How to Select the Right Accounting
Software
for Your Business in India
By: Sukhvinder Singh Bhatia
One of the biggest challenges
accountants faces is selecting the right accounting software. For me, it’s like
buying a car - sometimes it comes as part of a package (like in mergers and
acquisitions), but otherwise, it’s a deliberate choice. If you opt for a small
car (low capital expenditure, or Capex), it fits your budget and offers lower
maintenance costs (operational expenditure, or Opex). You could also lease it -
like Tally Silver at ₹750/month or Tally Gold at ₹2,250/month. Beyond cost, you
need to consider factors like parking space (data size), family members (number
of users), and whether you’ll drive it yourself or hire a driver (internal IT
team vs. outsourcing).
Here’s a detail of some popular
accounting software options in India:
- TallyPrime (formerly Tally ERP 9)
v Overview:
The most widely used accounting software in India, especially for small and
medium-sized businesses (SMBs). It’s a desktop-based tool with robust Indian
tax compliance features.
v Pricing:
Starts at ₹22,500 for a single-user license (Silver); ₹67,500 for multi-user
(Gold), plus annual maintenance and GST.
v Why
I Like It: My favorite for over 20 years. Its strength lies in its
simplicity. Beyond accounting, it’s a go-to for business plans, branch/company
consolidations, and even for accountants less skilled in Excel. It’s highly
customizable with TDL add-ons. Think of it as the Maruti or Tata Cars -
everyone can learn and operate it with minimal training.
- Busy Accounting Software
v
Overview: A desktop-based solution with
emerging cloud features, popular for inventory-heavy businesses. A strong Tally
alternative with detailed inventory and tax capabilities.
v
Features: GST billing/e-filing,
multi-company accounting, inventory management, and financial reporting.
v
Pricing: ₹9,999 (Basic) to ₹19,999
(Enterprise) annually.
- Marg ERP
v
Overview: Ideal for accounting and
inventory, especially in pharmaceuticals, retail, and manufacturing.
v
Features: GST compliance, invoicing,
inventory audits, and multi-currency support.
v
Pricing: ₹5,400 (Nano) to ₹25,200 (Gold).
- Vyapar
v
Overview: A mobile and desktop solution
for small businesses and retailers. Simple, affordable, and great for small
traders.
v
Features: GST invoicing, inventory
tracking, payment reminders, and offline functionality.
v
Pricing: Free Basic version; Gold Plan at
₹4,299 (gross ₹8,299).
- SAP Business One (SAP B1)
v
Overview: A comprehensive ERP for SMEs,
offering more than just accounting. It’s like buying a 2BHK in a posh society
when a 3BHK or 4BHK is out of reach.
v
Features: Financial management (journal
entries, AR/AP), GST compliance, inventory, CRM, sales, purchasing, and
analytics. Scalable and customizable.
v
Pricing: Professional License at
₹99,000/user; Limited License at ₹50,000/user (e.g., finance/CRM). Annual
maintenance is 17% of license cost.
v
Best For: Growing SMEs in manufacturing,
trading, or retail.
- SAP R/3 ECC (SAP ERP Central Component)
v
Overview: A legacy ERP for large
enterprises, launched in 1992. Robust and modular, it’s still used widely
despite SAP pushing S/4HANA.
v
Features: Covers financials (FI/CO),
materials management (MM), sales & distribution (SD), production planning
(PP), and GST compliance.
v
Pricing: High-cost, custom pricing (often
lakhs or crores annually).
v
Best For: Large organizations (e.g.,
manufacturing, automotive, cement). Mainstream support ends in 2027, with
extended support at a premium.
- Zoho Books
v Overview:
A cloud-based solution from Indian company Zoho, popular with startups and
SMBs.
v Features:
GST filing, expense tracking, invoicing, inventory, and real-time reporting.
Integrates with Zoho tools.
v Pricing:
₹749/org/month (Standard, billed annually) to ₹7,999/org/month (Ultimate).
v Why
It Stands Out: Simple, mobile-friendly, and usable even by non-accountants
with business acumen.
