451 The Best Ledger Software for Accounting Firms

Accounting friends. The ledger, the accounting ledger. It's the most important tool in an accountant's tool belt, right? But did you know there's like 19 is my, my whole list right now is 19 apps. A whole bunch of them are like gunning for the incumbents. A few of them are on the way out and we need to be like moving on to the next platform. And there's actually a small collection here that have some promise because most of us, we are, we're ready, we're ready for a new accounting ledger. The ones most are using are getting a little long in the teeth. So I'm going to Cruise through all 19 today, put them in a few different buckets of things where it's like, ah, you're probably okay touching them. Here's the ones to keep an eye on. But then in my accounting firm like here are the only ones that I would actually invest in. Pull up a chair. There's going to be some surprises. Welcome in. If this is your first time here, we talk about running accounting firms basically. I last ran a 40 person firm and I went fully from actually being totally unopinionated on, on what ledgers my clients used to being very opinionated. And isn't it funny that whether you're serving a bunch of clients, whether you're even like an accountant in private, isn't it funny that you're often not consulted on what ledger platform a company picks? Like shouldn't, shouldn't that be, I don't know, shouldn't you be part of the feedback loop there as accounting firms? It's, it's definitely something that we could stand to be more opinionated on because you know, say you do tax client brings you those books and you do once a year cleanup and it's on like a wave or something like that and you're like, I don't know, the first gosh darn thing about this platform. I don't know how to even reconcile the bank account. And this is, this is going to cost the client some money cause it's taking me a ton of time. You are, you're absolutely within your rights to be opinionated on this stuff. In fact, it's the sort of thing that's as simple as like you being vocal about what the right thing is. And 90% of the time the client will be like, okay, cool, I'll just go with whatever you told me. The only reason I did something different was cuz I just, I didn't know what you would recommend. So 19 apps in total. I've got them bucketed into five different buckets. First bucket, the champs. Second bucket, the old farts. Third bucket, the if you absolutely have tos fourth bucket apps for which there's almost certainly a better alternative for every single one. But then the last bucket, the contenders. Let's just start with the champs. So who are the winners? The only two ledger platforms I would be building my accounting firm on right now today are QuickBooks Online and Xero. And the reasons why there's one that's, that's kind of surprising. It may not be what you think, but then as I go through the other ledger platforms like one by one we'll walk through why, why those ones aren't the answer today or at least aren't yet. But the kind of surprise reason why today those are the only two platforms that I would lean into is in the last 24 months we've got like a new category of month end close automation Tech. These are other apps that integrate with a select number of accounting ledgers that have become just an incredibly crucial part of an accounting firm's tech stack. You're trying to get like a large volume of month end closes done efficiently. And the tools within this month end close automation category, they are Keeper. Keeper's the leader here. Xpert, X, B, E R, T and Zenit. Those are the three big ones. You've got some other ones called Numeric, that's more like an internal finance team tool for getting month end closes done. And then TrueWind who's doing a lot of marketing right now but doesn't have like an actual product you can really work with yet. So the three main month end close automation platforms to look out for Keeper, Expert and Zenit and these platforms have gotten so compelling and they make such a difference to how efficiently you can get month end closes done that I will no longer consider a ledger that doesn't work with these platforms. So like it's about the ledger platform, but it's also not about the ledger platform. It's about the other tools that I use that connect to my ledger. Because this, this done right. Like what this actually looks like using Keeper for example, is you get the bank recs done inside of the ledger, but the entire rest of the month end close happens in the month end close tool, not in the ledger itself. So requesting stuff from clients like quality assurance, identifying transactions that may have been coded wrong, pulling in receipts to transactions, reviewing the balance sheet and the profit and loss, all of that for most firms now happens outside of the accounting ledger. And if this like sounds surprising to you? Um, go check out the demos we've done of keeper on my YouTube channel. That'll give you like a five or ten minute overview of like how those apps work and why they've so quickly become an essential part of the tech stack of bookkeeping firms inside my private community. I've got 500 accounting firms in there like some of the most progressive firms in the world. 