5 Best Financial Tools for Small Businesses

January 18, 2021

Whether you run a small business or play a critical role within an enterprise operation, the keys to financial success are real-time visibility and optimization. The main drivers of these efficiencies? Automated financial tools. But with so many options available, it can be hard to know what the best financial software tools are—especially as a small business owner with limited time and resources. 

To that end, here are five common types of financial planning software to focus on:

  1. Accounting software
  2. Expense management software
  3. Payroll management  
  4. Budgeting tools 
  5. Vendor management

Accounting Software

Leveraging real-time accounting software is absolutely necessary to keep track of your business' finances in a streamlined manner. The types of accounting software available vary in scope and complexity. Some free software is available online to help small business owners with the basics of bookkeeping, whereas you may be able to find another accounting solution that is extremely customizable. If you are a small business owner, this financial tool will be essential for your overall operations. 

Although it depends on the accounting software provider you partner with, most accounting solution programs will come with baseline accounting capabilities like invoicing, expense tracking, and vendor or client management. That said, more robust accounting system software may also include more advanced features like: 

  • Multi-entity support
  • Mobile access
  • Automation of billing and recurring payments
  • Tax preparation
  • Payroll processing
  • Integrations with other programs like point-of-sale software, credit card processing, inventory management, ERPs, or Google Apps

Some types of accounting software solution options are also expressly designed to help within a certain industry—such as Blackbaud for nonprofits, Yardi for real estate and property management, and Cliniko for healthcare. These niche accounting programs are built with the specific industry-related accounting requirements and regulations in mind.  

Benefits of an Accounting Software Solution 

So, what's the ROI of choosing the right type of accounting software or financial tool?

  1. Lower costs – This financial tool is a small upfront investment that pays significant dividends over time. The costs of errors and reporting lag time are far greater than the initial purchasing price. In addition, the adoption of an accounting program allows your finance and accounting specialists to operate more efficiently and focus on tasks that actually require their expertise. 

  1. Improved accounting accuracy – Manual bookkeeping processes are predominantly done by hand. This increases the likelihood of human error, which creates a ripple effect down the line. As the New Economy points out: “When companies conduct their financial close manually, they can’t be sure if there have been missed tasks, data entry mistakes, or misstatements until they reach the end of the process.” When this tedious and error-prone process is digitized, you can ensure that the financial close is performed accurately and effectively. Accounting with this digitized platform makes it simple to make edits. So if you need to reclassify expenses, rebook accruals, or reorganize your chart of accounts, that’s easy. 

  1. Increased speed of completion – The Journal of Accountancy performed a survey in which 87% of respondents said they worked overtime during the financial close process, with the vast majority of them saying they were under pressure to close faster. This demonstrates how inefficient historical accounting methods have been, especially when compared to technologies that can facilitate a more rapid and efficient closing of the books.

  1. Easier tax filing – Filing business taxes can be a nightmare even when you know what to expect. Accounting software makes it easier to track your business transactions, compile the financial data, and then categorize it all in one place. By the time tax season comes around, your team won’t need to waste time tracking everything down. 

  1. Ease of generating financial reports – Accounting software makes it much faster and simpler to generate financial reports. With it, you can produce both summary and detailed level reporting, with specific dates. 

Best Types of Accounting Software

Depending on the size of your business, there are certain types of accounting software you should look into:

  • For small businesses – The go-to household names are QuickBooks and Xero. Xero focuses on usability and is the choice for most startups, whereas QuickBooks is the legacy market-leader. While both offer a host of features and services that streamline workflows and help you run your business more easily, QuickBooks often takes a slight edge thanks to its advanced reporting features and wider range of capabilities. Xero, on the other hand, is cheaper to start and offers a user-friendly minimalist accounting tool.  

  • For mid-sized businesses – As your business  grows, you may need to graduate to a more sophisticated accounting software. For that, there’s Netsuite and Sage Intacct. Both are cloud-based, all-in-one accounting software with more advanced features, customizability, and functionality than either QuickBooks or Xero can provide. Additionally, they have a host of integrations with other tangential products. Netsuite is better known as an all-in-one software suite, with both ERP functionality and an eCommerce platform. Sage Intacct, on the other hand, is a stand-alone, cutting-edge accounting system.  


Expense Management Software

Whether it’s meals, gas, rideshare, little expenses quickly add up. On top of that, SaaS creep, redundant expenditures, and other expense wastes can stay hidden without the proper tools. And that’s just the small expenses. You need to be able to track all of your spending, including vendor spend, travel and entertainment expenses, and more. 

