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Accounting software has grown in leaps and bounds over the past decade, but it’s also become a chore to maintain. Small business accounting software is an affordable way to stay on top of your numbers without having to pay for more expensive options that can do too many things at once.
Small company owners have a lot on their plates, and they require accounting software to pay their bills, collect money from clients, and keep track of their earnings and spending. The finest accounting software for small companies, on the other hand, is not a one-size-fits-all solution and will differ widely depending on your industry and personal preferences. We’ve included our top accounting software recommendations as well as a discussion of which sectors they work best in.
Small Business Accounting Software: The Top 6
- QuickBooks Online: The best small company accounting software for project, class, and location monitoring that can be tailored to any industry.
- QuickBooks Desktop Pro is the best desktop accounting software for customers who don’t have access to the internet all of the time or who need to handle the accounts of several businesses.
- Zoho Books: For freelancers, gig workers, solopreneurs, sole proprietorships, and other self-employed company owners.
- Sage 50; is ideal for combining financial statements from various businesses.
- FreshBooks: For small companies that want professional-looking invoices and robust invoicing capabilities.
- Wave: The best free accounting software for small firms who merely need to keep track of their revenue and spending.
QuickBooks Online
What We Enjoy
- A large number of customisable reports are available.
- Other cloud-based apps don’t have as many features as this one.
What Isn’t There
- Pricier than the majority of rivals
- There are no industry-specific tools available.
Pricing
New customers may select between a three-month 50% discount or a 30-day free trial.
- $25 a month for one user is a good place to start.
- $50 per month for three users is the bare minimum.
- Plus, for five people, it’s just $80 per month.
- Advanced: $180 per month for a group of 25 people.
QuickBooks Online is a superb choice for most small businesses. It is easy-to-use accounting software that you can share effortlessly with employees, certified public accountants (CPAs), and tax professionals. With tiered subscription levels, QuickBooks Online can scale as your business grows or your needs change. You can try QuickBooks Online for free with a 30-day trial with no credit card required.
Best For
- Construction: QuickBooks Online provides excellent project accounting as well as construction management tools like employee time and location tracking, customer relationship management (CRM), and customer portal.
- Ecommerce retailers: QuickBooks Commerce can be added to QuickBooks Online to provide direct integrations with most ecommerce platforms, reducing the need for expensive third-party connectors.
- Real estate businesses: The ability to separate activity by both class and location makes QuickBooks Online is a viable option for property management companies that need to track income and expenses for various segments and locations.
- Time tracking: QuickBooks Time, formerly TSheets, integrates with QuickBooks Online to provide outstanding time tracking for both billing and payroll purposes.
- Online bookkeeping assistance: Intuit provides an online bookkeeping service, QuickBooks Live, that pairs companies with a dedicated team of ProAdvisors to provide bookkeeping services tailored to your QuickBooks Online needs.
- Mobile app: QuickBooks Online has an incredible mobile app that allows you to perform nearly any accounting task on the go, including invoicing.
Expert Recommendation
It’s hard to go wrong with QuickBooks Online if you can afford the price. It is very flexible and powerful software that can be customized for nearly any business.
QuickBooks Desktop Pro
What We Enjoy
- There is no need for an internet connection.
- With a Premier upgrade, you may get industry-specific versions.
- Accounting services for an infinite number of businesses
What Isn’t There
- To get limitless customer service, you must buy an annual membership.
- Additional licenses are required for each concurrent user.
Pricing
- Pro 2021 costs $399.99 for one person and $250 with each additional user up to a maximum of three users.
- Subscription to Pro Plus 2021: $299.99 per year for one user, plus $200 per year for each additional user up to a maximum of three users.
- Premier 2021 costs $649.99 for one person, $350 for a second user, and $400 for each additional user.
- Subscription to Premier Plus 2021: $499.99 per year for one user, plus $300 per year for each additional user up to a maximum of five users.
Unlimited customer support, off-site backups, and yearly upgrades to the newest versions are all included with the Plus membership.
Pro and its upgrade, Premier, are desktop versions of QuickBooks that can be used to keep the books of an unlimited number of companies for a single price. This makes them much more affordable than cloud-based accounting software, which almost always charges for each individual company.
Who Should Use QuickBooks Desktop?
- Farmers & ranchers: QuickBooks Pro is a great option for farmers and ranchers that may not have continuous internet access. It allows users to track income and expenses by class like corn, wheat, or livestock.
- Bookkeeping for multiple companies: Users can keep track of an unlimited number of companies with the purchase of a single QuickBooks Pro license.
- Nonprofit organizations: Users who upgrade to QuickBooks Premier may choose the Nonprofit Edition, which contains specialized processes and reports and is built exclusively for nonprofits.
Expert Recommendation
QuickBooks Desktop Pro and Premier editions are very powerful accounting software, perhaps even more powerful than QuickBooks Online. However, they are more difficult to master and don’t provide the advantages of mobile accounting.