80% of the booking bookkeeping firms in that community are now using Keeper. That is these folks are totally dependent upon Keeper which right now only integrates with QuickBooks Online and Xero. So for me that eliminates all the other letters from contention now, not to say more platforms won't be supported by these month end close automation tools. Almost certainly they will expand to other platforms, but right now that's a non starter for me. So the Champs 0 QuickBooks Online let's talk about the other solutions. First the talk about the old farts. I got three in the old farts camp and there's still a lot of people using the old farts. I think we just broke a record for how many, how many times we've said that word in a podcast episode. But these three platforms, if you're still on them, I think we kind of know that we need to move on. Maybe we're still grieving the loss of them first 1 Thomson Reuters accounting CS and there's a lot of people that use this still. And one of the reasons is folks are still having trouble paying the ransom of monthly subscription fees for cloud accounting ledgers. Zero has been pretty good here. They've had subscription plans. I mean I had, back in the day I had zero accounts that were like less than $5 a month. They had partner only plan types. So like only accounting firms could actually get these plans. If you go to zero and look at their pricing, you wouldn't see these low cost options. But Xero's always had like very cheap options. QuickBooks introduced, what do they call it, Ledger or something like that. It's basically like I think it was $6 a month or less than $10 a month. A very low cost sort of bare bones version of the QuickBooks online experience. This has made it, I think newly more compelling for those folks who are still using desktop platforms and unwilling to put clients onto cloud platforms that come with a monthly subscription Accounting cs. There's just infinitely better options. The big one in this category is QuickBooks Desktop and this goes beyond what's the better app? This or that. I mean as far as I'm concerned the best all in one accounting ledger we've ever had. It was QuickBooks Desktop and it's not even close. I should, I should say this is all through the lens of like US Accountingdom. Accounting ledgers usually have some version of local compliance built in. And, and it's why when you go to Australia you see a ledger platform like myob and that doesn't live anywhere else because it has a bunch of built in sort of compliance stuff that's only relevant in those regions. Similarly, that's why you see QuickBooks being so big in the US it has always had, you know, like support for US payroll stuff, 1099 filing, stuff like that. And so QuickBooks desktop, like for a US accounting platform, it never, I mean it never got any better than QuickBooks Desktop. Yes, there were issues like the bank feeds, like work, I don't know, they were kind of sort of bank feeds. You don't have the third party integrations. A lot of the niceties of, of cloud accounting now. But if you could only roll one app buddy, I'm taking QBD into battle every single time now. Not even Intuit wants you to use QuickBooks Desktop. You can still get a desktop enterprise, but they've shut down support for QuickBooks Desktop. You can't use it to process payroll and all that stuff. So clock's ticking there. And honestly we probably should have made that move already because all the investment for the last, I don't know, seven plus years has been going into other platforms. And anytime you make a tech decision in your firm, you are kind of betting on a horse. And I don't want to bet on a horse that the owner of the horse doesn't even believe in. And Right now that's QuickBooks Desktop. Hey. This episode is sponsored in part by Canopy, one of my top recommended practice management systems. Because Canopy, it does a lot, man, and it doesn't just do it, it doesn't just try really hard. It does it nicely. Like it looks like a well built product, thoughtfully designed because man, woo. Cloud practice management systems. There was a window there like five to seven years where it wasn't that. And Canape was like one of the only companies to come out of that generation of practice management management tools was something that was like really modern, super slick and like somehow has threaded the needle of being actually one of only two practice management systems I recommend for firms 50 employees and above. But it's still actually one of the very best ones for itty bitty firms too. And to somehow do both of those things and a product is like exceptionally hard, but they've somehow stuck the landing on that canopy. If you're out and about at conferences this year, you're gonna see Canopy there. And that matters a lot to me because if they're rocking up at conferences, they're having a lot of conversations with accounting accountants. With accountants. They understand your needs like to a level of depth a lot of folks don't that don't make that same investment into like spending time with accountants. We've done some demos of Canopy on my YouTube channel. If you want to take a peek at what they look like. You could be impressed. But to learn more about Canopy, check out the link down in the show notes. Today's episode is sponsored in part by Teamup, who helps you hire talented accountants directly in the Philippines. You ever wondered how much it would cost to hire a senior accountant? That is what do you pay a senior accountant in the Philippines on an ongoing basis. Senior accountant Just so we're on the same page, somebody who can like manage the entire end and accounting process. Post all the closing entries. In fact, here's the profile of senior accountant Team up recently placed into a firm that a bachelor's in accounting where a certified public accountant which is a Philippines