Especially when your employees are virtual (or on-the-go), it becomes much harder to monitor, manage, and control their spending. Per Entrepreneur

“If you want to put more money into your bank account, you need to find out where your business is wasting money. Tracking your expenses also ensures that you can reach your financial goals. By understanding your spending habits, you can make the appropriate changes so that you can ultimately achieve these aims.”

With the right expense management systems, you gain greater control over spending, reduce manual data-entry, and save time on back and forth expense requests and approvals. It helps both your employees and your finance and accounting teams save time, especially when it comes to expense reconciliation:

  • For employees – Scanning, uploading, and organizing receipts is a hassle that drains time and causes frustration. Plus, employees have to spend valuable work hours filing expense reports, then wait for expense report approval and reimbursement. This time lag in reimbursements creates an odd dynamic in which the company owes the employee.

  • For accountants – Accounting teams also waste time having to track down receipts or engage in back and forth communication with employees about filing their expense reports correctly. Additionally, the manual-based reconciliation process is often slow and full of errors. Accounting teams have to spend time manually matching each receipt with the expense report, inputting the data into excel spreadsheets, and following up on errors or duplicate expenses. 

The best expense management software automates much of these burdensome processes, alleviating frustration, expediting the month’s end close, and optimizing workflows. 

The Future of Expense Management Systems 

Historically, expense management was a separate piece of software you actually needed to purchase. But these days, there are finance tools that have consolidated and automated expense management. They are able to integrate directly with other key finance tools such as accounting software. Better yet, it can be consolidated and automated altogether within a corporate card platform.

For instance, certain corporate card programs like Ramp come with built-in expense management features such as instant reconciliation, auto-categorization, automatic receipt matching, and accounting integrations. 

By replacing slow, inefficient expense reports with expense management solutions, finance teams are able to:

  • Save time with their month’s end close 
  • Gain greater control over their spending
  • Reduce frustrating manual processes and data entry 
  • Increase real-time visibility into company spending
  • Improve financial reporting accuracy 

Payroll Management

The more employees you have, the harder it becomes to manage the company’s payroll. But the process can be tricky even for small companies. 

For most businesses, personnel costs, payroll, and benefits represent the largest expense. Payroll management systems empower business owners to better manage employee payment and taxes.

A fully integrated system creates a single place where data can be stored and analyzed. This reduces the overall management complexity and ensures consistency across the board. Payroll management can increase efficiency and benefit your company in a number of ways, including: 

  • More efficient payroll – When managing payroll, you need to consider the various taxes, hours worked, benefits, and retirement funds. The calculations need to be done quickly and accurately. Errors are costly and time consuming. Per Forbes, “In 2013 alone, the IRS issued $4.5 billion dollars in penalties to businesses who incorrectly calculated their payroll taxes.” Automation helps to ensure that all the critical factors and rules are taken into account when paying employees. 

  • Simplified tax filing – Whether it’s knowing which tax deductions to consider or keeping track of all the right tax documents—taxes are complicated. And if you operate in multiple states, there’s even more you have to manage. Automated payroll takes care of the updates in tax policy so that you hit your deadlines and correctly calculate withholding tax for employees.

  • Benefits management – Most payroll providers now partner with a benefits provider and manager. The best programs provide an all-in-one package to make it easier for small businesses to handle.

  • Easy reports – It’s much easier to make calculated payroll decisions or estimate labor costs with automation on your side. Automated payroll software provides easy-to-create reports, which you can leverage to make better business decisions. 

  • Visibility for employees – The best payroll and benefits management software has an employee portal where they can view their prior pay stubs, benefits package, and more. This self-service gives employees autonomy to view their paychecks and personal information when they want. 

  • HR packages – Some companies package in other HR-related items, such as PTO requests and approvals, PTO tracking, and compliance training, so you don’t have to integrate with an HR software. 

While there are several automated payroll management systems available, here are a few worth mentioning. For small SMBs, Justworks has become quite popular; it provides simplified software and expert support for payroll, benefits, HR, and compliance. Other options also worth looking into include Rippling and Zenefits. 

Budgeting Tools 

Looking to manage your budgeting? To be successful, you must build a budget and carefully stick to it. Ideally, you want an FP&A software that empowers your financial planning and analysis team, allowing you to manage cash flow and prepare for the month, quarter, and year ahead. 

This typically isn’t offered as a separate automated tool. Rather, budgeting is handled manually by financial analysts who work across a ton of data in Excel files, analyzing historical to actuals, calibrating top line and bottom line goals with leadership, and building pro forma financial statements manually. 

New tools are popping up to make the budgeting and planning process a bit easier. With a program like Planful, you can provide your team with structured and dynamic planning systems. These help you make more informed strategic decisions that are closely aligned with your budget. 

