Zoho Books

Zoho Corporation is not a dedicated financial services company like Intuit: it’s a developer of very good integrated online productivity[1] applications. One of these is Zoho Books, which assembles tools that meet the lion’s share of small business accounting[2] needs. Zoho Books’ usability, flexibility, and depth in standard bookkeeping areas—sales and purchases, time- and project-tracking, and inventory management—equal and sometimes surpass what is offered by competing websites. It also provides more help resources than most rivals, which is critical for accounting solutions. Among small business accounting websites, Zoho Books is an excellent value, though its very limited payroll integration make it a non-starter for most companies with employees.

Similar Products

After a 14-day free trial to Zoho Books, you can subscribe to the Basic Plan for $9 per organization per month, which limits you to 50 contacts, one user plus an accountant, and five automated workflows (more on that later). The supported features include invoices, expense tracking, projects, and timesheets. The Standard plan ($19 per organization per month) gives you higher limits on everything in Basic, and adds bills, vendor credits, and reporting tags. It also offers two new tools: multi-level purchase approvals and integration with Twilio (allows you to automate SMS messages to customers). Professional ($29 per organization per month) supports unlimited contacts and users and 10 automated workflows per module, in addition to purchase orders, sales orders, and inventory tracking.

That pricing compares favorably with that of our Editors’ Choice Intuit QuickBooks Online[3], which starts at $25 per month for its Simple Start plan. Its next tier up is Essentials, which adds billing, multiple users, and time-tracking capabilities for $40 per month. The $70 per month Plus plan offers full project and inventory tracking. Sage 50cloud[4] starts at $50.58 per month. Wave[5] is free to use, though it charges fees for payments and payroll.

Since I last reviewed it, Zoho Books has incorporated dozens of small changes that improve flexibility and usability, and a few major changes, like Zoho Mail and Zoho Cliq (group chat tool) integration; an exclusive inbox for expense receipts and other documents; and more customizable reports.

There is one area where Zoho Books doesn’t meet or exceed the standard set by Xero and Editors’ Choice tool Intuit QuickBooks Online, but it’s a critical one for some companies: As mentioned earlier, payroll[6] is only available for California and Texas; New York is up next. Zoho Books doesn’t even integrate with third-party payroll providers like Gusto This is a serious deficit for an accounting solution suitable for companies large enough to have employees. But in every other area—contact and item records, transactions, inventory management[7] and project management[8], customizability, automation, and user interface—it’s among the best I’ve reviewed.

Zoho Books - Edit Item

Generous Setup, Import Options

Zoho Books’ setup feature walks you through a series of screens after you create an account, helping you configure some of your personal settings. You can revisit the settings options later if you prefer, though it’s a good idea to supply this information upfront.

First on the list is the company profile, which includes several screens of details like contact information, entity type, and sales tax (Zoho Books can be integrated with industry standard Avalara AvaTax). You can then select the tool’s “modules” you’ll be using, like Estimates, Timesheets, and Sales Orders. You’ll choose a payment processor if you have or want one (11 are supported, more than any competitor offers). Then you’re taken into the main tool, but there’s additional setup help for options like providing opening balances, configuring your bank connection(s), and inviting users to serve in specific roles (Admin, Staff, TimesheetStaff, and Staff—Assigned Customers Only).

After that, you’re on your own to explore the items in the Settings menu, which is a massive list with several sub-lists. No other small business accounting website breaks down its functions for setup in this detail. This means that you really must explore the settings for every module you plan to use, or you won’t be taking full advantage of Zoho Books’ features and flexibility. Where Items are concerned, for example, the tool will not automatically warn you when your stock levels have reached the reorder point. You have to check a box to request that.

Part of setup involves creating records for contacts and items. You can do this as you go along, but you’ll need less time to create transaction forms if you’ve done this ahead of time. You can, of course, enter everything manually, but there is little data you can’t import into Zoho Books. The tool allows you to download sample files to ensure that your mapping is correct, and then import contacts, item records, and sales/purchase transactions in CSV and a handful of other global formats (the latter feature is unique to Zoho Books among small business accounting services I tested).

Zoho Books - Edit Log Entry

Excellent User Interface, Navigation, Help

Zoho Books’ dashboard provides more financial information than does the dashboard in Kashoo[9] but it’s not as interactive as Xero’s. Current and overdue receivables/payables and cash flow appear at the top in both numbers and graphs. Below that is a customizable chart comparing income and expenses, and an accounting of your top expenses[10]. Project status and account balances, with links to transaction registers, round out the screen’s data.