certification bill.com and QuickBooks certified 6 1/2 years experience in accounting over 5 years experience with US firms experience managing, training and reviewing the work of junior team members. Doesn't that sound nice? Proficient with QuickBooks, Xero, Bill.com, rippling gusto expensify a salary 2000 bucks a month the normal range for a senior accountant in the Philippines between 1700 and 20 $200 USD per month. Buddy accounting. It's a global language really is doesn't matter if you got butts in the seats and in the land of the free or in somebody else's land accounting's accounting to learn more actually could swipe Team Up's whole salary guide that they just made. It's really good. I'll link that down in the show notes. Last one in the old fart category Sage Business cloud accounting/sage50cloud. They don't even know what to call it. This one's bigger in the UK than anywhere else. I still have a fond place in my heart for Mass 90. Used a lot of that in my early accounting firm days. But there's just. There's better options now let's jump to the if you absolutely have to category. So these are the things where it's like I would love to avoid them at all costs. But there are situations where this may be the best option and sometimes the pain and the cost of changing means the right platform for you is different than what it would be if you were starting out brand new tomorrow. Like there's the right answer for someone that's starting from scratch and then there's the right answer for someone that has a whole bunch of organizational stuff on a platform already. It's not always the right move to burn all that down and switch to the better alternative, even if there is a hypothetical better alternative. So the two, the two platforms in this category. First is NetSuite. Oh, NetSuite. Unbelievably expensive, shockingly unintuitive. And there's actually a whole like category of tech now being built to extend Xero and QuickBooks online just, just to avoid having to go to NetSuite. So with it you get some stuff like works better for multi entity and there's just some, some functionality there that serves mid market companies in a way that the, the players at the bottom of the market don't. But things as basic as like bank fees, like just such 101 features are like new things for most of these mid market platforms. I count on them being five to seven years behind what you get from a QuickBooks or a Xero. And this is one of those situations where more people think you need to go to NetSuite than actually do. And QuickBooks Online and zero, they're, they're, they're actually both moving up market. Also Intuit now has its sort of enterprise version of QuickBooks Online and so they're trying to capture this as well. There's almost no situation where I'd recommend going to netsuite if you're already on Net Suite. That's a different, different can of worms. We're changing off of it. I also don't know that I recommend that. Just know. And if you're an accountant, here's a good analogy is a client comes to you and says I just talked to somebody and they said I need to get an audit, need to have my company's books audited. And what do you immediately do? You say put me in touch with that person and let me figure out what it is they actually need. That is not an audit. We need to do the same sort of thing. And anytime some somebody comes to us and says I think we need to go to netsuite, you say, point me to whatever watering hole you've been hanging out in. Who's telling you this? And I will get to the bottom of it on your behalf and save you just a whole pile of money and headache. So are there very select situations where it's necessary? Yes, like there are, but it is 5% of the scenarios where most people say it's necessary. The other app in the Absolutely. In the. If you absolutely have to's QuickBooks Enterprise, man, QBD E. I'll allow it. Okay. Does it come with the cloud integrations that I want and all that? No, but man, you got some pretty good sized companies that are still running on QuickBooks Enterprise and you got to think real hard about all the scaffolding you got to build to get a company off of that. And is that a job that I'm going to like, jump at doing unless there's a very, very obvious pain point and a clear solution to it? Because QuickBooks Enterprise, like, it comes with some pretty cool stuff and like, don't get me wrong, there are better alternatives for all the little individual things that it does. You just got to make sure that you got that scaffolding really sorted out before you go through the work of taking somebody off that platform. I would never put someone new onto either of these platforms, virtually never with NetSuite. But they're platforms where, if that's where you already set up camp, they're not as bad as some others. But it's not going to be fun to change. All right, let me give you the seven tools for which there's a clear, better alternative. And then we'll wrap with the four contenders, the seven tools for which there's a better alternative. Number one, Fresh Books. Fresh Books. And they've been doing a ton of marketing to accounting firms over the last couple of years. They even had like sort of a council of, you know, sort of industry leaders who are giving them feedback on the platform. And they've definitely made investments in the platform and in a very basic sort of partner version of the platform that's basically like a client Quick Switcher. And they're doing like the, I don't know what the. The partner program, kind of the bronze, silver, gold sort of thing. What