- Oracle NetSuite
v Overview:
A global cloud ERP with strong accounting features for larger Indian firms.
v Features:
Financial management, GST compliance, multi-currency support, and advanced
analytics.
v Pricing:
Custom, typically higher than SMB tools.
v Best
For: Enterprises with complex or international operations.
- JD Edwards EnterpriseOne (JDE)
v Overview:
An Oracle ERP for mid-to-large businesses with strong financial capabilities.
v Features:
General ledger, AR/AP, fixed assets, job cost accounting, inventory,
procurement, and manufacturing.
v Pricing:
Custom, depends on users/modules.
v Best
For: Industries like manufacturing, construction, and distribution.
There are many other options, but
these are ones I’ve hands on experience or know well. For more details, a quick
Google search will help. Also, many companies get software developed for their
specific requirements. I have also observed many large organisations using two
software simultaneously like SAP and Tally. There is no perfect software. Tally
is favourite of Accountants, whereas IT team love Zoho/Odoo or SAP where they
can use their skills. Top leaders rely on high end – ERPs.
Also Choosing the right
accounting software is a critical decision for any business, whether you're a
small startup, a growing midsize company, or a large enterprise. The right tool
can streamline financial processes, improve accuracy, and provide valuable insights
into your business’s performance. However, with so many options available, the
selection process can feel overwhelming. Before you finalize the software,
analyse the following points:
1. Assess Your Business Needs
First identifying your business’s
specific accounting requirements. Consider the size of your business, the
complexity of your financial transactions, and your industry. For example:
v Small
Businesses: You might need basic features like invoicing, expense tracking,
and simple financial reports.
v Growing
Businesses: Look for scalability, multi-user access, and advanced reporting
tools.
v Industry-Specific
Needs: Retail businesses may require inventory management, while
service-based companies might prioritize project billing.
Ask yourself: What tasks do I
need to automate? Do I need software for bookkeeping, tax preparation, payroll,
or all of the above? Want it only for Financial Accounting or integrated with
inventory. To take care of other functions like payroll, taxes, audit, costing?
Understanding your priorities will narrow down your options.
2. Determine Your Budget
Accounting software comes in a
range of price points, from free tools to premium solutions costing lakhs or
crores.
v Initial
Costs: Subscription fees or one-time purchases.
v Ongoing
Costs: Add-ons, user licenses, maintenance, or customer support fees.
v Value
for Money: A low-cost option might save money upfront but lack features
you’ll need later, while a higher-priced solution might offer long-term
benefits.
Many providers offer free trials
or basic plans, so you can test the software before committing. Balance
affordability with functionality to avoid outgrowing your choice too quickly.
3. Evaluate Key Features
Not all accounting software is created
equal. Look for features that align with your needs, such as:
v Core
Accounting: General ledger, accounts payable/receivable, bank
reconciliation.
v Invoicing:
Customizable invoices, payment reminders, and online payment integration.
v Reporting:
Real-time financial statements, cash flow analysis, and forecasting tools.
v Automation:
Automatic bank entries, transaction categorization, and recurring invoices and
journal entries.
v Integration:
Compatibility with tools you already use, like CRM, payroll, or e-commerce
platforms.
v Taxation:
TDS and GST - all supporting workings and generate reports for periodic
returns. Flexible for real time updation for any change by government in Tax
Laws.
v Scalability:
Ability to add users or features as your business grows.
Make a checklist of must-have
features versus nice-to-haves to guide your decision.
4. Choose Between Cloud-Based
and Desktop Software
Decide whether you want
cloud-based or on-premise (desktop) software:
v Cloud-Based:
Accessible anywhere with an internet connection on your laptop/tablet/Mobile,
automatic updates, and lower upfront costs. Ideal for remote teams or
businesses needing flexibility.
v Desktop:
Installed locally, offering more control and potentially better performance for
high-volume transactions, but requires manual updates and IT support.
Most modern businesses opt for
cloud-based solutions due to their convenience and scalability, while
traditional business owners still prefer desktop version as they know and value
– sensitivity and confidentiality of Accounting Information and Data. Your
choice depends on your operational setup and security.
5. Prioritize Ease of Use
The software should be intuitive
for you and your team, especially if you’re not an accounting expert. Look for:
v A
clean, user-friendly interface.
v Minimal
learning curve for non-accountants.
v Free
resources like tutorials, FAQs, or onboarding support.
