installed on a PC or MAC.
This is the only way you can use it afterwards. However, it is worth noting that classic "offline" accounting software hardly exists today. This is because almost all well-known providers such as Lexware or Sage now also offer a cloud function in their desktop versions.
This means that relevant data can also be retrieved from these offline programs via the Internet (e.g. as an app) while on the move. Below I would like to introduce you to three well-known providers of offline accounting software:
- Lexware
- WISO Accounting 365
- Sage50 Accounting
Lexware
The accounting software from Lexware accounting software is suitable for all self-employed persons and entrepreneurs who are obliged to keep double-entry accounts, as well as for those who only need to prepare an income and expenditure account (EÜR).
Lexware Accounting is available in up to 6 modules:
- Base
- Plus
- Plus (+ support service package)
- Pro
- Premium
- Premium (+ support service package)
Single-user modules:
Multi-user modules:
The modules differ mainly in the scope of the available functions. For example, the Plus module includes a cashbook function and the annual VAT return. From the Pro module upwards, a SYBASE database and the management of several companies.
With the Premium module, the user also receives the asset management function. The Plus and Premium modules can also be booked with a support service package.
Via "Lexware mobile", data such as document data, customer / supplier data, article data and important company key figures can be called up directly online via a browser.
WISO Accounting 365
WISO Accounting 365 is ideal for bookkeeping in small and medium-sized companies. The software is suitable for creating a balance sheet, income statement and profit and loss account.
The accounting software is available in two different modules:
- WISO Accounting 365
- WISO Accounting 365 Professional
WISO Accounting 365
WISO Accounting 365 Professional
The biggest difference between these two versions is that with WISO Accounting 365 Professional can also be used in a network. Up to 5 workstations can then communicate with the accounting software at the same time.
Further information about WISO Accounting 365 you can find on buhl.de read more.
Sage 50 Accounting
The software Sage50 Accounting software is suitable for all self-employed people and companies who want to manage processes such as order processing, merchandise management and financial accounting within one tool.
Sage50 Accounting is available in 4 different versions:
- Standard
- Comfort
- Professional
- Quantum
The four modules differ in the type of functionality they offer. The "Comfort" module includes budget management, ordering and e-invoices. From the "Professional" module, the function for the customizable boss overview and different variants for article management. The "Quantum" module also includes the functions for terminal operation, use at up to 20 workstations and batch management.
A cloud function is available in all modules of Sage50 Accounting modules. This can be used, for example, to process and manage orders, contacts and appointments via Microsoft Office 365. In addition, the Sage Capture App documents can be archived.
Further information about Sage50 Accounting you can find on sage.com read more.
A direct comparison of the most important functions:
| Functions | Lexware accounting | WISO Accounting 365 | Sage 50 Accounting |
| Invoices / Offers | ✔ | ✔ | ✔ |
| Document management | ✔ | ✔ | ✔ |
| Product / service management | ✔ | ✔ | ✔ |
| Cash book | ✔ | ✔ | ✔ |
| Merchandise management | ✔ | - | ✔ |
| Online banking | ✔ | ✔ | ✔ |
| EÜR | ✔ | ✔ | ✔ |
| P&L | ✔ | ✔ | ✔ |
| Balance sheet | ✔ | ✔ | ✔ |
| Magpie | ✔ | ✔ | ✔ |
| DATEV | ✔ | ✔ | ✔ |
| Tax consultant access | - | - | - |
| Import / Export | ✔ | ✔ | ✔ |
| Smartphone app | - | - | ✔ |
| Users | 1-5 | 1-5 | 1-20 |
| Price* | 178,80 - 693,60 € | 139,95 - 299,00 € | 329,00 - 2.087 € |
*All prices are annual prices (as of September 2019)
Online accounting software: 3 providers compared
With online accounting software, unlike offline accounting software, the data is not stored locally on a computer or MAC. Instead, the data is stored in the cloud.
This has the great advantage that the accounting software can be accessed at any time and from anywhere. As a self-employed person and entrepreneur, you are therefore very flexible, as you can access your accounting at any time.
In my opinion, another major advantage of online accounting software is that many providers offer a free trial period. As a self-employed person, freelancer or entrepreneur, you can test all the functions before deciding on a software.
The tools also always have an app that you can use to access all important data via your smartphone. In the following section, I would like to introduce you to three popular providers of online accounting software in more detail:
- lexoffice
- sevDesk
- Sage Business Cloud
lexoffice
With the online accounting software from lexoffice can be used to write invoices, create quotes, manage customers and prepare tax returns. It is suitable for entrepreneurs, the self-employed, small businesses and start-ups.
Lexoffice is available in 3 different modules:
- Invoice & Finances
- Accounting & Finances
- Accounting & Reports
The individual modules differ in the scope of their functions. For example, the "Accounting & Finance" module includes functions such as the cash book, an OP overview and the advance VAT return. The "Accounting & Reports" module also includes the option of creating a profit and loss account (P&L) and an income statement (EÜR). Furthermore, fixed assets can be managed and depreciated here.
Lexoffice has an app that can be used to create quotes or invoices, manage contacts or check account balances. With the help of the receipt app, receipts can also be photographed and uploaded directly via smartphone.
Further information about lexoffice you can find on lexoffice.de read more.
sevDesk
Also with sevDesk is a purely online accounting software that can be used to write invoices, manage customers and post incoming payments. The accounting tool is particularly suitable for the self-employed, small businesses and start-ups.
