How to Select the Right Accounting Software for Your Business in India

 

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:

1. 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.

2. 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.

   

3. 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).

 

4. 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).

 

5. 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.

 

6. 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.

7. 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.

8. 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.

9. 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.

 6. Check Security and Compliance

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.

 10. Take Advantage of Trials and Demos

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.