Comparing Online Accounting Software

Michael MicheliniBlog, Corporate, Taxes, Upkeep0 Comments

Setting up a Hong Kong company and wondering what is the best online accounting solution? We’re tech geeks too, and we want to keep everything “in the cloud”. Not only because we’re geeks, but because we have team members around the world.

Today, let’s dig into the top accounting software and see what is the best one for you.

Quickbooks Online Cloud Accounting

First is Quickbooks, been around forever. I remember using this when it was a desktop software I had to install on my laptop back in 2004!

It has grown since then, and their big focus is the Quickbooks online. They entered the Hong Kong market in spring of 2015 and have made some localizations. They have contacted me, love this blog, and trained us to be a Quickbooks Pro Advisor. But we still can help clients who use other accounting software and don’t want to be biased in our advice.

The biggest one to note is that they support integration with HSBC Hong Kong! For both business as well as personal banking. Why is this a big deal? Well, for those who delegate their bookkeeping to someone online, it is a bit of an extra step to have to login to HSBC online and download the statements and then pass to your bookkeeper. Or you can add them as a user, but it is a bit of a headache with ordering a security device and mailing to their home.

By having HSBC HK integrated in Quickbooks, you can “oAuth” it, or authorize Quickbooks to pull the data from your online banking. This way, your bookkeeper doesn’t need to login to your own online banking, and you also don’t need to login and download the statements (or csv).

Yet some readers have other banks as business banking – and unfortunately there is not yet an automatic integration. Stay tuned, let’s hope Hong Kong banking gets more tech friendly soon!

Xero Online Accounting

The second one is also a top choice, Xero. A newer kid on the block, they are very product focused and online centered. Built for online, they have invested a lot in a much more intuitive user interface.

The price is a bit higher than Quickbooks (looking at both company’s multi-currency), but some readers prefer Xero because it is more straightforward and intuitive.

But the drawback is it doesn’t integrate with HSBC HK. This was something Quickbooks tells me they work with very hard at securing. So for you to work with an online bookkeeper, you would need to add them as a user to your business online banking, or send them your monthly statements by email or Dropbox (for example).

UPDATE Sept 2017: Xero now integrates with HSBC HK. Thanks for the tip Lucian!

Quickbooks vs Xero

A friend and reader, Marcel Ekkel – had this to say:

Few cents… xero is good for plugins, but then again it needs them. For example it doesn’t support project based working out of the box which quickbox does. Albeit with a silly workaround.

Xero supports asset register out of the box which is handy if you have a good number of capital expenses like computers, furniture etc that you want to keep track of for accounting purposes to cover things like depreciation.

Both rely on external systems for payroll but now both have options to integrate with systems that handle all payroll related activities in line with Hong Kong law.

A deal breaker for some could be that to my understanding quickbooks does not have a full integration with stripe as it prefers their own payment gateway for handing this … for a fee of course.

Xero does provide a bidirectional stripe integration.

Both have their own apps that one can use for mobile admin. I haven’t digged into those to see the difference.

I use Expensify to keep track of expenses which I then can charge towards a specific project quite easy. I use quickbooks…

Wave App

This is an even newer online accounting software and has a free version. Therefore tons of people have rushed in to take part.

To be honest, I haven’t had a chance to dig into this one too much. But some are using it and having success.

Excel Spreadsheets

Here is the “beast”, the excel spreadsheets. Yes, these have been around forever. Even the first desktop accounting software systems set out to destroy people from falling back to Excel to keep track of their business cashflow. Yet people still often default to keeping a spreadsheet of their company activity.

I have seen some pretty complex spreadsheets with Macros (programming in Excel) and lots of formulas from different cells and different tabs to one another.

Maybe this works for you, and yes it is free – but there are a couple of issues I advise against this

  • It’s hard for your accountant to know your Excel system. Even if you don’t use the accounting system that your accountant prefers, it is still possible for them to figure out the other systems. But excel isn’t a system, well, it is just your system! So you’ll have to explain this setup to accountants over and over again if you switch or shop around.

  • It’s hard to share online. Sure you can use Google sheets or you can sync an excel by Dropbox. Yet things can get out of sync when working with multiple people. Duplicate files, offline sync messing things up, and then probably you will need to export to your accountant after anyway.

Just Keeping The Monthly Statements and Invoices

The last option is to not keep books, and simply keep records of all your statements, invoices, and receipts. Of course I’m not going to advise you on this one. Well maybe I will.

How much activity is your business doing? Some clients we work with are not doing a lot of transactions. For example they are doing B2B trades from China to Southeast Asia, and to their home country’s market in Europe. So they are buying 100,000 pieces at X and selling 100,000 pieces at Y. Doing this once a month or even less.

In this case, sure, keeping invoices and monthly bank statements may be enough. Yet it would still be helpful for you to keep an Excel sheet to keep a running total of your profit and loss. Yet for a HK accountant to do the audit, sure you can just send us your statements and invoices and we will make it work.

What Will You Use? What Are You Using?

So I hope today’s overview of different accounting software for your Hong Kong limited company helped you out. Now it is your turn. Let us know what software you are using? How is it going? Had a bad experience with a software on this list?

Maybe there are some solutions we missed. I know some people use Freshbooks, but that seems primarily for US based companies as far as I’m aware.

Let’s hear some comments below! And to our mutual success in international business!

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