First off, this is an opinion piece based on experience and intuition. There is no “one-stack fits all” scenario, and every business has different needs. If anyone tells you definitively that something is absolutely the only and best choice – they are likely getting a kick-back for selling that thing. Assuming there is no “right” answer to this age-old question, I will present my opinion as to where small businesses should start in implementing the best technology for them. 

Many different industries have very specific vertical needs. We can talk about the vertical tech-stack options in a future blog. For this post, we will focus on the systems that reach across the industry in what is commonly referred to as a horizontal app-stack/tech-stack/technology stack/application stack/whatever buzz word you would like to use.  

When we partner deeply with accounting software at High Rock, we look for companies that align with our values, have strong investment for continuous improvements, and are willing to utilize customer feedback to enhance their products. We also analyze current functionality, price point, and integrations available. Let’s dive into the pieces that make a great horizontal technology stack for finance and accounting.  

General Ledger 

At the core of every good accounting technology stack is a general ledger. The general ledger is the source of truth for the financial data. If you want a history lesson on general ledgers and sub-ledgers and how technology advanced to the current state of cloud computing – read this blog here. Although I would love the general ledger to be retired to history (a topic for another time), the fact is it will not be gone for many years. The players I love in the cloud accounting space for small and mediumsized businesses are as follows:  

Xero
Great for companies up to $20M in revenue.
Caveat: we have client companies up to $100M on Xero utilizing add-on applications and custom automation.

Xero is a great all-around general ledger. The price point starting at $11/month for unlimited users but limited functionality (20 accounts receivable invoices and 5 bills) is a no brainer. Plus, Xero is constantly running specials to give discounts for the first few months of service. For most baby startups, it makes sense to start with a general ledger that can scale with you as you grow. Xero also includes a free subscription to its subsidiary software – HubdocHubdoc works to automatically read and code your source documents and push them seamlessly into Xero. Frequently, micro-businesses can automate a majority of the coding through the use of these two tools alone. 

While the starter plan is great for low volume businesses making up to a couple hundred thousand a year, the growing and established plans are available to turn on when the company hits a few milestones. Both of these plans include unlimited users, unlimited transactions, and Hubdoc. The growing plan is $32/month, and the established plan is $62/month. The established plan gives you access to best-in-class foreign currency translation, expense management and reporting, and project accounting.  

While businesses over the $2M mark may need some additional help in the accounting arena, there are a multitude of add-ons available in the Xero Marketplace that are pre-vetted and have robust integrations into Xero. Utilizing the entire ecosystem will give small businesses the boost needed to stay on an affordable general ledger program for a long time. 

Sage Intacct
Great for companies over $20M in revenue or with complex reporting requirements.

Sage Intacct is a great solution for rapidly scaling companies, have complex accounting needs, and can afford this type of enterprise solution. The prices vary depending on users, modules needed inside of Intacct, and the number of entities. Additionally, Sage Intacct has a very robust Marketplace for integrated applications to solve a bunch of business needs. 

Sage Intacct has builtin modules to handle complex revenue recognition, inventory, consolidations, project accounting, and much more. The program can scale down to small business or up to Fortune 500 businesses. 

One of the best parts about Sage Intacct is the native reporting engine. You can track dimensions inside the program that allow you to tag data in a multitude of directions. The built-in reporting module (this one is a default with every installation) allows you to report on any data in the system – both financial and non-financial. You can customize BI (business intelligence) dashboards that rival any external reporting system. Sage Intacct does combined and consolidated reporting inside the application without the need for additional software. This is a fantastic solution for growing companies that need to transition from QuickBooks Enterprise. 

Speaking of QuickBooks, you may have been wondering about the notable absence of QuickBooks Online (QBO) or QuickBooks Desktop on this list. Generally speaking, I never recommend a desktop product for small businesses. It is just not dynamic enough for company leadership to utilize to run their businesses. And while QBO is a good tool, it is not my favourite. We by and far hear from our clients that Xero is easier to use, and they like it better. In my opinion, we should recommend what small businesses will actually utilize. While we do work with clients on QBO and would not needlessly convert them to Xero, we prefer Xero. 

Payroll 

Most companies hire employees relatively quickly in their growth. To handle employees, you need to run payroll. I always recommend that companies utilize a full-service payroll provider from their first employee. Yes, it may seem like an additional expense when you, as the business owner, can handle pieces of it. Still, it is much less expensive than digging yourself out of a noncompliance hole that occurs regularly with do-it-yourself options. Trust me; it is worth the upfront dollars for peace of mind.  