Test the software during a free
trial or demo to ensure it feels manageable for your skill level and team. For
softwares like Tally there is so much knowledge available on internet
(specially YouTube) and for ERP, there is complete blue print and users manuals
are provided by implementing partners along with 1-3 months training to users.
Financial data is sensitive, so
security is non-negotiable. Ensure the software offers:
v Encryption
for data protection.
v Role-based
access controls to limit who sees what.
v Work
flow for Authorization/s.
v Log
book to record any change to meet the Audit-Trail Requirements.
v Regular
updates to address vulnerabilities.
v Compliance
with local tax laws and regulations.
Ask the provider about their
security measures and how they handle data backups.
7. Investigate Customer
Support
Reliable support can make or
break your experience. Consider:
v Availability:
24/7 support, phone, email, or live chat options.
v Response
Time: How quickly do they resolve issues?
v Resources:
Are there knowledge bases, forums, or training available?
Read reviews or ask current users
about their support experiences to gauge reliability.
It is very important specially
when your company works on 24*7 basis. There may be error while issuing
e-invoice or eway bill, and you need help from customer support to fix on
urgent basis.
8. Test Scalability and
Integration
Your business may grow, so pick
software that can grow with you. Check if it:
v Supports
additional users or features without major disruptions.
v Integrates
with other tools (e.g., payroll systems, POS, or HR software) to streamline
workflows.
Avoid solutions that lock you
into a closed ecosystem, as this can limit flexibility down the road.
9. Review Analysis
It is always good to get feedback
from those who are already using the software, you are shortlisting for your
organization. There are many web-portals where you can find the same. Also
there are many groups on Linkedin, Whatsapp etc created and run by Accounting/Finance
community.
Before committing, test your top
choices. Most providers offer free trials or live demos. Use this time to:
v Explore
the interface and features hands-on.
v Input
sample data to see how it handles your workflows.
v Assess
performance under your typical workload.
To summarize Selecting accounting
software is about finding the right balance between functionality, cost, and
ease of use. Start by understanding your needs, then evaluate options
methodically. Don’t rush - investing time upfront will save you from headaches
later. With the right tool, you’ll not only manage your finances more
efficiently but also gain insights to drive your business forward. TallyPrime,
Vyapar, or Zoho Books are cost-effective and simple (Good for
Small Businesses), SAP B1 offers scalability and ERP features (Good for
growing SMEs) and SAP R/3 ECC or JDE provide comprehensive systems, though
they come with higher costs and complexity. (Best for Large Enterprises).
Further your choice depends on business size, industry, and whether you prefer
cloud or on-premises solutions. Don’t just follow recommendations from
investors or consultants - discuss your needs and explain why a standard tool
might suffice over a flashy, expensive one. Factor in one-time costs,
customization, annual maintenance, cloud capabilities, and integration with
tools like CRM or HRMS in real time.
A good software with automation
can add ultimate value to your company. E.g. PDF Version of Invoice can be sent
on whatsapp/mail to customer with copy to sales person, dispatch detail on delivery,
payments receipts, payment reminders and statement of accounts for
confirmation. The option of recording/posting recurring transactions like Fixed
Costs (Rent/Consultants Fees), Provisions, Prepaid Expenses with or without
modifications save precious time of accounting team. API enabled software are
just magic, large number of bank transactions, a big headache for an accountant
to post and reconcile, can do in minutes with the help of API. Now a days many
banks encourage their clients to opt for API for fully automate their banking.
For now, this should suffice.
I’ll write in detail on Tally and Zoho later if time permits. Be cautious - choosing
the wrong software can bore your team to death, while the right one can make
accounting a joy. As in beginning I said, It is like buying a Car. Choose
perfect one with all comfort features and You’ll enjoy every second of Driving.
Thanks. Happy Accounting.
* At last, Please ensure to have
full access and control on Data. Specially if it is cloud-based software. Sometimes
Service Providers only provide access and not control on Data. Ownership should
be with company, otherwise it will be painful, if you decide to change your software
in future.
*For any change in pricing, please refer website of companies – developed the software/marketing in India or contact them for latest versions and other Information.