Zoho Books’ user interface is exceptionally clean, attractive, and easy to understand. The left vertical pane displays navigation links to Zoho Books’ functional areas: Dashboard, Items, Banking, Sales, Purchases, Time Tracking, Accountant, and Reports. Some take you straight to a working screen, while others display a submenu of options. An effective combination of buttons, drop-down lists, fill-in-the-blank fields, and checkboxes make navigation and data entry options quite clear.

Click the small gear icon in the upper-right corner and a menu opens, displaying links to setup pages for numerous features. These include currencies, taxes[11], templates, reminders, and automation. There’s also a link to a page that lists all of the tight built-in integrations that Zoho Books has with other applications (besides its own Zoho CRM, Zoho Projects, Zoho Expenses, and others), like Office 365, Google G Suite (fetch customer-only Gmail), Yearli (1099 filing), Slack, and Square.

You’ll also want to click the link to the service’s Preferences before starting up your financial operations. Among many other things, you can turn off some of the more advanced modules, specify client portal settings (unusual at this product level), create multiple custom fields for almost every type of record and transaction, and establish settings for delivery notes and packing slips (two tools not found in most competitors’ tools).

A link to help resources also appears in the upper-right part of the screen. Zoho Books’ numerous guidance tools (like FAQs, documentation, and forums) exceed those of Xero[12], which has some of the best support options I’ve seen. You can also contact experts via chat, phone, and email. But Zoho Books does not have nearly the network of experts at its disposal that QuickBooks and Xero have built up over the years. That said, its pool is respectable for a product that only came out in 2011.

Zoho Books - Invoice

Impressive Records

Contacts can be customers or vendors or both. You enter your primary contact details at the top of each record, then move down to a tabbed window below that lets you toggle between tax and payment details, address, contact persons, custom fields, reporting tags, and remarks. No other small business accounting tool we’ve looked at lets you create up to 10 custom fields for records, and not one of them supports such thorough profiles for contacts.

Once you’ve built some contact records, you can view each in a window that is, once again, better than Zoho Books’ rivals. Key contact information is displayed on the default screen, as well as numbers and graphs for receivables/payables and income/expenses—kind of a mini-dashboard for each customer. There’s also a timeline—a kind of audit trail—for the current contact and a box with additional details like Currency and Portal Language (Zoho Books now lets you communicate with contacts in their preferred language). Tabs here open other types of related content, like Sales (by form), emails (you can connect your Gmail, Outlook, or Zoho Mail account), and Statements.

Inventory management capabilities also fare well against the competition. Item records contain standard fields (sales and purchase description, rates, and accounts), but you can also create and use units of measure. If you indicate that you want to track inventory, you can complete fields for opening stock, opening stock rate per unit, reorder point, and preferred vendor. Invoices then display the number available when you enter an item. You can also easily set up price lists and adjust inventory levels here. QuickBooks Online offers similar inventory flexibility, and it goes a step beyond, allowing the bundling of items (assemblies). You have to subscribe to Zoho Books’ Inventory add-on to get this feature.

Zoho Books - New Custom

Transaction Forms and More

Zoho Books offers more transaction types and more flexibility within the forms themselves than any other product I reviewed; it’s even improved invoice templates since the last time I looked at it. Beyond the standard sales forms that competitors support, it includes retainer invoices, delivery notes, and packing slips. Invoices contain fields for shipping charges and adjustments in addition to discounts and sales tax. Purchase transactions—expenses, bills, purchase orders, and so on—are similarly detailed and flexible. Like records, transaction forms can contain up to 10 custom fields, which is unique to Zoho Books.

No one else at this solution level offers automated workflows like Zoho Books does. This tool comes with a bit of a learning curve—in fact, it’s fairly complex unless you’ve worked with multi-segment formulas before—but it can be quite useful. You could, for example, specify that you want the sales manager to receive an email alert when an estimate amount is changed by more than $250. That’s a simple example—you can create formulas with even more conditions and results.

Zoho added document management[13] to its expansive toolbox last year. Scan documents like bills and expense receipts and either email or upload them to Zoho Books—or have clients email them directly to your new scanning inbox. The tool then uses OCR to read the date, merchant name, amount, description, and expense category (after Zoho Books recognizes a pattern for categorization or just automatically “knows”) and enters that information in transaction forms; you complete the rest. 50 scans per month are included in your subscription fee, but you can purchase more. No other product at this level offers such a feature.