Gusto
Great for companies up to 100 employees.

Gusto is a full-service payroll application that services every USA state. It combines streamlined technology, automation, and good design to service clients. Gusto will handle everything from employee onboarding paperwork to filing monthly/quarterly/annual reports with state and federal agencies to remitting the payments on your behalf. They also have upgrades to include integrated time tracking software, a Human Resources (HR) databank, and access to benefits advisors who can get your employee’s health insurance. You can even sign up for worker’s compensation insurance through them! Did I mention it is really pretty? Our clients’ employees love having their own portal to make payroll withholding changes, see their paystubs and W-2s, and access company benefits information. Gusto integrates deeply into Xero (you can even click a button inside Xero to log into Gusto). Gusto starts at $39/month plus $6/employee. Sign up here if you are a small business. Sign up here if you are a bookkeeping or accounting firm and want to see all your clients in one place. 

ADP
Great for companies with complex payroll needs and over 100 employees.

Yeah, I know; here I am, a tech-forward accountant recommending a traditional industry giant. I just have not found a new and sexy application that accomplishes what ADP can in a broad stroke. ADP has different programs geared towards different company sizes and can right-size the application you sign up for. They will file and pay all the taxes on your behalf and help ensure compliance. Additionally, they have best in class integrations with the core general ledger programs, including Xero and Sage Intacct. If Gusto cannot handle your complicated payroll needs, ADP + an add-on surely can. Prices range significantly depending on the size of the application you sign up for. They also have training, HR, and other benefits to utilizing their software. 

Seriously, do not try and learn payroll yourselves. It is relatively cheap to use a payroll service, and they do the heavy lifting. When you get to the point that approving payrolls, pushing hours into the software, registering with new states, and dealing with a bi-weekly responsibility becomes too much, that’s where High Rock steps in and utilizes these tools on your behalf.  

Accounts Payable and Expense Management 

Paying bills is a pain in the butt. Most companies pay everything by credit card in this day in age and then deal with the “forgot to cancel” expenses. I am grouping accounts payable and expense management here because it covers most areas of money going out. I will break down my favourite tools for businesses of varying needs and size. 

Divvy
Best for companies that love free software + rewards or companies in need of strictly enforced budgets. (Basically everyone.)

This solution scales up or down easily to handle anyone from a baby startup to an enterprise. The software that powers Divvy is free, and it is robust. It allows you to create virtual cards to handle subscriptions or one-off payments, inherently reducing the risk of the card number being stolen. It also gives you the flexibility to cancel that virtual card and not have to deal with fighting with vendors after the fact about when they inevitably charge you an extra month. Divvy gives you rewards – 1.5% at a minimum on any purchase and up to 7% on restaurants. Every team member with spending authorization gets a card, and you can set very clear budgets where they cannot exceed that spend for a specific category. Their software allows for receipt matching without significant manual intervention – you take a picture. 

Divvy can also do bill pay for you! You can push out payments via ACH with a one-level approval process natively inside of Divvy. This feature is handy if you use Divvy’s budgets and want to track against them across all expense spend. Divvy has another feature for expense reimbursement management, which I have not personally played with, but I hear they do a great job at it. This feature lets your team members submit for reimbursements, and you can push the reimbursements directly to them through the system. Expense reimbursement is the only feature you really pay for, and at $5/active user/month, it is a good price point. 

All around, Divvy offers fantastic software, a clear roadmap to even better software, and best in class small business credit cards. The only negative thing I can say is that they do not integrate with Xero yet – it has been promised in the next few months. But if you are a QBO user, sign up for Divvy right now! If you are an accounting firm and want to partner with Divvy, sign up here. 

Bill.com
Best for companies with complicated approval workflows.

Bill.com has been around for a long time. It has a market share on the bill pay function and even partners to white label their service through some major banks (Silicon Valley Bank and Bank of America are two of the largest). You can customize multi-step or departmental approval workflows and streamline many manual processes inherently in the accounts payable cycle. Bill.com will mail checks or send ACHs. You can also receive payments for accounts receivable. It is pricey, though, so I only recommend this solution when a company truly needs multi-step approvals and have complicated accounts payable. This application integrates seamlessly with small business accounting products (Xero/QBO) and mid-market products (Sage Intacct/NetSuite)

Xero Expenses
Best for teams under 20 members.