you see from most apps that are doing an accounting firm program now. But FreshBooks, like, let's be real, FreshBooks has been around for quite a long time. And the platform, it's just simply not as good as Xero or QuickBooks Online, not as fully featured, and it doesn't come with the ecosystem that both of those tools come with. So how is FreshBooks going to overcome that disadvantage? When you look at some of the upstart, like new companies that are doing stuff in a very different, more AI driven way. You can maybe see it like you have to approach the general ledger in a fundamentally better and more powerful way, like a step change, improvement courtesy of AI or something else. In order to overcome the ecosystem advantage that QuickBooks Online and Xero has. FreshBooks, they're not that squeaky fresh new like company like they've been around a long time. And so not only would they need to somehow outdo QBO N0 and the network advantage, they would need to outdo like the big brain new sort of startups in the space, which just seems like absolutely extremely unlikely. It's actually really cool people behind FreshBooks, like I don't feel good saying that. That's just the reality, the logic of my decision making process. If I were like, am I going to put a bunch of my Firm's clients on FreshBooks or not? That's why I wouldn't. Second one, I've gotten this category free agent and this is actually a pretty popular one in the uk, but it suffers from the whole like regional compliance thing. So they've got all the regional stuff sorted out in the uk so it's a very comprehensive platform there. It just isn't really set up for like US usage. But it's an example of like a new ledger player actually getting traction in a region which us in the US we want to see a new ledger player get traction. So seeing that happen in other regions, that's exciting. Odoo accounting. A lot of people are big time Odoo nerds. Odoo is kind of like Zoho where it's like 100 different apps in one app and like there's just, there's better alternatives to Odoo if you're trying to run absolutely everything on the Odoo platform. Sure. Like maybe that makes sense then to use Odoo accounting. Otherwise there's way better alternatives. I can say the same thing about Zoho Books. Zoho has an entire accounting platform. Same thing here. There are better alternatives, alternatives that have a greater ecosystem. But if you want to run the whole shebang on Zoho, sure. Like roll Zoho Books. It's actually an interesting niche opportunity for an accounting firm is to work with businesses that are all running on say Odoo or Zoho. For you to then run that stuff yourself and know it really well. Like that's a cool way to make your accounting firm stand out. But if you're just looking at all the ledger options, like there's, there's just better options here. Patriot Accounting, same thing. There's better alternatives that come with a better ecosystem. Intact NetSuite is just better than intact. So why would you end up on intact? Suffers from a lot of the same things as netsuite but like if I got to go to a crappy upmarket solution, it's, it isn't the good one. So that's just kind of one more argument against it. Last one, Wave. So Wave is more like a consumer accounting app and Wave was rough in the beginning. Like it wasn't even a full proper double entry accounting ledger. But Gang Wave these days it like it kind of slaps like it's pretty good. I've been in an account and kicked around and like it's actually pretty darn solid. It's definitely more modern than zero and qbo. It just, it doesn't come with the power user tools that we want as accountants and it doesn't have the ecosystem. So I can't actually do a whole bunch of month end closes Profitably in there as a tool for consumers is pretty good. Like possibly the best. It's, it's very good. This episode is sponsored in part by Kleinhub Kleinhub who turns your firm's busy seasons into wow seasons. Because those seasons, they're an opportunity to wow the ever loving off of your clients. Wait just one minute, Scooter. You can't say that in an ad read. I'm sorry K, I get excited. Client Hub is gonna wow your clients right off their socks because it is a game changing client experience. Simple, intuitive, easy to use, doesn't require Ph.D. and goodness gracious, this practice management system is complex. It's not some like herky jerky bolted on client portal that has like three options on the left hand side and each one you select. It looks like, I don't know, something some junior developer just made in like 25 minutes. Because let's be real, that's what a lot of client portals still look like. Can you get back to the bullet points here? Okay. One of the reasons people love Client Hub is clients. Clients just become users. Like the design is so good, they're like oh I get this. It's kind of just like a two sided task management system. Client hops in, looks like the other tools that they use, they can see their tasks that their files, their financials. It's not hard mobile friendly so they can do it on the road too. But it's intuitive, doesn't really require training and they're going to be like, oh, you're like a cool modern firm. Not like that last firm that I used where I logged into this thing and I'm like, henry vii, is that you? You know what I mean. To learn more about Client Hub, check out the link down in the show notes. Today's episode is sponsored in part by cloud accountant staffing. Their backstory, they were actually an accounting firm that started hiring accountants in the Philippines. They