11 Best Accounting Software for Small Business

11 Best Accounting Software for Small Business

accounting software for small business

If you run a small business, keeping a close eye on your finances is critical for your success.

Accounting software is an important tool for your small businesses. 

The accounting software you choose should make it simple to keep detailed and accurate books for your business.

When choosing a software solution, select software that utilizes double-entry accounting,  provides live support, generates reports, and integrates easily with the business apps your company already uses.

While there are many options for your company’s accounting software needs, we’ve rounded up 11 of the most effective selections to keep your small business in the black.

Let’s take a look.

Why Do Small Businesses Need Accounting Software?

Bookkeeping for your small business is complicated and time-consuming, especially if you track your income and expenses on a spreadsheet.

This bare-bones fix for accounts receivable (income) and accounts payable (expenses) tracking does not provide the functionality necessary to: 

  • Determine your business’s profitability, 
  • Show income trends, 
  • Project tax payments, and
  • Predict whether or not your business will hit its budget targets

Small business owners need accounting software to help them track accounts receivable and accounts payable. However, your accounting software should also provide insights into your business and give you an accurate overview of how your business is performing.

This provides a clear picture of your company’s profitability and prepares you for tax season.

Why is this important? When you have a deeper understanding of and control of your company’s finances, you are better equipped to make good decisions and plan for the future.

There are various accounting software tools available for small businesses, providing different price points and capabilities.

Generally, small businesses do not require any software customizations, and “out of the box” accounting software provides all the features and tools you need, as well as some you may not have considered.

What Does Accounting Software for a Small Business Do?

Small business accounting software effectively reduces the amount of time you spend on manual tracking of income and expenses by allowing business owners to automate workflows and sync financial accounts.

Most small business accounting software is easy to use, even for those without financial or accounting experience.

Cloud-based accounting software and smartphone apps make it convenient for small businesses to access their financial data anywhere and provide accountants and tax professionals access.

Accounting software for small businesses handle:

  • Accounts payable
  • Accounts receivable
  • Invoicing customers
  • Syncing bank and credit card information
  • Tracking time
  • Tracking mileage
  • Collecting online payments from customers
  • Creating purchase orders, credit notes, and other statements
  • Preparing basic financial statements and reports
  • Reporting detailed business insights
  • Tracking payroll and freelancer expenses
  • Providing user access for accountants or tax professionals

How Does Accounting Software Work?

Getting started with small business accounting software usually takes between 15 minutes to several hours, depending on how long you’ve been in business, how organized your finances are currently, and the complexity of your business.

After the initial setup of your account, you will need to provide information about your company structure, customers, and vendors. You will also input information about the products and or services you sell. The completeness of the information you provide at this stage helps determine the quality of the insight the software provides later and the ease with which you can execute invoicing, payments, and reporting on an ongoing basis.

Providing less information at the early stage can get you up and running faster, but the more information you provide early on will allow you to benefit from the robust automation most small business accounting software offers.

If the time required to complete the initial setup seems daunting, you can choose to enter your customers, vendors, and products as you complete new transactions. 

The first option requires a greater time commitment upfront, but will provide deeper insights into your business faster.

One of the most significant advantages of using a small business accounting website is that it reduces repetitive data entry. Once you create a customer or vendor record, you never have to input that information again. Any time you need to include a customer, vendor, product, or employee in a transaction, it will appear in a drop-down menu. 

You can also automatically import transactions stored in your checking and business credit card accounts. After entering your login credentials for the financial institution, the accounting software will import your recent transactions. 

If you would like to allow your customers to pay with credit cards or bank withdrawals, you’ll need to connect your account with a payment processor such as PayPal, Stripe, or Square. Additional payment processing fees will apply, but providing this convenience to your customers generally facilitates faster and easier payments.

Once you have entered information about your customers, products, and vendors, you will be able to start creating invoices and record expenses. 

One useful feature small business accounting software platforms provide is seeing historical activities of your individual records.  This gives you an instant overview of your business relationship with the specific client or vendor. 

Most of the sites also allow you to include other helpful information such as a customer’s birthday, kids’ names, or how long they have been your client. This feature helps build and maintain relationships with your customers.

 

Instant inventory transparency

Implement an IMS to gain greater inventory control, and less costly mis-ships.

 

How Does Accounting Software Invoicing Work?

Once you have completed an invoice for your client, you have multiple options. You can save the invoice as a draft or final version, and print, duplicate, email, or save it as a PDF. Many of the small business accounting software we recommend enables you to easily integrate with platforms and applications you already use, such as Gmail.