Zoho Books - New Workflow

Projects and Timesheets

Zoho Books integrates well with Zoho Projects, but you can do a lot just by using the main app’s tools. To define a project, you’ll give it a name, select the billable customer, and choose a billing[14] method. You can then add a budget, additional users, and individual tasks. Each project has its own home page, from which you can add hours worked (automatically timed or entered manually) and related purchases and sales. You’ll be able to tell at a glance whether all billable hours have been billed; where you stand with your budget; and what your profitability is. You can require approvals by the project manager or client and set a maximum number of loggable hours per day.

Tasks on the timesheet are always linked to a customer and project, which would be a problem if you were using time-tracking in conjunction with payroll or to bill customers for one-off jobs. So if you need that kind of flexibility, you’ll need to subscribe to a tool like Editors’ Choice FreshBooks[15].

Better Reports

Considering Zoho Books’ depth, flexibility, and integration abilities, you’d expect that it would offer an equally impressive slate of reports. And you’d be right. The tool offers dozens of reports in every category, from sales and purchases to receivables and payables to projects and activity. There’s a group of advanced reports that’s designed for accountants; it includes an enhanced General Ledger, Journal Report, and Trial Balance.

General reports are now more useful because of improved views and filters that support better customization. You can modify reports by date range and usually one or more additional views (like transaction type, status, group by), but it’s the new advanced filters found in some reports that really let you pare down your data set to just the right result. You first select a filter, whose options of course change for each report, and then a “comparator” (like “is” or “contains”), and then your target value. You can also show or hide columns for many reports.

These improvements don’t take Zoho Books to QuickBooks Online’s level in this area, but they improve the usefulness of reports. The tool also allows you to schedule report distributions by date and time, sending them to email recipients in PDF, CSV, or XLS format.

Excellent Mobile Access

Zoho Books displays as much excellence in its Android app[16] and iOS app[17] as it does in the browser-based version, though I found the iOS app more well-constructed and convenient. A multi-screen dashboard displays charts for elements like Total Receivables, Cash Flow, and Income & Expense. Contact records, which are quite robust in the browser-based version, are exceptionally well executed in the mobile app. Open one, and you’ll instantly see contact information and the receivables/payables balance. Icons on this screen let you call, email, or message the contact, while another icon takes you to links for creating new transactions, accepting payments, and more. Extra menus on both versions display additional options.

Other tools are just as deep, like the app’s product records, bill-pay, time tracking, reports, and projects. In fact, you could probably run your business from your phone if necessary—the apps are that comprehensive. The Android and iOS versions have different navigation systems but offer a similar set of tools. The iOS app uses a bottom-of-the-screen toolbar, while Android works primarily from a vertical menu; both are quite effective and attractive.

A Great Value

Zoho Books accommodates a wide variety of business types. A sole proprietor could use it without having advanced features get in the way, but those advanced features make it an excellent choice for a larger business—without employees, that is, since there’s no path to payroll. The service offers several unique features not found in competitors, such as extensive custom fields, a dedicated inbox for expenses and other documents, and automated workflows.

What Zoho Books does, it does extremely well. If you’re in the market for a new accounting solution and you already have a payroll service you’re happy with (and don’t mind not being able to integrate payroll with accounting easily), Zoho Books is well worth considering.

QuickBooks Online remains our Editors’ Choice, though. It’s more expensive than most, yes, but its tiered service levels make it possible to only buy what you need. It’s been around since the early 1990s, and it’s published by a trusted financial software company. It has millions of users and a strong network of individual advisors. QuickBooks Online is the most comprehensive, flexible, extensible small business accounting tool available today.

References

  1. ^ productivity (www.pcmag.com)
  2. ^ small business accounting (www.pcmag.com)
  3. ^ Intuit QuickBooks Online (www.pcmag.com)
  4. ^ Sage 50cloud (www.pcmag.com)
  5. ^ Wave (www.pcmag.com)
  6. ^ payroll (www.pcmag.com)
  7. ^ inventory management (www.pcmag.com)
  8. ^ project management (www.pcmag.com)
  9. ^ Kashoo (www.pcmag.com)
  10. ^ expenses (www.pcmag.com)
  11. ^ taxes (www.pcmag.com)
  12. ^ Xero (www.pcmag.com)
  13. ^ document management (www.pcmag.com)
  14. ^ billing (www.pcmag.com)
  15. ^ FreshBooks (www.pcmag.com)
  16. ^ Android app (www.pcmag.com)
  17. ^ iOS app (www.pcmag.com)

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