Xero Expenses is robust for expense reimbursement submission. The tool allows you to take pictures, it will automatically read and suggest coding, and then pushes the expense reimbursement into accounts payable. I recommend this for small teams because it is built into Xero and available without the per-user license fee that plagues most of the alternatives. The only downside is that it does not yet integrate with any payroll software for automatically pushing the reimbursement into the payroll run. You can automate pushing these into a bill pay solution and reimburse team members outside of payroll. However, it is a multi-step process either way and, therefore, not an ideal solution on the planet for larger teams. The time savings for small teams is fantastic, and it is a solid solution!    

RelayFi
Best for owner-operator businesses.

Relay is a new and awesome banking product. They provide a free business checking account for companies with some awesome technology behind it. The setup is online and takes about 15 minutes. It is easy, well designed, and integrated. Relay offers built-in virtual debit cards to use on various subscriptions (much like how I described you could use Divvy). While they are debit cards, Relay promises credit card level limited liability in the case of fraud. Relay has built-in bill pay that syncs to your core accounting system to identify bills that need to be paid. They can pay via ACH or check directly through the app or online web app. You can build in some simple approval processes as well. Considering all of this is built into your checking account, this is my favourite small business options for owner-operated businesses.

Routable
Best for small businesses who are not planning to be small for long.

Routable gives robust approval workflows similar to bill.com but at half the price. Routable allows for automation with both accounts payable and accounts receivable. It has best in class visibility into the stage in which any invoice is. It also has strong integrations into both Xero and QBO currently, with NetSuite in the works and plans for integration in Sage Intacct, Routable has quickly become a tool I believe in. This product was built with a price point small businesses can afford, and the functionality mid-sized companies need.
  

Covering these three areas with solid integrated technology is a great place to start. We will be writing more to elaborate on other cycles of accounting and what cloud accounting tools we prefer here at High Rock. Whatever you decide to go with, make sure you consider your current state and where you will be in the next few years. Switching core accounting technology is not an easy process, and it is best to set yourself up for long term success.  

 

 

Written by:

Liz Mason

First off, this is an opinion piece based on experience and intuition. There is no “one-stack fits all” scenario, and every business has different needs. If anyone tells you definitively that something is absolutely the only and best choice – they are likely getting a kick-back for selling that thing. Assuming there is no “right” answer to this age-old question, I will present my opinion as to where small businesses should start in implementing the best technology for them. 

Many different industries have very specific vertical needs. We can talk about the vertical tech-stack options in a future blog. For this post, we will focus on the systems that reach across the industry in what is commonly referred to as a horizontal app-stack/tech-stack/technology stack/application stack/whatever buzz word you would like to use.  

When we partner deeply with accounting software at High Rock, we look for companies that align with our values, have strong investment for continuous improvements, and are willing to utilize customer feedback to enhance their products. We also analyze current functionality, price point, and integrations available. Let’s dive into the pieces that make a great horizontal technology stack for finance and accounting.  

General Ledger 

At the core of every good accounting technology stack is a general ledger. The general ledger is the source of truth for the financial data. If you want a history lesson on general ledgers and sub-ledgers and how technology advanced to the current state of cloud computing – read this blog here. Although I would love the general ledger to be retired to history (a topic for another time), the fact is it will not be gone for many years. The players I love in the cloud accounting space for small and mediumsized businesses are as follows:  

Xero
Great for companies up to $20M in revenue.
Caveat: we have client companies up to $100M on Xero utilizing add-on applications and custom automation.

Xero is a great all-around general ledger. The price point starting at $11/month for unlimited users but limited functionality (20 accounts receivable invoices and 5 bills) is a no brainer. Plus, Xero is constantly running specials to give discounts for the first few months of service. For most baby startups, it makes sense to start with a general ledger that can scale with you as you grow. Xero also includes a free subscription to its subsidiary software – HubdocHubdoc works to automatically read and code your source documents and push them seamlessly into Xero. Frequently, micro-businesses can automate a majority of the coding through the use of these two tools alone. 

While the starter plan is great for low volume businesses making up to a couple hundred thousand a year, the growing and established plans are available to turn on when the company hits a few milestones. Both of these plans include unlimited users, unlimited transactions, and Hubdoc. The growing plan is $32/month, and the established plan is $62/month. The established plan gives you access to best-in-class foreign currency translation, expense management and reporting, and project accounting.  

