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Accounting is ingrained in the operations of all small businesses, yet many of them lack the financial resources to support hiring an accountant. As a result, they are left to work out that side of things on their own, prompting many to turn to account software in many situations. However, the market for those options is crowded, making it difficult to determine where to begin.
Managing your company’s finances, no matter how big or little may be a challenge. You can avoid that worry by letting the best accounting tools for small businesses handle all of the grunt work for you. You’ll be able to get rid of Excel spreadsheets and other similar tools once you’ve found the best accounting software amongst the alternatives. There are several software alternatives that help manage payroll and other business-related tasks with just a few mouse clicks.
For example, you might use accounting software instead of hiring a professional to manage your accounts. You can also handle stock orders and other task management needs. These software alternatives can also help customer relationship management by providing extensive customer analysis.
1. What does accounting software do?
Financial accounting is difficult and time-consuming. Many business owners struggle to manage the basics such as—paying bills and monitoring income. “Are we financially viable?” Is it necessary to purchase new equipment? Is it possible for us to make the needed tax payments? Is it essential to look into funding? Where can we save money? There are some concerning questions that can bother them frequently.
Based on the information you submit, a competent small company accounting website can deliver information in seconds to assist you in answering these questions. Once you’ve filled a site with data about your finances, customers and vendors, and the products you offer, you can use that information to make transactions, which the site may then utilize to generate insights. Instant search functions and customizable reports allow you to find the tiniest data and get a broad picture of how your company is doing. You may access your money from any mobile device via the Android and iOS applications for the sites.
2. What to look for in accounting software?
The accounting software has various features that make it a helpful tool—knowing which characteristics to look for as a small businessman is critical. The majority of online accounting software includes receivable accounts, accounts payable, banking, and reporting. Stock control, project management, time tracking, and payroll tools are just a few available products.
- Bank Connect / Feed: This function links the software to your corporate bank and credit accounts, allowing you to receive daily transaction updates. You will save time as you’ll never have to upload transactions manually. It also shows you a regular account overview rather than a monthly one. Reconciliation gets easy with a real-time bank-feed feature, making it a daily activity rather than a monthly nightmare.
- Online Invoices: If your company sends invoices, mailing them and taking online payments might help you get paid more quickly. Some accounting packages work with third-party payment processors, while others require you to utilize their in-house payment processing. Accounting software that can also function as an invoice maker is a benefit.
- Payment reminders: You can use this tool to inform clients about impending and past-due payments. Some offer pre-written email wording which you can use or modify. You can then specify when the reminders should be emailed. After receiving a customer’s payment, several programs allow you to send thank-you letters to them.
- Reconciliation of bank accounts: Smart reconciliation tools find probable connections between your financial transactions and the invoices and payments you’ve placed into your accounting software, sparing you the time it would take to trawl through your bank account. After that, you can accept or reject the proposed matches. The finest programs propose probable matches as you balance your accounts, and a few even feature a reconciliation function in their mobile applications.
- Financial Reports: Financial reports can be generated by any accounting program. However, some are much more rudimentary than others, but some need you to upgrade to a more expensive plan to get extensive reports. If you require specific financial reports, check to see if they are included in the program and package you select. Detailed reports can aid in interpreting financial data so that you can make business decisions.
- Integrations: Because you don’t have to transmit data from one place to another physically, the ability to relate your accounting software to certain other business tools saves you time. Payroll, payment processing, point-of-sale systems, and CRM software are a few common types of accounting software interfaces. Integration with existing systems reduces training time for staff using the program.
- Inventory Management: If you own a retail, e-commerce, or distribution company, you’ll need a tool to keep track of inventory and purchase orders. You may have to upgrade to a higher-tier plan to use this function. Look for software that interacts with a specialized inventory system if you require more comprehensive inventory functionality.
- Bills tracking: If you’re a freelancer or your company charges clients by the hour, you’ll need software that helps track and invoice your time or interfaces with the time-tracking software you already have. For freelancers, this is a critical feature.
- Project-based billing process: Firms, consultants, and advisors who deal with customers on projects or assignments should search for accounting software that can help them keep track of the activities and costs associated with their projects. Customers should be able to be billed for project expenses and invoiced for monitored time using the software.
- Mobile Apps: Although not all accountancy and billing software has a mobile app, the better ones do. On the other hand, mobile apps have a wide range of features. Some can merely capture receipts for expenditure monitoring, while others can make and send invoices and have nearly all of the features available in web-based software. Check to see if the software you’re evaluating has a mobile app and, if so, whether features can be included that will assist you in running your business while you’re not at your desk.
