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Top Software Tools to Track Business Expenses and COGS

Writer's picture: Irvine BookkeepingIrvine Bookkeeping

To be profitable and in excellent financial shape, small and medium-sized companies must monitor their expenses and correctly determine their Cost of Goods Sold (COGS). With appropriate tools, keeping track of spending can be quicker, simpler, and less prone to error. The greatest instruments to enable you to monitor the expenses of your company and control cost of goods sold (COGS) will be discussed in this article.

Why Do You Need Software for Tracking Expenses and COGS?

"Why should I buy software to keep track of my costs and cost of goods sold?" companies of all kinds sometimes ask. The answer lies on how fast and well these instruments operate. The following justifies the need of tracking expenses software:

  • Automation: Increase automation to cut down on mistakes and data entry by hand.

  • Time-saving:Not spending as much time on numbers will help your business grow

  • Accurate Reports: Generate precise financial reports for better decision-making.

  • Compliance: Stay prepared for tax season with organized and accurate records.

Key Features to Look for in Expense and COGS Tracking Tools

When selecting a tool, ensure it includes these essential features:

  • Integration: Ability to connect with other accounting or inventory systems.

  • Customization: Adaptable to your specific industry needs.

  • Automation: Features like auto-categorization of expenses and real-time tracking.

  • Reporting: Detailed and customizable reports for financial analysis.

  • User-Friendly Interface: Easy to navigate for all team members.

Top Software Tools for Tracking Business Expenses and COGS

  1. QuickBooks Online

Large and small businesses alike love QuickBooks Online, which is one of the best bookkeeping programs out there. This tool makes monitoring expenses, managing cost of goods sold (COGS), and general accounting easier. It is known for having a lot of features. There are features and options in QuickBooks Online that can be changed to fit your needs, whether you run a small store or a service-based business that is growing.

  • Key Features:

    • Monitoring of costs in real time.

    • Accounts can be linked so that transactions are updated automatically.

    • Flexible tools for reporting COGS and profit  margins.

  • Pros:

    • Easy integration with third-party apps.

    • Suitable for businesses of all sizes.

    • Extensive support and tutorials.

  • Cons:

    • Higher cost compared to some competitors.

    • Can be overwhelming for beginners.

  • Best For: Small businesses looking for an all-in-one accounting solution.

2. FreshBooks

Small service-based businesses can use FreshBooks, an easy-to-use cloud-based accounting program. Independent contractors and business owners like it because it's easy to use to keep track of time, costs, and invoice clients. FreshBooks is great for people who don't know much about budgeting because it is designed to be easy to use.

  • Key Features:

    • Expense tracking with receipt capture.

    • Time tracking and integration for labor costs in COGS.

    • Automatic invoicing and payment reminders.

  • Pros:

    • Intuitive and user-friendly design.

    • Excellent customer service.

    • Integration with time tracking for service-based industries.

  • Cons:

    • Limited inventory management features.

    • Not ideal for larger businesses with complex needs.

  • Best For: Freelancers and small service-based firms.

3. Xero

Small and medium-sized businesses can use Xero, a modern cloud-based accounting tool with a lot of good features. Xero is great for businesses that need a flexible and powerful tool to handle their finances. It has a clean interface and a real focus on integrations. People love it for thorough financial analysis because it can produce strong reports.

  • Key Features:

    • Real-time bank feeds for expense tracking.

    • Comprehensive reporting for COGS and operating expenses.

    • Integration with over 800 third-party apps.

  • Pros:

    • Affordable pricing for small businesses.

    • Strong integration capabilities.

    • User-friendly interface.

  • Cons:

    • Expanding businesses can't use it as much as they'd like.

    • Free tools have more advanced options.

  • Best For: Businesses and companies that want free help should use this.

4. Wave

Many companies and small businesses on a tight budget choose Wave because it is one of the few free accounting programs out there. Wave is a free app that can help you with important financial tasks, but it lacks some advanced features. For example, it doesn't have a lot of very advanced features.

  • Key Features:

    • Free tools for expense tracking and invoicing.

    • Simple interface for easy navigation.

    • Secure cloud storage for financial data.

  • Pros:

    • Completely free to use.

    • Ideal for startups and entrepreneurs.

    • No hidden fees or charges.

  • Cons:

    • Limited scalability for growing businesses.

    • Basic features compared to paid tools.

  • Best For: Entrepreneurs and small startups looking for no-cost solutions.

5. Zoho Books

Zoho Books is a part of the Zoho suite of business applications, offering seamless integration and a variety of features for tracking expenses and managing COGS. It’s an excellent choice for businesses already using other Zoho products and looking for an interconnected financial management system.

  • Key Features:

    • Real-time expense tracking with customizable categories.

    • Inventory management integration for precise COGS calculations.

    • Automation of recurring expenses and transactions.

  • Pros:

    • The price plans are reasonable.

    • Seamless integration with other Zoho apps.

    • Highly customizable features.

  • Cons:

    • Steeper learning curve for new users.

    • Some advanced features require additional costs.

  • Best For: Businesses already using Zoho products for seamless integration.

How to Choose the Right Tool for Your Business

Ask yourself these questions when selecting the best software for tracking expenses and COGS:

  1. What’s my budget? Some tools, like Wave, are free, while others require a monthly subscription.

  2. Do I need integration? If you’re already using other accounting or inventory software, choose a tool that integrates seamlessly.

  3. What industry am I in? Certain tools are better suited for specific industries, such as retail or service-based businesses.

  4. How complex are my needs? If you manage large inventories, opt for tools with robust inventory and COGS tracking features.

Practical Tips for Using Expense and COGS Tracking Software

  • Start with a Trial: Many tools offer free trials. Test a few to see which suits your needs best.

  • Train Your Team: Ensure all users are familiar with the software to maximize its potential.

  • Stay Consistent: Regularly update your records to avoid end-of-year headaches.

  • Leverage Reports: Use the software’s reporting features to analyze your financial health and make data-driven decisions.

How Irvine Bookkeeping Can Help

Choosing and managing the right software can be overwhelming, especially for small and mid-sized businesses. That’s where Irvine Bookkeeping steps in. We specialize in bookkeeping services and can help you select, implement, and manage the best tools for tracking expenses and Cost of Goods Sold (COGS).


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