While businesses over the $2M mark may need some additional help in the accounting arena, there are a multitude of add-ons available in the Xero Marketplace that are pre-vetted and have robust integrations into Xero. Utilizing the entire ecosystem will give small businesses the boost needed to stay on an affordable general ledger program for a long time. 

Sage Intacct
Great for companies over $20M in revenue or with complex reporting requirements.

Sage Intacct is a great solution for rapidly scaling companies, have complex accounting needs, and can afford this type of enterprise solution. The prices vary depending on users, modules needed inside of Intacct, and the number of entities. Additionally, Sage Intacct has a very robust Marketplace for integrated applications to solve a bunch of business needs. 

Sage Intacct has builtin modules to handle complex revenue recognition, inventory, consolidations, project accounting, and much more. The program can scale down to small business or up to Fortune 500 businesses. 

One of the best parts about Sage Intacct is the native reporting engine. You can track dimensions inside the program that allow you to tag data in a multitude of directions. The built-in reporting module (this one is a default with every installation) allows you to report on any data in the system – both financial and non-financial. You can customize BI (business intelligence) dashboards that rival any external reporting system. Sage Intacct does combined and consolidated reporting inside the application without the need for additional software. This is a fantastic solution for growing companies that need to transition from QuickBooks Enterprise. 

Speaking of QuickBooks, you may have been wondering about the notable absence of QuickBooks Online (QBO) or QuickBooks Desktop on this list. Generally speaking, I never recommend a desktop product for small businesses. It is just not dynamic enough for company leadership to utilize to run their businesses. And while QBO is a good tool, it is not my favourite. We by and far hear from our clients that Xero is easier to use, and they like it better. In my opinion, we should recommend what small businesses will actually utilize. While we do work with clients on QBO and would not needlessly convert them to Xero, we prefer Xero. 

Payroll 

Most companies hire employees relatively quickly in their growth. To handle employees, you need to run payroll. I always recommend that companies utilize a full-service payroll provider from their first employee. Yes, it may seem like an additional expense when you, as the business owner, can handle pieces of it. Still, it is much less expensive than digging yourself out of a noncompliance hole that occurs regularly with do-it-yourself options. Trust me; it is worth the upfront dollars for peace of mind.  

Gusto
Great for companies up to 100 employees.

Gusto is a full-service payroll application that services every USA state. It combines streamlined technology, automation, and good design to service clients. Gusto will handle everything from employee onboarding paperwork to filing monthly/quarterly/annual reports with state and federal agencies to remitting the payments on your behalf. They also have upgrades to include integrated time tracking software, a Human Resources (HR) databank, and access to benefits advisors who can get your employee’s health insurance. You can even sign up for worker’s compensation insurance through them! Did I mention it is really pretty? Our clients’ employees love having their own portal to make payroll withholding changes, see their paystubs and W-2s, and access company benefits information. Gusto integrates deeply into Xero (you can even click a button inside Xero to log into Gusto). Gusto starts at $39/month plus $6/employee. Sign up here if you are a small business. Sign up here if you are a bookkeeping or accounting firm and want to see all your clients in one place. 

ADP
Great for companies with complex payroll needs and over 100 employees.

Yeah, I know; here I am, a tech-forward accountant recommending a traditional industry giant. I just have not found a new and sexy application that accomplishes what ADP can in a broad stroke. ADP has different programs geared towards different company sizes and can right-size the application you sign up for. They will file and pay all the taxes on your behalf and help ensure compliance. Additionally, they have best in class integrations with the core general ledger programs, including Xero and Sage Intacct. If Gusto cannot handle your complicated payroll needs, ADP + an add-on surely can. Prices range significantly depending on the size of the application you sign up for. They also have training, HR, and other benefits to utilizing their software. 

Seriously, do not try and learn payroll yourselves. It is relatively cheap to use a payroll service, and they do the heavy lifting. When you get to the point that approving payrolls, pushing hours into the software, registering with new states, and dealing with a bi-weekly responsibility becomes too much, that’s where High Rock steps in and utilizes these tools on your behalf.  

Accounts Payable and Expense Management 

Paying bills is a pain in the butt. Most companies pay everything by credit card in this day in age and then deal with the “forgot to cancel” expenses. I am grouping accounts payable and expense management here because it covers most areas of money going out. I will break down my favourite tools for businesses of varying needs and size. 