just started doing it for some of their friends and now, now they will do it for you, comma friend. They help you hire talented accounts in the Philippines because they've got recruiters on the ground. They're pulling from what is actually an increasingly powerful finance workforce in the Philippines. All of the big four offices have like huge offices over there. Any type of talent you can hire in the US you can hire the Philippines as well. But when you start out, you're going to have all these ignorant questions and the stuff you're even afraid to ask, like, how do I even get them a computer to work on? Do they work on their own and VPN into mine? Do I send them a computer? What about like power outages, Internet outages, like team building? How does any of that stuff work? I can tell you the mistake that I made is I got stuck on those things for like two or three years and tried to think through all these solutions. How am I going to do my disclosures and all that? Gang, that's like half of the value of these services. Services is they've walked so many accounting firms through this. Stop trying to guess what the right way is to do it. Let them tell you what has actually worked and not worked for other firms. They will hold your hand through it like it's the reason that these services exist. So if you're considering it, like just hop on a call with them to learn. You got nothing to lose. At the very least you'll come away with like some new ideas and thoughts on how this stuff actually works. Highly recommend having a chat with them to learn more about cloud account staffing. Check out the link down in the show notes. All right, last category here, and this is the most interesting one. The contenders, because we all want somebody to topple QBO and 0, right? But at the same time, we don't want somebody to like rip the third party tools that we love out of our hands. Like oftentimes it's the same person saying that, that they're ready to use something different, a different accounting ledger, but they've got 20 other apps that they absolutely love that only integrate with, with QuickBooks and Xero. And so that's what's up against these platforms right now is they don't have the ecosystem. Most of them are still very early days so like they feel a little bit basic. Let me run through them for you. Number one is a tool called Campfire. And they're a little hush hush about their product and sort of like who they're great for. I know they've been shipping some cool AI stuff, but Campfire, at least right now it's, it's one of those apps where I'm, I'm kind of trying to listen to the community and be like who's like is anybody having success here? Like is anybody kind of impressed by it? And I'm really not hearing anything much yet. And in order for it to overcome the ecosystem advantage of the incumbents, like the new things, it's gotta be off the charts. It's gotta be crazy good. Doing things that the other ones aren't doing, that's somehow saving you a humongous amount of time. I'm not seeing it yet from Campfire. Would love to see it though. They're one that actually they might be the, the newest of the four companies in the contenders second contender. Company's been around a while but just shipped a full ledger with digits. So digits. They've done a bunch of things. They've done bill pay, they've done uncategorized transactions, they've done quality assurance, they've got a whole bunch of things. But they finally launched a full general ledger. And the thing they kind of hang their hat on is and, and I believe them when they say this, they can do more automated classification than anybody else. And so they, they are doing like just from a bank feed, they're doing classification straight out of the box more accurately than anybody else does. But the problem is I think most AI companies in the accounting space think that accountants spend all their time classifying transactions. We just don't like of all the time that goes into the month end close, a very, very small percentage of time is allocated to classifying transactions. And people who do spend a lot of time classifying transactions aren't using bank rules effectively. Like those are the people that you come in and you try to support because it shouldn't take a lot of time to classify transactions. You're really just coming in and handling the exceptions and you're knocking those things off one by one. And many of those things are tricky. Like they require context. Like you know in the US there's 10 different ways that a Starbucks purchase could be classified or an Amazon purchase could be a million different things. And no app can get the right answer to that just out of the bank feed. And so the solution there is like does it have a copy of the receipt and can it, can it like accurately look at the item detail and put that in the right bucket and digits does this as well. Like you can, you can provide receipts and it will pull that context and all that. This is like less than a month old digits new General Ledger. It is a bunch of super big brain AI dudes and they're good people and I want to see them have success. But like we've been saying, it's got to somehow overcome the network advantage of the ecosystem or they need to integrate with the month end close automation platforms to bring that work to where accountants are already working. One of those two things has got to happen and I haven't seen either of them happen yet. The third contender here is probably the most mature one, Puzzle. So Puzzle started out as a pretty good solution for more