Additionally, automated budgeting software can help you with: 

  • Enhanced reporting – Detailed reports, custom dashboards that highlight KPIs, and the ability to run “what if” scenarios help you better prepare your future budgets. 

  • Rolling forecasts – Replace annual planning cycles with rolling forecasts so that you can respond to changes as they happen. 

  • Increased reliability – All it takes is one error to throw off an entire budget’s spreadsheet. Automated systems reduce the issues related to manual data entry and calculations. By eliminating manual processes, you save time, cut down on errors, and help the business make decisions faster. 

  • No more guesswork – Often, paper-based budgeting systems wind up being retrospective. By the time the forecast is ready, it’s already obsolete since the situation on the ground has changed. If you want to make the most informed decisions, you need to have the most accurate and up-to-date information.  

Traditionally, budgeting is kept within the realm of Excel spreadsheets until an enterprise reaches a certain size and maturity. That said, there are smaller companies who find value in these tools.

It ultimately starts with simplifying the data collection process for budgeting. For example, when utilizing the real-time spend tracking built into the Ramp card, financial analysts can see how much employees are spending on the corporate card at any time. This ensures greater control over the budget and over who’s spending what and where. 

Vendor Management Tools 

Dealing with various vendor contracts is no simple task. 

Considering the number of software tools listed above—each one of these costs money, and each one needs to be tracked. That’s where vendor management software comes in. With it, you can eliminate wasteful and redundant spending and prevent SaaS creep from eating your bottom line. Additionally, with vendor management you can:

  • Get a bird’s-eye view on all vendors and payments – Automatically identify, collect, and manage all vendors and contracts in one place. This gives you notifications when payments are due or how much has been spent with vendors over time. 

  • Streamline purchasing – Ideally, you want to be able to centralize all new vendor requests and approvals, this allows IT teams (or various department heads) to add the services they want in a controlled manner. 

  • Eliminate SaaS creep and other types of waste38% of all software licenses are inactive each month. You need to be able to spot duplicates or inactive programs and set constraints around vendors, especially the new ones. 

  • Work with the best vendors – It’s important that you see which vendors you’re using frequently and benefiting from the most. Armed with vendor utility and usage metrics, you can see which vendors provide a positive ROI and which ones could be cut.  

Ramp: A Corporate Card and Financial Software Rolled into One 

There are all sorts of financial accounting tools for business decision making that can help elevate your small business. Whether it’s automated accounting, expense reporting and reconciliation, or vendor management, the possibilities for automation and optimization are seemingly endless. 

But wouldn’t it be ideal if you had all of those capabilities rolled into one business card? 

This is where Ramp stands out. It’s not just a powerful corporate card; Ramp comes packed with a range of powerful software designed to help your business thrive. Additionally, it comes with built-in integrations with other top softwares such as Quickbooks, Intuit, Xero, as well as communication platforms like Slack. 

With the Ramp card in your arsenal, you can take control of your finances and optimize your reconciliation and accounting processes. 


The New Economy. Top 5 reasons automation should be used for mitigating risk in a financial close.

The Journal of Accountancy. Overtime and stress are common during month-end close processes.

Entrepreneur. Here's Why It Pays to Track Every Tiny Business Expense.

Forbes. Looking for Payroll Services? Here are 5 Things to Consider.

Zylo. 5 SaaS Stats to Drive IT Strategy in 2020.

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Streamline approvals.
Review requests, pre-approve expenses, and issue general expense cards in a few clicks – or directly in Slack. Delegate approvals and empower your team leads to spend on the things they need and control their team’s expenses.
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Issue instant cards.
Unlimited virtual and physical cards with built-in spend limits, instantly available for everyone in your team. Define spend rules and let your smart cards enforce your policies automatically. No more surprises or under-the-radar spending.
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See spend as it happens.
Stop waiting on monthly statements or manual spreadsheets. Find, browse, and download real-time transactions from any employee, department, or merchant – on any device.
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Close your books 5x faster.
An accounting experience by finance teams, built for speed and efficiency. Automate manual processes and start enjoying instant reconciliation – Ramp does all the heavy lifting.
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Trim wasteful spend.
Ramp analyses every transaction and identifies hundreds of actionable ways your company can cut expenses and alerts your team via email, SMS, or Slack. It’s like having a second finance team, laser-focused on cutting costs.
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Consolidate reimbursements.
Ramp makes it easy to reimburse your employees for any incidental out-of-pocket expenses. Review, approve, and pay employees back for anything that didn’t make it onto a card with the rest of your Ramp transactions.
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