SMB Accounting Solutions from Microsoft

April 7, 2021
Business Central, ERP
7 min read
SMB Accounting Solutions

Did you know small to medium-sized businesses (SMBs) make up 99.9 percent of all U.S. businesses (SBA, 2019)? The Small Business Administration (SBA) defines a small business as a company with fewer than 500 employees. Of that statistic, the SMBs with fewer than 100 employees account for 98.2 percent while those with fewer than 20 employees account for 89 percent of all businesses in the country. And every SMB needs accounting solutions.

Business owners require the right technology to manage their business and their finances. A staggering 40 percent of small business owners spend at least 80 hours a year on taxes, payroll, contracts, and working with accountants ( The only way to reduce that number and reallocate some of that time to other areas of your business is with SMB accounting solutions like Excel or cloud accounting software. These accounting solutions are necessary to help get the job done quickly and efficiently.

Fortunately, there are a lot of great modern tools out there to fit any budget. To help you select the right accounting software for your growing small business, we’ve provided an overview of accounting software and shared some expert insight into some incredibly flexible SMB accounting solutions available from Microsoft.

What is Accounting Software?

Accounting software helps you record and report your business’s financial transactions. While accounting software functionality is different based on the product, an effective accounting solution includes modules for accounts payable, accounts receivable, general ledger, journals, and payroll. At its core, accounting software should help you:

  • Record transactions (bookkeeping)
  • Organize receipts
  • Pay your employees
  • Generate invoices
  • Pay bills from suppliers
  • Track sales and calculate sales taxes
  • Collect information for tax returns

According to Statista, 64.4% of small business owners make use of accounting software. In fact, many of them opt for software instead of recruiting the help of a qualified accountant. Thanks to automation, accounting software makes it easier for small business owners to track transactions easily and analyze performance. This is especially important for SMBs because it helps them do more with less – saving valuable time and reducing errors caused by manual data entry and processing. It also provides a working platform for important documents and receipts to access at any time. Small business accounting software comes with different features, but ultimately, it should show you how you’re doing and where you’re spending your money.

How to Choose the Right Accounting Software for Your Small Business

Like SMBs, accounting software comes in many different sizes and densities. Whether your accounting needs are simple or complex, the technology you use depends on your budget, your business needs, and your goals.

According to PCMag, the best small business accounting software for 2021 is Intuit QuickBooks Online. Most accounting software is now available as an online subscription service because it’s more affordable and flexible for small businesses. QuickBooks Online is easy to use and keeps track of everything from invoicing to bookkeeping in one program. Although it’s user-friendly and built to serve a wide variety of users, it can also be expensive for an entry-level accounting system. Not to mention that it only provides accounting functionality—which can pose its own set of limitations and problems when your business expands down the road.

To manage their financials, SMBs can choose between a range of free and low-cost accounting and invoicing software to cloud-based accounting software to enterprise resource planning (ERP) systems. The trouble is—before you can start to consider what technology best suits your business, you need to understand your needs. If you run a small business as a freelancer, a simple Excel spreadsheet or a free online accounting solution might be all you need to handle your expenses and income. On the other hand, self-employed professionals and small businesses with more customers, employees, and revenue need accounting software to handle invoicing, transactions, payments, and payroll. There are also scalable accounting solutions for larger businesses and more advanced needs. These systems are more expensive and complex but will help you in the long run.

Before you start comparing accounting solutions, we recommend you take the time to identify your needs (basic, average, or advanced), designate a budget, and research the features that will best meet your current needs and plans for the future. While you may just be in the early stages of your business, you want to pick a solution that will grow with you. In the next section, we have provided some great accounting products from Microsoft to help you get started.

SMB Accounting Solutions from Microsoft

As a team with over 100 Microsoft certifications, you could say that we are big fans of Microsoft products. When it comes to affordable, flexible software for growing small to medium businesses, Microsoft has made some huge leaps forward in the last few years. They offer a selection of business management software and productivity tools to grow and manage your business. Their accounting solutions also easily integrate with some of the accounting software solutions listed above.

Once you have outlined your SMB needs and budget, here are some Microsoft accounting solutions to consider:

  • Microsoft Excel
    Excel is one of the most popular tools for accountants. Many growing SMBs start off using spreadsheets to manage basic accounting tasks like bookkeeping, budgeting, and forecasting. From pivot tables to what-if analysis, Excel is a familiar and low-cost accounting solution that offers a ton of flexibility for summarizing raw data, comparing complex datasets, creating reports, and managing cash flow. Excel also includes ready-made templates for all types of accounting functions, including invoicing templates, ledgers, and budget trackers.
  • Microsoft 365
    Previously known as Office 365, Microsoft 365 is an integrated cloud platform that delivers Microsoft’s industry-leading productivity apps together with intelligent cloud services and world-class security. Microsoft 365 includes all of the essential tools a growing SMB needs to host meetings, manage files, connect with customers, create budgets or reports, collaborate with employees, defend against cyber threats, keep customer data protected, and manage IT. Here are some of the key apps and features included in Microsoft 365 subscription plans:
    • Microsoft Excel – essential accounting software with templates for budgeting, reporting, and bookkeeping.
    • Microsoft Teams – host online meetings and collaborate with your team from one place.
    • OneDrive Cloud Storage – store and share files with 1TB of space.
    • Exchange Online Protection – help protect your email against spam, malware, and known threats.
  • Microsoft Dynamics 365 Business Central
    Business Central is Microsoft’s cloud-based ERP solution built for growing small to midsized businesses. Unlike the accounting software mentioned above, Business Central is a complete business management solution designed to connect your sales, service, finance, and operations. It is an easily tailored and extendable solution, allowing you to use the functionality you need and add on to the system as you grow. Business Central’s financial management capabilities include:
    • General ledger
    • Dimensions
    • Multiple currencies
    • Budgets accounts schedules
    • Consolidation
    • Intercompany postings
    • Cash flow forecast
    • Fixed assets
    • Cost accounting
    • Deferrals
    • Bank account reconciliation

Many small businesses start with invoicing or off-the-shelf accounting software but outgrow it after a few years. An ERP system might seem like a drastic jump from pure accounting software, but the benefits speak for themselves. Today’s flexible cloud ERP software is not like the expensive and cumbersome ERP systems of old. Find out more in a recent blog post on ERP software and the benefits of using ERP as a small business.

BLOG POST: 9 Benefits of Using an ERP for Your Small Business

Ask the SMB Technology Experts

SMBs are a major driver of global economic growth, and, as an SMB ourselves, we want to help you be successful with the right technology. If you are looking for advice on accounting software or have any questions about the accounting solutions from Microsoft listed above, please get in touch with our team directly.

Contact Tigunia Today