What accounting software do most software startups use?

QuickBooks is still the de facto standard for small business bookkeeping. What you really need is to keep records in the format your accountant wants them in.

This means you you should hire a qualified accountant before you do anything else on the financial side. A good CPA will help you think through many of these questions and save you from a number of easily avoidable tax and financial heartaches.

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I agree with Keith on hiring an accountant.

Quickbooks is the de facto standard but difficult to use if you don't understand well some accounting terms. How many know what a "Chart of Accounts" is?

Have a look at FreshBooks. I tried it last month and is working very well..

You can send an estimate to customers, have then approve it, track your time and later create an invoice from it. They have a service where they can mail the invoices to your customers with payment vouchers included.

The only drawback is that you can't import bank transactions to it when you record expenses.

None?

You don't need accounting software - you only need to write invoices, keep track if them and pay your invoices... ...and the accounting is done by an accountant ;)

You really do NOT want to get into making mistakes there ;)

My take is that:

• The preferred choice in small business accounting software depends on the country. There are many little things which make the 'local' choice superior. Examples: automatic handling of VAT; full integration with local 'payroll handling' services; tax handling; printing of forms for local authorities / shipping firms; etc.

• The trend is towards online solutions (web applications) rather than programs installed locally. Full time accountants are annoyed by this, as webapps are slower and less suited to control by keyboard only, but the trend is marching on. Webapps are themselves a form of 'extranet', i.e. the entrepreneur, the remote bookkeeper, and the remote Chartered Accountant can all look at the same online, continuously updated view of the company's finances. The benefits in collaboration outweigh the negatives associated with webapps.

Here in Scandinavia the webapp e-conomic.com is the choice of many newly formed companies. It's a local Danish company. For the British Commonwealth I have from time to time seen Xero.com mentioned. Feel free to edit and add recommended providers.

If you are in the US you need an accountant first. Interview several and pick one you are comforatable with. Once you have an accountant, your accountant will specify what software you need. The software you use to keep your records and check book has to be compatible with the system your accountant uses. (Otherwise you pay your accountant to convert your data into his format- a complete waste of time and money.)

In the US, Quick Books or Quick Books Pro seems to be the standard. You typically email your accountat a copy of the Quickbooks file, they make necessary changes, then email the result back to you.

If you are doing payroll you, once again, need to pick a payroll system compatible with your accountant.

For bookkeeping right now I use outright.

When we actually get significnat revenue I will start using quickbooks.

We paid an accountant/CPA to do our taxes this past year.

I would suggest FirstEdge or AccountEdge rather than QB. Your CPA just needs reports, it doesn't matter what software you use if you can provide your CPA with the P&L, Balance Sheet, and (in our case) the general ledger for the year (to provide more information). In business it is important that you understand double entry accounting as a prerequisite, though not strictly necessary, you'll always be sort of baffled and beholden to your accountant or CPA if you don't.

I disagree that you should first go out and "hire" an accountant. As a start-up do you really want to saddle yourself with that much overhead right off the start, on a non-growth oriented function?? If the reason is because of expertise, then how would you have the expertise to evaluate your accounting candidate? Then you also have another employee to supervise, evaluate, calls in sick, etc. Not to mention the time, energy, and cost associated with selecting, and installing the accounting software and the hardware and IT resources that go along with it. Then you have to consider back-up and recovery plans, upgrades, and the list goes on and on.

In the name of shameless self promotion, here is my "best of both worlds" suggestion: outsource your accounting to a CPA firm that specializes in start-ups and other small businesses. For just a few hundred dollars per month, a firm can handle all of your day to day accounting processing, including sales, AP, AR, payroll, reconciliations, and financial statements on the front end, and be a consulting resource as well. Your accounting system will be 100% web-based. Therefore, you can access your records and reports 24/7 from anywhere in the world that you have an internet connection. One reason some hesitate to outsource is that they have the mistaken notion that they give up control or security. But in reality they gain control and security because they have greater access around the clock to their data, which is maintained by skilled experts who have a professional license and reputation at stake.

I'd be happy to discuss further. Feel free to contact me anytime. -ghippe@smartfinancials.net

I personally do not, but the MS site contained this post:

Distribution of Microsoft Office Accounting was discontinued effective November 16, 2009. We would like to thank the many dedicated users and partners who have been enthusiastic supporters of Office Accounting over the years. Customers who purchased a product license for Office Accounting before November 16, 2009 may continue to use Office Accounting. Product support for Office Accounting will continue in accordance with the published Microsoft product support life cycle.

Given that they no longer produce or support it, I would definitely steer clear.

Hope this helps