- Support for multiple businesses: Several of the tools we looked at allow you to add several businesses to your account. However, some companies charge a fee for this service. Also, the kinds of financial accounting crucial to you will be determined by your company’s specific demands. Project-based billing, for example, can be the most vital feature on your list if you set up a small freelance firm. A packed mobile app could be at the top of the list if you plan to perform some business on your mobile device.
To make it easy, we have researched the best accounting software for smaller firms and highlighted the important features of each option. We also highlight the pros and cons of each option. This article will assist you in determining which accounting system is best for your small business.
3. Best Accounting Software for Small Businesses
It can be challenging to locate a small business accounting tool that meets your needs to make and send invoices. Some solutions excel in invoicing but lack accounting capabilities, while others have good accounting capabilities but poor invoicing capabilities. FreshBooks, on the contrary, is a winner in both categories.
FreshBooks is the greatest accounting software for billing since it is straightforward. The format is simple to use. You can add billable time and expenses, personalize the invoice’s appearance, and set up automatic payment reminders, recurring invoices, and late fees easily. The accounting software helps link your bank account, offering a variety of reports, keeping track of time, and assisting you with project management. FreshBooks also lets the customers the option of paying bills via invoices, which streamlines the payment process. It also integrates with various systems, including WordPress, PayPal, Zendesk, Mailchimp, and others.
- Unlimited number of Invoices
- Estimates are limitless.
- Time tracking is unlimited.
- Synchronizes with bank accounts automatically
- 200+ integrations in financial reporting
- More efficient payment collecting
- Reminders for automatic payments
- Monitoring of the project
- Processing of payroll
- Your team members can be added for a fee of $10 per person.
- Lite – Costs $6
- Plus – Costs $10
- Premium – Costs $20
There are also customizable plans offered.
|Estimates that are both attractive and useful.||You can only work with five clients on the entry-level Plan.|
|This is a great time tracking module.||It may be expensive for beginners.|
|Everything is simple to find and manage because of the excellent user interface.|
Many businesses begin small, but this does not always remain the case. You need accounting software that really can scale with your company, and Xero delivers just that. Over 50 reports, covering financial statements and a general ledger, are available in Xero. Reports can be customized, seen as charts, date ranges searched, and other filters used. When you’re finished with a report, you can print it or save it as a PDF, Excel spreadsheet, or Google Sheet. It also aids in keeping track of Inventory, which is especially useful if your company sells and stores many products. You can track things in real-time, keep track of inventories, and spot sales trends. Xero has made it easier for more people to automate inventory activities, better manage market dynamics, and improve pricing thanks to its recent purchase of locating Inventory. Customers of Xero can now sell their products through new channels.
It is straightforward due to an interactive map that displays information such as invoice due dates and outstanding debts.
- Send and track invoices, and observe when the client receives them.
- Inventory management
- Reconcile financial accounts.
- Connect to the bank
- Online assistance that is exceptional
- Keep track of your payroll.
- Using the Xero Mobile app, you can pay your bills.
- Multi-currency support
- Work out the sales tax
Xero offers three main plans, but they change based on where you’re from.
For US-based business:
- Early option – $9
- Growing option – $30
- Established option – $60
For business in other nations:
- Starter option – $20
- Standard option – $30
- Premium option – $40
|Can connect with Cloud.||Entry-level can send only five invoices/quotes|
|Has multiple apps|
3.3 Zoho Books
Micro Businesses require easy accounting software, which Zoho Books provides. Zoho Books has essential functionality for small businesses and more complex capabilities like contract billing and tracking. It also offers integrations, allowing you to use the program as your company grows. Because of its ease and value, we chose Zoho Books as the top accounting solution for microbusinesses.
Business owners can issue invoices and handle their accounts on the go using Zoho Books. Even the apps are available on your Apple Watch and Android smartwatches. Zoho Books allows you to schedule when reports should run and then receive them via email. CRM software and social media marketing, email marketing solutions, spreadsheet editors, and other productivity applications are available through Zoho’s suite of integrated business apps.
- Invoices can be created in seconds.
- Payment reminders should be sent.
- Allow clients to pay via the internet.
- Add expense receipts to your account.
- Keep track of your Inventory.
- Reconciliation of bank accounts
- Templates for invoices
- Free trial for 14 days
- Multiple languages are supported.
- Compatible with Stripe
- Billing for a project
- Keeping track of time
- Contacts for customers and suppliers can be created, edited, and managed.
You may either get Zoho Books alone or get Zoho One to obtain the whole set of Zoho features (which includes Zoho Books).
