What is a financial tech stack?
A tech stack, or a solutions stack, is the combination of technologies and software tools that an organization uses in order to conduct day to day business operations. As the number and quality of software tools increases, companies are constantly looking to find better ways to cut down on manual work and increase efficiency.
A finance software stack is a list of top solutions that will produce the best results for finance teams. Finance is responsible for a large number of critical operations in a business. From accounting and payroll management to budgeting and forecasting, finance is the reason and numbers behind every bit of data that passes through the organization.
How each winner was chosen?
In order to produce the best and most efficient results, it’s critical to have the best software for each task. But choosing the best overall software on an individual level is not the best idea, as each company has their own unique needs, specifications, and budgets, and most importantly the tools need to work well together. That is why we put together a list of the best software in each category of the finance department that keeps all of the important factors in mind:
• Most bang for your buck
• Low implementation times
• Number of integrations
• Making sure they work well with the other tools on the list
• Easy to scale as the company grows
• Level of customer support
• Customer feedback/ pros and cons
Each software tool was chosen with a broad customer base in mind. Most are geared towards SMBs, but have the ability to scale as the company grows- meaning your company will never have to leave the original software solution.
As a bonus, we selected 2nd place choices for those who find that the 1st one doesn’t fit their exact company needs. The second option provides better priced plans and/or caters to different target audiences to ensure there will be a good option for any size or type of business.
Here are the 7 best finance software solutions broken down into different categories:
1) Accounting
1st Place: Quickbooks
Why Intuit QuickBooks?
Perhaps there is no bigger name in accounting than Intuit. Whether you file your own taxes or own a small or large business, chances are you’ve run into Intuit. Intuit owns QuickBooks, Turbo Tax and even credit monitoring service Credit Karma.
QuickBooks has been the go-to name in small business accounting for a long time for a number of reasons. The biggest benefits are its simplicity and popularity. Every accountant has some familiarity with QuickBooks and every owner and finance team member finds the platform easy to use. This makes accounting collaboration consistent and easy to follow, which is a huge benefit for businesses who have multiple people using the same accounting software.
Pros:
• QuickBooks’ record keeping and reporting is thorough and more detailed than most other accounting softwares. For adding expenses, there are plenty of options for plugging in memos, permit and reference numbers, and attachments which makes it easy to track inventory and do job costing.
• With over 650 integrations, it will be hard to find something that doesn’t integrate with QuickBooks. There are employee time tracking sheets, payroll management, customer accounts, and even the ability to generate basic financial reports.
Cons:
• Pricing. Although Quickbooks isn’t expensive, there are definitely cheaper options (see below). And if companies are using more advanced plans or adding payroll options (additional $5-10/month per employee), the monthly fees can add up.
• Lack of industry and business-specific features (such as lot tracking, eCommerce and barcode scanning).
Update December 2023: Quickbooks extended it's deal of $1/month for 3 months for any of its plans.
Accounting 2nd Choice:
Wave is 100% free (yes you read that right). Wave is an accounting software that provides many of the same services as other accounting tools. Although it’s meant for small businesses and doesn’t provide as many integrations as QuickBooks, Wave takes care of all of your accounting services and provides invoicing and payroll as well. It also has a very easy to use platform and excellent security. If Wave is enough, why pay?!
2) Payroll Management
1st Place: Paychex
Why Paychex?
There are plenty of great payroll options available, but Paychex is reliable, offers a lot, and has fair pricing. Paychex has direct deposits and automates state and federal taxes, two of the biggest reasons why companies implement payroll software.
What pushes them ahead of other choices is the number of reports that Paychex provides. With over 160 reporting options, the user can get a clear and simple overview of wages, turnover, and taxes. Paychex also conveniently integrates with QuickBooks, our number 1 choice for accounting software, making accounting and payroll convenient and transparent if you decide to go with both options.
Pros:
• 24/7 support with above average customer service.
• User friendly and simple platform for both employees and management.
• Great reporting features.
Cons:
• Customers report problems with a slow/ lagging app.
• Hidden fees for setup and downloading some tax documents.
Payroll Management 2nd Choice:
Gusto is another one of the most popular payroll management software, and you can’t go wrong with it either. With almost identical pricing to Paychex ($40/month+ $6 per employee) and similar integrations, both of these solutions consistently rank as the top 2 in the payroll management categories. An attractive selling point for Gusto is their unique lifetime employee access to payroll and tax forms that continues even after switching jobs. However, Paychex’s customer support, usability, and number of reporting options puts them slightly ahead of Gusto in our rankings.