Zoho Books
What We Enjoy
- Telephone customer service
- Even the tiniest firms can afford it.
- Keep track of your time and costs, then add them to an invoice.
What Isn’t There
- It is not compatible with tax preparation software.
- A fee is charged for scanning receipts.
- Unpaid invoices are not tracked in the Standard edition.
Pricing
- For three users, the standard price is $20 per month.
- Professional: $50 per month for five users, with management of bills, sales orders, and purchase orders included.
- Premium: $70 per month for ten users, with a vendor portal and budgeting tools.
Zoho Books is an affordable accounting solution that is easy to use. It’s one of many Zoho apps, such as Zoho CRM, Zoho Inventory, and Zoho Projects, that can be integrated to give you a comprehensive solution to all your business needs. Zoho Books can be purchased separately, as part of the Zoho Finance bundle, or as part of Zoho One, which includes all of Zoho’s apps.
Best For
Zoho Books is our top pick for freelancer accounting software because it’s easy to use, very affordable, and has a great mobile app for business owners that are rarely in the office.
Expert Recommendation
Zoho is unique in its approach to business management software. It offers a large selection of very narrowly focused business apps. You buy only the apps that fit your particular needs to arrive at a custom-made whole-business software solution. Most businesses will start with Zoho Books but might want to add Zoho Projects eventually for project management or Zoho Inventory to manage inventory better.
Sage 50
What We Enjoy
- For a single cost, you may manage many businesses.
- Prepare financial statements that are consolidated.
- Sage Drive allows employees and accountants to access data.
What Isn’t There
- Only one remote user may make modifications to the file at a time.
- There is no way to buy the program without first signing up for a subscription.
- The cost of a subscription is higher than that of comparable services.
Pricing
- $56.08 per month for a single user
- Premium: $84.58 for one user to $194.75 for five users per month
- Quantum costs $139.58 per month for one person to $356.83 per month for five users, with bespoke pricing for groups of more than ten users possible.
Sage 50Cloud, generally referred to as simply Sage 50, is a unique bookkeeping software that is a desktop program but can store your data in the cloud to be accessed from anywhere. Formerly known as Peachtree, Sage has been in the accounting software industry since 1978 and is a reliable alternative to QuickBooks. Sage 50 is very powerful and allows you to Prepare financial statements that are consolidated. for parent-subsidiary entities, a very rare feature for small business software.
Best For
When one business owns 50% or more of another, Sage 50Cloud Premium and Quantum versions are relatively inexpensive software that can combine the financial accounts of several firms as needed by Generally Accepted Accounting Principles (GAAP).
Expert Recommendation
Sage 50Cloud is a good software that is easy to use but more expensive than other options. If you need to Prepare financial statements that are consolidated, Sage 50 is one of your few choices in small business accounting software.
FreshBooks
What We Enjoy
- Create invoices with a professional appearance.
- Keep track of your time and add it to your invoicing.
- Keep track of the project’s profitability.
What Isn’t There
- Unable to keep track of outstanding bills
- The number of customers is limited by subscriptions.
- A fee is charged for additional users.
Pricing
- Lite: $15 per month for up to five billable customers and one user.
- Plus, one user gets $25 per month and 50 billable customers.
- Premium: $50 per month includes one user and an unlimited number of chargeable customers.
- Choose from two price options, a dedicated FreshBooks account manager, and personalized onboarding help.
Any plan may be upgraded to include more users for $10 per month per user.
FreshBooks began as a method to create attractive, professional invoices. FreshBooks has evolved into a comprehensive accounting solution that allows you to manage income and expenses as well as generate financial statements, while still emphasizing invoicing. A 30-day free trial does not need a credit card to begin.
Ideal For
FreshBooks is our top-rated invoicing software, and it’s perfect for keeping track of employee time and costs and simply incorporating them into professional bills.
Expert Recommendation
FreshBooks’ accounting is robust, and it includes complex features like bank connections, receipt scanning, time tracking, and project planning and tracking, in addition to its professional-looking invoicing. FreshBooks cannot be used to compute net income on an accrual basis since it does not track outstanding debts.
Wave
What We Enjoy
- Forever free
- Multiple companies may be run from a single account.
What Isn’t There
- There is no expense monitoring for inventories.
- There is no way to monitor your miles.
- There is no timer.
Pricing
Wave is an excellent fit for small enterprises that provide services. Despite the fact that Wave is free, its accounting tasks and features are helpful and give a decent solution for small enterprises on a budget.
Best For
Wave is excellent software for small firms without inventory that are ready to forego features in exchange for free accounting software.
Expert Recommendation
Wave is completely free, however it has several capabilities that are only available in expensive products. Bank connections, receipt scanning, and invoicing are all included. Users may add payroll or merchant services to their accounts to generate money, although premium software providers charge extra for these services as well. In numerous areas, like reporting, inventory management, and mobile accounting, Wave falls short of commercial software.