If your account connects to a payment processor such as PayPal or Stripe, your invoice will include information explaining how the customer can pay their invoice via credit card or bank withdrawal.

You can also set your invoices to automatically recur on a regular schedule,  and record payments.

How Does Accounting Software Expense Reporting Work?

Small business accounting software services closely track your company’s expenses. This feature is a significant benefit because it is one area where small businesses can lose accountability if it is not carefully monitored.

These services divide your expenses into different types, such as: 

  • Conferences 
  • Meals 
  • Office supplies 
  • Marketing materials
  • Web services
  • Attorney or professional fees
  • Advertising, etc.

When traveling for business, most small business accounting software provides an app allowing you to take pictures of your receipts with your smartphone. 

Several of these sites will attach your receipts to a manually entered expense form. However, others utilize OCR technology to read the receipts and transfer data (vendor, date, amount, etc.) to an expense form. 

This feature is a real timesaver, so if the accounting software you choose does not offer this functionality, you can utilize a free smartphone app such as Expensify to achieve the same result seamlessly.

How Much Does Accounting Software For Small Business Cost?

Many accounting sites offer free trial periods ranging from 14 to 30 days, which provides your business with an opportunity to check out the software’s usability and determine whether or not it is a good fit for your company. 

Several of the options we’re recommending for small businesses are permanently free. However, you should expect to pay anywhere from $10 to $200 per month for accounting software providing advanced functionality.

What Do I Look For in Accounting Software For My Small Business?

  • Double-entry accounting
  • Cloud access
  • Bookkeeper or accountant access
  • Accounting features 
  • Scalability
  • Automation
  • Ease of use
  • Number of users
  • Price
  • Customization options
  • Reporting capability
  • Integration with business apps you already use

The Best Accounting Software For Small Business

After comparing the features and benefits of the top online accounting service, these are our picks for the 11 best accounting software for small businesses.


1. QuickBooks Online

If you have any familiarity with accounting software at all, you probably recognize the name QuickBooks. 

One of the oldest and best-known accounting software options, QuickBooks is utilized by most small business accounting and tax professionals.

QuickBooks is a cloud-based software and may be accessed through your web browser or smartphone app.

The software allows your small business to track income and expenses automatically and provides information-rich customer and business insights.

QuickBooks provides integration with Mailchimp email marketing, which allows you to build comprehensive customer profiles and utilize the customer information you track in QuickBooks to segment your Mailchimp audience.

Another notable advantage of QuickBooks online is that it provides a live bookkeeping option for an additional fee, based on your company’s average monthly expenses. If you find yourself in a panic on April 14th because your bookkeeping is a mess, the QuickBooks bookkeeper can bring your financials up to date for tax season.

QuickBooks Online pricing starts at $25 per month, but they often run a promotion offering a free month or 50% off your first three months. The top-tier plan is $185 per month for 25 users.

Pros:

    • 30-day free trial
    • Robust mobile app does almost everything the software does
    • Scalable as your business grows
    • Integrates easily with QuickBooks online to accommodate payroll
    • Inventory management
    • Time tracking
    • Optional additional users
    • Integrates with Mailchimp marketing
    • Mileage tracking
    • 1099 contractor payment tracking

Cons:

  • Users have reported syncing issues with banks and credit cards
  • Adding additional users requires an upgrade
  • Slightly more expensive than other accounting software options
  • Can be more challenging to learn than other accounting software options

Learn the difference between QuickBooks Desktop vs. QuickBooks Online to see which software is best for your needs.

2. FreshBooks

At every subscription tier, FreshBooks when you send an unlimited number of invoices and estimates.

FreshBooks invoices are fully customizable, and its mobile app is highly intuitive and rich with features. This software option integrates well with many third-party applications.

Its robust suite of features makes it one of the stronger options for small businesses utilizing estimates, quotes, and invoicing. For project-based small businesses, Zoho’s project profitability tracking is a must-have.

In addition, FreshBooks offers payroll tracking through its integration with Gusto Payroll.

FreshBooks pricing begins at $15 per month for the Lite plan up to $50 per month for the Premium plan.  They offer a free month or 60% off your first six months across all plans.