3) Human Resources
1st Place: Workday
Why Workday?
For small and medium sized businesses, most payroll management and accounting tools will have add-on options for basic HR management that is usually enough to do the job (for example, Paychex and Quickbooks have simple HR tools). However, larger companies or those who have a high percentage of remote workers may want a more comprehensive solution. Workday is the perfect choice due to its all in one platform that does everything HR related and serves millions of customers.
Pros:
• Built for global companies which makes it easy to manage even multiple locations.
• Enables detailed compensation packages that can be customized in many ways.
• Workday can be a complete, all in one software solution for large companies, as they also have financial planning software, spend and talent management, and payroll solutions to go along with their 600 integrations.
Cons:
• Pricing can be expensive due to the customized quotes where people have reported overpaying.
• Comprehensive solution with many features. If a company doesn’t need that much complexity then it can be overwhelming and take too much time.
• Some hidden fees for updates and onboarding.
HR 2nd Choice:
For companies who need an HR tool without all of the complexities and add ons that Workday provides, HiBob is the perfect fit. With a simple, easy to use platform, good workflows, performance management, and easy integrations with payroll, HiBob helps companies be more efficient and connected.
The pricing is also similar to Workday’s with plans starting at $5-8 PEPM (Per Employe Per Month) but they only have customized quotes. The downside is having far less integrations and customizable options in comparison to Workday, but the decision essentially comes down to the size and complexity of the organization’s HR needs.
4) Financial Planning and Analysis (FP&A)
1st Choice: Datarails
Why Datarails?
FP&A software solutions have become more and more common for all types of companies, as the size and complexity of data increases constantly. Datarails covers all of the bases of what finance professionals look for in FP&A software: It automates manual data work, provides in-depth dashboards and analytics, and greatly improves budgeting and forecasting processes across the organization. All of this allows finance professionals to spend more time analyzing data instead of conducting manual and repetitive work.
The reason why Datarails comes out ahead of the competition is due to 2 important reasons: The first one is pricing, which tends to be significantly lower than most other solutions. The second reason is Excel. Datarails provides a native Excel platform, which means finance teams can stay in the familiarity of Excel and gain all of the benefits of an FP&A software, all while receiving a quick ROI.
Pros:
• Above average customer support made up exclusively of finance experts.
• Dashboards are simple and easy to use and don’t need advanced technical skills, while still providing plenty of customizable options.
• Very good consolidation abilities that allows for gathering scattered operational and financial data from all different kinds of platforms and turning them into analyzed data in one place.
Cons:
• Caters to SMBs. Large businesses might be better off with enterprise-focused software such as Anaplan.
• No on-premise solutions.
FP&A 2nd Choice:
Anaplan is another great choice for FP&A software, but they focus on larger and enterprise level companies (although not used exclusively by them). With great automation tools and dozens of integrations, Anaplan will save your finance team lots of time while adding valuable insights. However, their implementation time and pricing ranks below Datarails and they are known for needing a good amount of IT support as well. Large companies with big finance teams have a lot to gain from Anaplan (or Workday) but anything mid size or smaller should take into account the higher price ticket and the long implementation time.
5) Accounts Payable
1st Choice: Tipalti
Why Tipalti?
Tipalti isn’t the most comprehensive accounts payable software (that would go to Procurify which starts at $499 a month), nor is it the cheapest (see below), but it ranks high in just about every category and sits at a good price, so it takes the prize as number 1. Tipalti centralizes and consolidates manual processes, and most importantly provides end to end automation which saves companies lots of time and headache. The entire lifecycle of payments (invoices, payments, reporting, etc.) are all consolidated in one solution. While every software on this list was chosen in part due to their ability to scale with the company, Tipalti does this one of the best.
Update: Tipalti has lowered its pricing from starting at $129 per month down from $149 per month.
Pros:
• Live customer support.
• Very good machine learning that gets better and faster the more the customer uses it.
• Great for processing multiple global payments and currencies.
Cons:
• Currently no mobile application.
• Doesn’t have good tax functions, so not the best choice for companies who want an all-in-one software (Quickbooks might be better).
