One of the questions I get asked the most is, “what is the best bookkeeping software/app for my business?”. Truthfully, the answer to this question depends on many things. The variety of applications currently available to small businesses has grown exponentially making it difficult to know where to start. To muddy the waters even further, there are many Facebook groups, bloggers etc… making recommendations (some legitimately others looking for affiliate marketing income), but they are not financial professionals and should probably not be handing out financial advice. With this in mind, I will be doing a series a posts reviewing various bookkeeping applications. As an accountant, I have some definite biases, but I will do my best to lay out the pros and cons of each application.
I chose to start with a bookkeeping application called Outright or GoDaddy Online Bookkeeping. This app seems to change it’s name on a regular basis. It was called Outright when I first started looking at it for this review and now I see it has changed to GoDaddy Online Bookkeeping. Prior to being called Outright, it was named GoDaddy Bookkeeping. Since most of the website continues to refer to it as Outright, I will too. I am starting with this product as it is really geared towards micro businesses that sell online through sites such as Etsy, Ebay, Amazon, etc…
My honest first impression is that GoDaddy is primarily focused on being a web hosting company and therefore do not really have the financial chops to develop and sell a proper bookkeeping application. I won’t even go into their marketing approach, which I personally find demeaning to women.
Outright costs$9.99 per month for the basic service and $19.99 per month for premium service. The only difference between these two levels (besides the $10.00 per month) is that premium allows you to do recurring invoices. From a strictly cost perspective, this is neither the cheapest nor the most expensive option out there. From a functionality perspective, it is actually very expensive (see below).
Links to Selling Platforms and Others
Outright was obviously developed for GoDaddy’s hosting clients that sell online. The application has the ability to connect directly to many selling platforms such as Etsy, Ebay and Amazon. You can also link it directly to your Paypal account, bank accounts, Discover, Stripe, Dwolla and Amex. This is a very good feature for the online seller, as it eliminates the need to manually enter sales transactions from these platforms. At this time, they do not link with Shopify or Stitch.
They have a very good forum where you can post questions and request features that you would like to see implemented. They are active on the forum and will give you feedback on timing for a requested feature. Unfortunately, they remain committed to keeping the application incredibly simplistic and have no plans to implement the majority of these requests.
No Inventory Tracking
Although Outright tells you that the application simplifies your life by providing a worksheet to give to your accountant for tax purposes, the truth is that the worksheet is not sufficient for your accountant to prepare your taxes. Both your accountant and you (if you want to run your business most profitably) will need to know your Cost of Good Sold (COGS). Outright does not have the ability to track inventory, therefore does not have the ability to calculate COGS. You will have to keep track of this yourself on Excel or some other package. This is a very serious hole in this bookkeeping application’s functionality. How you can program an application aimed at businesses that sell products without providing a means to track inventory, is beyond me. According to the folks at Outright, they have no intention of adding this feature in the future.
No Reconciliation Feature
Outright does not have an account reconciliation feature. That means it does the ability to verify transactions is not built into the software. Transactions will be posting from various sources such as Ebay, Paypal, your bank account, etc… but there is no way to reconcile them in order to ensure they are accurate. Therefore, you cannot be sure your books are accurate. It does not matter if you are a micropreneur or a multi-national conglomerate, reconciliation of your bookkeeping/accounting transactions is required- it is not optional! It is actually much more important to a small business owner to have this feature built into their bookkeeping software than it is for an accountant, but Outright claims they do not want to complicate things for the small business owner.
No Balance Sheet
Most small businesses will never need to report a balance sheet on their tax return. This does not mean that you do not need to maintain some records of your business that are technically part of your Balance Sheet, such as your bank account, inventory, owner’s equity. The lack of Inventory accounts and Bank Account reconciliation is no doubt related to the application’s inability to account for balance sheet items.
I have several other issues with the software such as how it handles transactions that a user tags as personal expenses and a HIDE expense category which I suppose is there to make up for the lack of a reconciliation feature.
While Outright may sound good because it is simple, cheap, and oh so slick because it links to Ebay, Etsy, etc… the truth is, you can do better. Outright lacks so much essential functionality that you will have to use another application, a manual spreadsheet, or pay your accountant to keep track of the things that Outright cannot. So while it may appear cheaper than other systems at first glance, it will actually cost you more in the long run.
Bookkeeping is not just about having the information to prepare your tax return. It is really about having information to help you run your business. Knowledge is power and a good bookkeeping system can give you that power.