Best Accounting Software for Small Businesses
These accounting software solutions are good alternatives to explore, even if they aren’t ranked as the best for any specific sector or purpose.
Xero
No list of accounting software is complete without mentioning Xero. While we consistently rate QuickBooks Online is a software program that allows you to better than Xero across all industries, Xero is still very good software with excellent inventory accounting. Xero is less expensive than QuickBooks Online is a software program that allows you to and rated as our best alternative to QuickBooks.
Sunrise
Sunrise by Lendio provides free accounting software for do-it-yourself (DIY) bookkeeping as well as fee-based assisted bookkeeping. The inability to reconcile your bank accounts to your bank statements is the DIY software’s biggest flaw, which isn’t a huge issue unless you issue a lot of paper checks.
Why Do You Need Accounting Software for Your Small Business?
According to Griffith University researchers, 82 percent of experts feel that a small business owner’s financial literacy, particularly their understanding of accounting software, is a critical aspect in their company’s sustainability. To prevent becoming one of the 50% of small companies that fail during the first five years, you must be actively involved in the financial aspects of your company. Using accounting software to assemble the data you need to make educated choices is the first step toward financial literacy.
Accounting software may save you time in addition to helping you understand and manage your business’s finances.
How Accounting Software for Small Businesses Works
Accounting software that can charge customers and monitor payments, manage and track invoices, and generate reports to see how your firm is functioning should be used by all companies. Aside from that, the accounting software features you need will depend on your industry and personal preferences.
Customer Invoicing and Payment Tracking
Your accounting software should be able to generate invoices and monitor them until your client pays them. It’s also beneficial if your program can provide an accounts receivable (A/R) aging report, which lists all of your outstanding bills and groups them by how far over their due date they are. Finally, the finest accounting software will keep track of inventory, time, and costs, allowing you to effortlessly add them to invoices without having to enter a lot of data manually.
Keeping track of bills and expenses
Your accounting software should ideally enable you to enter bills as soon as they arrive, including their due date. You may get reminders about approaching due dates and create an accounts payable (A/P) aging report that groups invoices according to how long they’ve been past due.
Reporting
Your accounting software should at the absolute least produce a profit and loss statement and a balance sheet that may be used to compile your tax returns. Software that produces comparative financial statements that display current and past year data side by side is beneficial.
More reports beyond simply basic financial statements are printed by the top accounting software. If your company deals with inventory, for example, a report describing the amount and cost of current inventory on hand is required. If your business is involved in significant projects, such as construction, you’ll need reports that analyze the profitability of various projects and compare actual expenses to projected prices.
Meeting Industry-Specific Demands
Many businesses have distinct accounting software needs that may or may not apply to other industries. Restaurants and physical retail businesses, for example, need a robust point-of-sale (POS) system. It’s critical for these firms to choose an accounting system that can link with a point-of-sale system to automatically transmit data without the need for human inputs, which may waste time and lead to errors.
Employee time and location monitoring, ecommerce systems, CRM, and subcontractor administration are among the other industry-specific requirements.
How Did We Assess Accounting Software?
The fundamental functionality of classifying income and spending, as well as managing account balances, are provided by all of the software we review. We looked at the aspects that differ across programs and that you should think about when deciding which is appropriate for your company.
- Value: Because the cost of software generally rises with the amount of features available, we compared the price to the features and functionality provided. We also preferred software with a no-credit-card-required free trial period.
- User-friendly: Although most small company accounting software is built for non-accountants, we compared the program to its rivals to see how user-friendly it is.
- Invoices: We prioritized the accounting software’s invoicing functionality since it is critical to the overwhelming majority of organizations.
- Customers would pay much more quickly if they can pay online rather than by mail, thus we chose software that enables online payments to be connected with the accounting system.
- Bill monitoring and payment: Most accounting software, but not all, will track outstanding bills (A/P) and even let you make an online payment right from the program. We thought the absence of an A/P function was a severe flaw.
- Payroll is a pain and should be outsourced as much as feasible. We preferred software that could connect to payroll sources and automate the accounting inputs needed after each paycheck.
- Financial statements: While most software includes a balance sheet and a profit and loss statement, some free programs do not include statements that compare current period statistics to prior-period figures, making it more difficult to read the reports.
- Sophisticated features: In addition to the essentials, some software has advanced capabilities like receipt scanning, GPS distance monitoring, and time tracking that may make your life simpler.
Conclusion
There are many great small business accounting software available, but none of them are as versatile and comprehensive as QuickBooks Online. However, QuickBooks Onlineis not always the best solution, especially if you only have very basic needs and wish to save money. Also, if your business operates in a very specialized industry, you may be able to find industry-specific software that won’t require as much customization as QuickBooks Online.
Frequently Asked Questions
What is the easiest accounting software to use?
Quickbooks is a simple accounting software that can be used on both PC and Mac.
Do most small businesses use QuickBooks?
Most small businesses use QuickBooks.