Price of Zoho Books:
- Basic – $9
- Standard – $19
- Professional – $29
Price of Zoho One:
- All employee pricing” costs $35 per employee
- Flexible user pricing” costs $90 per user
|Zoho accepts a variety of payment methods.
|Purchase orders, inventory tracking, and such features are only available inexpensive plans.|
|Payment reminders can be set up automatically.|
|It’s mobile-friendly and responsive.|
|On the entry-level Plan, you can have up to 50 contacts.|
QuickBooks Online is a functionality accounting platform that interfaces with a wide range of company apps reasonably priced. Many firms find it beneficial to link their credit card processing service to their accounting software to improve collaboration on their sales. Bill.com, Salesforce, and HubSpot are just a few of the prominent business software that QuickBooks Online interacts with.
QuickBooks’ built-in reports, including the trial balance, general ledger, and 1099 transaction detail reports you’ll need at tax time, eliminate the need to build financial reports from scratch. Another benefit of QuickBooks Online is its adaptability. QuickBooks caters to both DIYers and those who prefer more hands-on assistance.
- Mobile access is available.
- Keep track of your earnings and expenses.
- Receipts should be captured and organized.
- Processing of payroll
- Please send your estimations.
- Integrate Shopify and PayPal to track sales and sales tax.
- Link your bank and credit card accounts.
- Accounts receivable management
- Free trial for 30 days
- Receipt scanning
QuickBooks has a variety of solutions to suit your business needs, ranging from basic invoicing to complex business reporting.
- For Self-Employed – $15
- For a Simple Start – $25
- For Essentials – $40
- Plus Plan – $70
- Advanced Plan – $150
|Feature-rich software||It may not be useful for businesses outside the US.|
|Easy to use|
|It can be integrated with third-party tools.|
3.5 Versa Cloud ERP
Versa Cloud ERP is equipped with all bells and whistles that accounting software for small businesses should have. Versa Small Business ERP is a cloud-based solution optimized for growth. It comes with a straightforward and intuitive interface that doesn’t take a long time to get used to, with visible options and settings that are customizable for every business.
Thanks to the powerful dashboards and views you can get the information about all reports and use them to grow your businesses. In combination with its interface, you can keep a record of all transactions. The dashboards will display transactions in multiple currencies, which is ideal for international businesses that operate in multiple countries.
You can compare your transactions and reports based on different categories and divide the different types of accounts into sub-groups. More importantly, you’ll be able to automate the boring business processes and recognize patterns through reports that you can’t normally recognize with excel dashboards. Let’s face it, if you want to run a successful business, excel spreadsheets, alone, can’t meet your requirements.
Versa is ideal for all modern businesses with a vision. Even though it’s suitable for all sizes of businesses, the Small Business Cloud ERP is focused on growth from the start.
- Innovative and straightforward dashboards and reports
- Various AP and AR options
- Cloud-based solution
- Supports integrations with banks, General Ledger, Account Payable, Account Receivable
- Supports different currencies
- Advanced process automation
There are two key pricing options:
- User-based plan which starts at $1,800/yr per user
- Revenue-driven plan which starts at $2,500/yr
- E-Commerce basic: 0$ but limited to one user
- E-Commerce plus: $149/mo for 3 users
|Cloud-based solution||A bit slow technical and customer support|
|Multiple integrations||You may need assistance when working with reports|
|Easy to navigate|
3.6 Wave (Free option available)
This one will surprise you — it’s an entirely free accounting program that includes all of the essential accounting functions. Wave is a free, easy-to-use, intuitive software that allows you to create professional invoices. It also has an easy-to-use feature for scanning receipts that can help you keep track of your costs.
So, what’s the catch here? Is it possible that it is truly free? Yes, it is correct. Wave makes money by providing you with an online payments module, which allows your customers to pay your bills online and charges a nominal fee of $0.30 + 2.9 percent every transaction.
When compared to paid accounting software, Wave easily holds its own. This tool automates several areas of accounting, saving time for business owners. You may create and manage recurring invoices and transactions using the cloud-based accounting tool, set up bill payment reminders, and synchronize with your banks and credit card accounts.
Wave’s reporting abilities are also noteworthy. You may believe that a free accounting program would still not have many report options, but Wave proves you wrong. You may generate various reports ranging from working capital to statement of financial position, track costs, and submit receipt photographs. Wave connects with hundreds of third-party apps, including Etsy, Shoeboxed, PayPal, and Zapier.
- Invoices that can be customized indefinitely
- Scanning of receipts is unlimited.
- Tracking total income and expenses
- Connections to your bank and credit cards are limitless.
- Sales taxes that can be customized
- Calculation of currency rates automatically
- UI that is easy to use
- Reconciliation of payment transactions using automation
- Without any training, a quick setup is possible.