• There are cheaper options for small businesses who don’t need such a comprehensive system.
Accounts Payable 2nd Choice:
For SMBs, bill.com might be more than enough for your accounts payable needs. The basic plan starts at $45/ month, and even if you want to add a more comprehensive plan that includes additional features and integrations with software such as Quickbooks and Xero, it will only cost $79, a bit more than half of Tipalti. Bill.com also offers accounts payable and their own credit and expense management. While they slightly lag behind Tipalti in machine learning and automating manual processes, bill.com is a great second choice, especially for small businesses.
6) Accounts Receivable/ Invoicing
1st Choice: FreshBooks
Why FreshBooks?
Like every software on this list, FreshBooks was chosen because it checks all the boxes and provides the best value for money. Although it’s not as big as Sage Intacct or as comprehensive as Intuit QuickBooks, FreshBooks’ 30 million users attest to its attributes.
FreshBooks excels at invoicing as it provides many customizable invoicing designs, including recurring digital invoices. Additional features such as easily including customer discounts and instant updates when invoices have been opened or paid, help save companies a lot of time chasing after customers. The mobile app is above average and their quick and helpful customer support rounds out the reasons why FreshBooks was chosen first..
Update: As of January 16, 2024, Freshbooks will be raising prices. For example their Lite plan will be raised to $19/ month up from $15.
Pros:
• Very easy to use while still providing all of the necessary features and more.
• Provides many free add ons such as employee time tracking and generating reports that are additional costs with other solutions.
• Very good automatic invoicing that keeps it simple and consistent for everyone.
Cons:
• Pricing packages are meant for small businesses. There are limits on users with an additional $10 charge for each one.
• Reporting features can use improvement.
Accounts Receivable/ Invoicing 2nd Choice:
Once again QuickBooks provides a reliable, trusted, and easy to use platform for all things accounting, including invoicing. But Freshbooks slightly beats them out due to the pricing, customer support, and superior automatic and customizable invoicing. However, many medium sized and fast growing businesses prefer QuickBooks because of their scalability and number of users. You can’t go wrong with either, and the choice mostly comes down to the size of the business and number of users.
7) Payment Processing:
1st Choice: Stripe
Why Stripe?
Stripe and PayPal are the top tier of payment processing solutions and two of the most popular ones on the market. The debate between the two is similar to Messi vs. Ronaldo, Sheetz vs. Wawa, or Michael Jordan vs. LeBron James- you can’t go wrong with either, but people still have their preferences. Although PayPal has been around for longer, Stripe offers more customizable setups and great customer support. PayPal usually wins out for small and new businesses due to their easier setup, while Stripe has overall lower fees (not in every category but in most), a more customizable payment method, and is generally recognized as slightly better for more established businesses.
Pros:
• Stripe accepts 135 different currencies.
• Consistent and transparent fees- You can calculate projected fees easily with no hidden fees.
• 24/7 phone support.
Cons:
• Depending on what type of transactions your business has (international, chargeback fees, online, etc.) other solutions may be cheaper.
• Stripe is developer focused. It takes more time and resources to set up the program interface and API.
Payment Processing 2nd Choice:
As mentioned above, PayPal is on the same level as Stripe, and many businesses even prefer it. For those who prefer PayPal, it usually comes down to the easy setup, the established and recognizable name (everyone trusts PayPal), and in some cases cheaper fees, depending what type of transactions your company tends to do.
Conclusion
The Mix and Match Mentality
Each software was chosen as the best in each specific category based on a number of important factors. But for many organizations who don’t have an immense focus on each and every financial category, mixing and matching is the best way to go about choosing the best options.
For example, an eCommerce company might need to put a lot of focus on which payment processing and financial planning solution they go for, while the HR and payroll management categories are less important. For the important categories (payment processing and FP&A), Stripe and Datarails might be the best choices, while a cheaper or all in one solution (such as QuickBooks) can cover the other categories all at once and keep things simple.
Why invest in these solutions?
Modernizing your finance technology stack is important. Like every industry today, finance is evolving, and companies need to keep up with the rise in the amount of data and increased competition in a fast changing business environment.
Finance plays a central role in this as finance leaders are making more of the technology decisions and playing a more central role in company blueprints. Creating a plan to revitalize the organizations’ financial software will help finance stay ahead of the game.