Divvy
Best for companies that love free software + rewards or companies in need of strictly enforced budgets. (Basically everyone.)

This solution scales up or down easily to handle anyone from a baby startup to an enterprise. The software that powers Divvy is free, and it is robust. It allows you to create virtual cards to handle subscriptions or one-off payments, inherently reducing the risk of the card number being stolen. It also gives you the flexibility to cancel that virtual card and not have to deal with fighting with vendors after the fact about when they inevitably charge you an extra month. Divvy gives you rewards – 1.5% at a minimum on any purchase and up to 7% on restaurants. Every team member with spending authorization gets a card, and you can set very clear budgets where they cannot exceed that spend for a specific category. Their software allows for receipt matching without significant manual intervention – you take a picture. 

Divvy can also do bill pay for you! You can push out payments via ACH with a one-level approval process natively inside of Divvy. This feature is handy if you use Divvy’s budgets and want to track against them across all expense spend. Divvy has another feature for expense reimbursement management, which I have not personally played with, but I hear they do a great job at it. This feature lets your team members submit for reimbursements, and you can push the reimbursements directly to them through the system. Expense reimbursement is the only feature you really pay for, and at $5/active user/month, it is a good price point. 

All around, Divvy offers fantastic software, a clear roadmap to even better software, and best in class small business credit cards. The only negative thing I can say is that they do not integrate with Xero yet – it has been promised in the next few months. But if you are a QBO user, sign up for Divvy right now! If you are an accounting firm and want to partner with Divvy, sign up here. 

Bill.com
Best for companies with complicated approval workflows.

Bill.com has been around for a long time. It has a market share on the bill pay function and even partners to white label their service through some major banks (Silicon Valley Bank and Bank of America are two of the largest). You can customize multi-step or departmental approval workflows and streamline many manual processes inherently in the accounts payable cycle. Bill.com will mail checks or send ACHs. You can also receive payments for accounts receivable. It is pricey, though, so I only recommend this solution when a company truly needs multi-step approvals and have complicated accounts payable. This application integrates seamlessly with small business accounting products (Xero/QBO) and mid-market products (Sage Intacct/NetSuite)

Xero Expenses
Best for teams under 20 members.

Xero Expenses is robust for expense reimbursement submission. The tool allows you to take pictures, it will automatically read and suggest coding, and then pushes the expense reimbursement into accounts payable. I recommend this for small teams because it is built into Xero and available without the per-user license fee that plagues most of the alternatives. The only downside is that it does not yet integrate with any payroll software for automatically pushing the reimbursement into the payroll run. You can automate pushing these into a bill pay solution and reimburse team members outside of payroll. However, it is a multi-step process either way and, therefore, not an ideal solution on the planet for larger teams. The time savings for small teams is fantastic, and it is a solid solution!    

RelayFi
Best for owner-operator businesses.

Relay is a new and awesome banking product. They provide a free business checking account for companies with some awesome technology behind it. The setup is online and takes about 15 minutes. It is easy, well designed, and integrated. Relay offers built-in virtual debit cards to use on various subscriptions (much like how I described you could use Divvy). While they are debit cards, Relay promises credit card level limited liability in the case of fraud. Relay has built-in bill pay that syncs to your core accounting system to identify bills that need to be paid. They can pay via ACH or check directly through the app or online web app. You can build in some simple approval processes as well. Considering all of this is built into your checking account, this is my favourite small business options for owner-operated businesses.

Routable
Best for small businesses who are not planning to be small for long.

Routable gives robust approval workflows similar to bill.com but at half the price. Routable allows for automation with both accounts payable and accounts receivable. It has best in class visibility into the stage in which any invoice is. It also has strong integrations into both Xero and QBO currently, with NetSuite in the works and plans for integration in Sage Intacct, Routable has quickly become a tool I believe in. This product was built with a price point small businesses can afford, and the functionality mid-sized companies need.
  

Covering these three areas with solid integrated technology is a great place to start. We will be writing more to elaborate on other cycles of accounting and what cloud accounting tools we prefer here at High Rock. Whatever you decide to go with, make sure you consider your current state and where you will be in the next few years. Switching core accounting technology is not an easy process, and it is best to set yourself up for long term success.  

 

 

Written by:

Liz Mason

Written by:

Liz Mason