- Payroll management
- Wave is free
|It is a free software||Bills paid has to be manually marked as paid|
|It’s easy to use|
|Easy to connect to credit cards and banks|
ZipBooks is a cloud accounting software for smaller companies that is free to use. If you accept the constraints, you could use them for free. The excellent thing is that the premium plans are also reasonably priced.
You may issue invoices, manage suppliers/customers, and accept digital payments with the free version. Small and medium business owners would appreciate the premium version’s sophisticated features.
- Send an infinite number of invoices
- Manage an unlimited number of vendors and clients.
- Add a bank account.
- Accept Square and PayPal payments.
- Processing of payroll
- Reminders that are sent automatically (premium)
- a committed bookkeeper (premium)
- Keeping track of time (premium)
- Reconciliation of accounts (premium)
You may collect online payments and conduct payroll using their free Plan. However, if you need more complex accounting tools, you may upgrade to their premium subscription.
- Starter pack – free
- Smarter pack – $15
- Sophisticated pack – $35
- Accountant pack – customized pricing
|It’s free for use||Team feature is unavailable in the free versions.|
|Can manage many customers|
|Online payment is possible.|
|The sophisticated pack has lock features as well.|
The Sage Business Cloud Accounting, previously called Sage One, is a worldwide brand that provides small businesses with online accountancy and financial services. It began in Newcastle, England, in 1981 to provide forecasting and accounting software tailored to small enterprises. It’s now cloud-based, and you may customize it to fit your sector, company size, and requirements. Over three million organizations utilize it to link you with particular accounting solutions.
Because it’s a respected company, provides software that doesn’t require any expertise, and is set up for several users, it’s our pick for best accounting software for smaller businesses with multiple users. Your accountant can view your books and use the program for no extra charge.
- Organize your company’s finances and cash flow.
- Accept money and receive them.
- Invoices can be created and sent.
- Payroll administration
- Integrate with your bank account/financial institutes and other apps such as Zync, AutoEntry, and others. Available on all devices so you can monitor your finances on the move.
- Instruments for ensuring tax compliance
- Financial information and analyses in an easy-to-read dashboard layout
- Inventory management
- Cash flow projections
- Share real-time access with your accountant from any device.
- Human resources management and estimating are examples of add-ons.
Sage Business Cloud Accounting has två pricing tiers:
- Accounting Begin: $10 per month for basic-level accounting to assist with cash flow management.
- Accounting: $25 per month includes cash flow, invoicing, management, and real-time entries in a robust cloud accounting system.
|Affordable||Can be integrated with only one POS system|
|Offers 24/7 support|
|Has 30 day trial period|
4. Accounting Software FAQ
4.1 How does the accounting software help?
Many of the monotonous, manual procedures associated with maintaining your accounts can be automated with accounting software. Many products, for example, can be connected to your banking account and check bank activities against your records.
4.2 Is there a difference between cloud and desktop accounting software?
You must install and run desktop accounting software on your computer to use it. Your laptop also stores all of the information related to your accounts.
Accounting software that runs on the cloud is accessible over the internet. Nothing has to be installed on your PC. You must go to a webpage and sign in with your login details to use the software. This means you can access cloud accounting software from any device with an internet connection.
4.3 How to ensure that the software chosen will work for the long term?
Consider your business’s future ambitions when selecting accounting software and whether the program will be capable of supporting them. It’s also wise to seek a program that allows you to update or introduce additional features in the future. Most online accounting software enables you to upgrade immediately by simply selecting a new package. Many software programs also include add-ons or plug-ins that add extra features and capabilities.
4.4 Is it safe to use free accounting software?
Free accounting software can be entirely suitable if your company only needs to do simple things like raising invoices. Free software should be evaluated in the same manner as any other product. It could be a waste of money if it doesn’t have the features you require.
4.5 Should the software be chosen based on our industry?
Yes, in some situations. Specific accounting standards apply to companies functioning in certain industries or areas. Some construction companies, for example, must adhere to HM Revenue & Customs Construction Industry Scheme (CIS). If your company falls into this group, your accounting software must handle the demands.
Accounting software for small companies should contain tools that automatically manage your revenue and spending so you can focus on making strategic decisions for your company’s projected growth.
It can, for example, handle accounts payable and receivable, log transactions, including bank transactions, prepare quarterly reports, and reconcile data, so you don’t have to. It can also securely store documents, and some of the more expensive solutions include payroll or payroll integration, inventory management, multi-user access, and financial forecasting, among other things.
We hope our guide on the best accounting software for small businesses helps you choose an ideal software with all the necessary features for your company.