Users of sevDesk can choose from 3 different modules:
- Invoice
- Accounting
- Merchandise management
The individual modules also differ in terms of their range of functions. The accounting module includes additional functions such as recurring invoices, digital document management, advance VAT returns, a cash book, online banking and much more.
The merchandise management module provides you with additional functions such as warehouse management, stock bookings, price variants for suppliers and supplier and item assignment.
Using the available sevScan App can be used to create invoices, offers, reminders or contacts via smartphone. In addition, receipts can be viewed at any time while on the move.
Further information about sevDesk you can find on sevdesk.com read more
Sage Business Cloud
Sage Business Cloud Accounting is online accounting software for start-ups and the self-employed. You can use it to create invoices and quotes, use online banking and create evaluations and reports.
The tool from Sage is currently only available in 2 modules:
- Accounting Start
- Accounting
Both modules offer you as a user different functions. The "Accounting Start" module is primarily suitable for invoicing and payment allocation.
The functional scope of the "Accounting" module includes stock management, multi-user, writing quotations, creating delivery bills and a DATEV export.
The accounting tool Sage Business Cloud Accounting also offers its users an app for on the go. This can be used to create invoices and view current cash flow figures or reports.
Further information about Sage Business Cloud Accounting you can find on sage.com read more.
A direct comparison of the most important functions:
| Functions | lexoffice | sevDesk | Sage Business Cloud |
| Invoices / Offers | ✔ | ✔ | ✔ |
| Document management | ✔ | ✔ | ✔ |
| Product / service management | ✔ | ✔ | ✔ |
| Cash book | ✔ | ✔ | - |
| Merchandise management | ✔ | ✔ | ✔ |
| Online banking | ✔ | ✔ | ✔ |
| EÜR | ✔ | ✔ | ✔ |
| P&L | ✔ | ✔ | ✔ |
| Balance sheet | ✔ | ✔ | ✔ |
| Magpie | ✔ | ✔ | ✔ |
| DATEV | ✔ | ✔ | ✔ |
| Tax consultant access | ✔ | ✔ | ✔ |
| Import / Export | ✔ | ✔ | ✔ |
| Smartphone app | ✔ | ✔ | ✔ |
| Users | 1 - unlimited | 1 - unlimited | 1 - unknown |
| Price* | 7,90 - 16,90 € | 7,90 - 45,90 € | 8,00 - 14,00 € |
*All prices are monthly prices (as of September 2019)
Offline vs. online accounting software
Which type of accounting software you choose as a self-employed person, founder or entrepreneur depends on your personal needs. If we start from the pure range of functions, offline accounting software is in no way inferior to online accounting software.
However, it has one major drawback: it can only be used via a desktop. A tool like Sage50 Accounting also offers a cloud function here, but in contrast to the purely online programs on the market, this is very limited in its range of functions.
If you want to be able to flexibly write invoices and quotes or view current sales and reports while on the move, online accounting software is more suitable for you.
Furthermore, access for the tax consultant can be set up directly in online accounting software. This is not so easily possible in offline tools. The only option here is usually the DATEV export and transmission of the data to the tax office.
Free accounting software - getting started with basic functions
As a founder and small business owner, you naturally want to generate as little expenditure as possible at the beginning. This is understandable, of course. After all, it usually takes a few weeks or months to get your business or self-employment up and running.
However, if you don't want to do without a feature-rich accounting software, you should start with a free online accounting software that offers you all the basic functions.
From my own experience, I can recommend the provider paperwork with a clear conscience.
This offers you a free version with all basic functions. This includes writing quotes and invoices, recording expenses, goods and services, document management, master data management and time recording.
More about the provider Paperwork you can find on papierkram.de read more.
My personal experience with accounting software
Bookkeeping is stupid and time-consuming! That's probably what most people reading this article are thinking. But the right accounting software can really take a lot of work off your hands.
When I was still self-employed on a part-time basis, accounting software like paperwork was perfectly adequate. I also only used the free version in the beginning and was very happy with it. For this reason, I can only recommend it to you.
However, when it became clear that I was going to become fully self-employed, I compared some interesting tools again - even though paperwork naturally offers additional modules in this area.
I can already tell you one thing: there are really incredibly good programs and providers in this area! For me, it was particularly important that I could allocate my sales and receipts directly via the tool (online banking).
I also wanted to be able to view my current figures on my smartphone at any time and scan receipts directly into the app. I also love statistics and reports in which I can view current developments. In other words, I want to be able to create an EÜR or P&L at any time.
After really extensive research, I finally opted for Lexoffice and I still don't regret it. What I particularly like is that new features are added almost every month. The developers are very hard-working here. The support team also responds very quickly.
Of course, that's just my personal experience ;-). As I said, there are many other great providers out there that offer just as great features as lexoffice offer. If you are interested in the tool, please read my review on my blog. Here I have lexoffice in detail.
Conclusion
Founders, self-employed people and entrepreneurs should use accounting software right from the start. It allows you to keep your finances in order right from the start and keep an eye on your bookkeeping at all times.
Whether you use offline or online accounting software for this is of course only of secondary importance and is up to you. It all depends on your personal taste.
If you only want to save your data locally, then use an offline tool. However, if you want to be able to view your accounting at any time while on the move, you should opt for an online tool.
I hope I've been able to clear up the accounting software jungle for you. If you have any questions or input on the topic or if you are missing an accounting tool from the list, please leave me a comment.