kind of software companies like tech startups because it was very built around sort of the, the ecosystem of tools that those companies would use, like your ramp Mercury stripe, like Gusto rippling. As long as you were using kind of the best of breed other connected tools it could pull all that stuff into a single platform and do it really well. Since then they've zoomed out a bit and have have gotten better at not just tech companies but handling small businesses in like a more holistic way. And they do some cool stuff admittedly that, that Zero and QuickBooks Online don't do. But I don't know that it's like the step up and I really don't know any firms that have made that full sail switch to Puzzle and been like yeah this, this totally unlocked something for us. I have seen a couple of firms do this but I honestly my impression is that it's more of a PR thing because puzzles aligned with kind of like the tech vertical and sort of startup stuff. And if I'm going after those types of clients then that actually may be a great reason to go to Puzzles so that I can do kind of co marketing stuff with them and all that. But like strictly looking at that ledger, unless there's marketing upsides to that for me, I don't think it's worthwhile. At least I wouldn't say so yet. The last one of the contenders here, a platform called Soft Ledger and they're going A little more upmarket handling, multi entity stuff. Their marketing looks, it's all looks very good. I've, I've seen a couple people shout it out but the reality is I don't single person actually using this in the wild yet. Like it all looks very impressive but until I can actually hear from firms that have validated it and are like yeah this, this actually rocks, then I can't really give it my endorsement. If there's any that we're missing here, drop that stuff down in the comments. So these 19 apps, this is just one of the categories in this sort of app database that we just developed for accounting firms. I can link it down in the show notes, it's totally free, you can swipe it. Other categories that we've covered in there, tax prep platforms. These are us tax prep, practice management systems, tax workflow tools, close automation. We talked about that a bit. Proposal platforms and then now we're getting into like software tools to deliver specific service lines. So the first one that we just published was around Payroll 19 payroll apps. And whether I recommend them or whether I don't like that's the real value of this. It's not just a roundup of apps, it's like all of my commentary on these apps and why I do or don't recommend them. We're going to keep building on this and I'd love to hear from you what app categories you would like to see here. We're looking at stuff like tax planning apps, receipt management, reporting, bill pay spend management because like building your app stack and choosing what apps to use with clients. I still remember what for me were like my dark days before I had a network online and had found thought leadership content around accounting firm running. Picking apps to use like that was really, really hard because the only people I could talk to about what to use or not was with salespeople. And salespeople obviously are incentivized to sell me these apps whether they are good for my firm or not. Now these days I honestly am in such a fortunate position where I know so many accounting firms and I have these conversations every single week. I'm literally getting on a coaching call with, with 30 firms right after I record this and I hear the real stuff and I ask, I'm like what's working? What's not working? Why is this person saying that this works but this other person is saying it doesn't work? Trying to find the nuance in there for different types of firms and because I know how hard it is to not have all that context. We're trying to pack as much of that as possible into here to simply give away and to reward the companies that are building the best stuff for accounting firms. Because ultimately so much of being able to run an accounting firm profitably boils down to how good is our tech stack and how well do the teams behind these tools understand what I do. We've seen so many platforms come and go that were built by people that just fundamentally don't understand how accounting works, but also how accounting firms actually run and make money either. And so if this can send a bunch of people to the right tools, if they can save you having to zigzag from choosing the wrong platforms like I did, wasted three years going down the path of the wrong practice management system. I just like the more transparent this decision making information can be, the better. And if there's anything wrong in here, man, I want to hear that. If you have a bad experience with the tool, tell me about it. Since I put this out, I've gotten a ton more feedback. I've actually changed some of these recommendations in the notes in here because I'm like, oh, I've heard that this tool is like kind of been rough the last six months. Like support's not going great. That's now part of like the information here so that before you go into buying something, you know what you're getting into and the salesperson like they're not going to tell you that. So swipe that if you haven't yet. We'll probably, we may do some other podcasts on like specific categories and who are the winners and losers in those categories, especially right now as it's kind of tech selection season for firms. Gang, that's all I got today. Thanks for being here and I'll see you in the next one.