Pros:

  • Easy to use
  • Mobile app is feature-rich and intuitive
  • Double-entry accounting with Plus and Premium plans
  • Customizable invoices
  • Time tracking with a Chrome browser extension
  • Unlimited estimates and invoices
  • Advanced payment processing options
  • Built-in mileage tracking

Cons:

  • The Lite plan doesn’t include bank reconciliation
  • Lite plan limits the number of clients to 5
  • Each pricing tier includes a single user, and additional users are $10 per month
  • No double-entry accounting for Lite plan

3. QuickBooks Self-Employed

QuickBooks Self-Employed is a scaled-down version of QuickBooks designed especially for freelancers and independent contractors.

The software has a beautiful interface and is easy to use, even for those without prior accounting experience.

Some plans integrate with TurboTax for easy state and federal tax filings.

QuickBooks Self-Employed pricing begins at $15 per month for the Simple Start plan up to $180 per month for the Advanced plan.  They offer a free month or 50% off your first three months across all plans.

Pros:

  • Dashboard and navigation are easy-to-use
  • Cloud-based
  • Tracks expenses and income
  • Import transactions from bank accounts
  • Assigns business transactions to schedule C categories  to simplify tax filings
  • Time tracking
  • Mileage tracking
  • Estimates quarterly income taxes
  • Live support
  • Mobile apps add functionality on the go
  • Turb
  • Ability to assign tags to transactions

Cons:

  • High price compared to other similar options
  • Invoices are not customizable
  • No templates for commonly used business forms such as estimates
  • Manual sales tax management
  • No project tracking
  • No functionality for recurring transactions

4. Xero  

Xero’s free unlimited users make it a strong pick for small businesses with multiple partners, or companies that want to delegate invoicing and expense logging to a staff member.

This small business accounting software offers a clean and easy-to-use interface and payment processing integration with Stripe and GoCardless.

Xero integrates easily with third-party payroll software and provides detailed reporting.

Xero offers a free 30-day trial. Pricing begins at $12 per month for the basic plan. Upgraded plans are $34 and $65. 

Pros:

  • Unlimited users at every subscription level
  • Automated bill and receipt capture
  • Double-entry accounting
  • Custom invoices
  • Robust reporting
  • Time tracking
  • Mobile access

Cons:

  • No live phone support
  • Basic plan limits bills and invoices (5 bills and 20 invoices per month)
  • Expense tracking is only available with the top-tier $65 plan.

5. Wave

Wave is free. The company makes money via payment processing starting at 2.9% plus 30 cents per transaction.  Because of this fee structure, small businesses will pay higher fees for credit card and ACH payments than other accounting software options.

Wave offers a free invoicing product software that provides unlimited invoicing and automated invoice reminders. If your small business has a payroll, Wave provides a service add-on for an additional $20-$35 per month.

Pros:

  • Free
  • Easy-to-use
  • Unlimited users
  • Double-entry accounting
  • Unlimited income and expense tracking
  • Unlimited bank and credit card integrations
  • No contracts for hidden charges

Cons:

  • Not a good fit for bigger or fast-growing companies
  • Does not offer the functionality of the other accounting software options, such as time-tracking
  • No phone support
  • Offers limited third-party integrations
  • Higher fees for both credit cards and ACH payments

6. Zoho Books

One of our favorite features of Zoho books is its robust automation.

Zoho Makes it simple to automate your workflows, such as applying discounts or late fees, or sending email alerts for invoices that exceed a preset amount.

This small business accounting software offers high value at a low cost and integrates easily with  Zoho’s customer relationship management (CRM) software, Zoho CRM. 

Zoho’s basic plan is free. Upgraded plans are $20, $50, and $70 per month, discounted if you pay yearly.

Pros:

  • Easy to use
  • Automated workflows
  • Time tracking
  • Automatic tax calculations
  • Double-entry accounting
  • Mobile access
  • Phone and email support
  • Offers specialized software for startups and nonprofit organizations
  • Integrates seamlessly with other Zoho products

Cons:

  • Fewer third-party app integrations than other Small business accounting software options me
  • The top-tier plan only allows 10 users, and additional users are $3 each per month.

7. Sage

Sage is a cloud-based accounting software built for small to medium-sized corporations.

Many of Sage’s features are preset to enable businesses to immediately manage expenses, compliance, accounting, and project management.

Sage offers cloud backup and integration with Microsoft Office Premium.

One appealing feature Sage offers is industry-specific solutions for many business segments, including accounting, manufacturing, construction, distribution, and nonprofit.

Sage’s basic plan starts at $33 per month for the first year. After that, the basic plan will run you $56.08 per month. Upgraded plans are $52, $87 per month for the first year, discounted if you pay yearly.

Pros:

  • Double-entry accounting
  • Time tracking
  • Manage payroll
  • Invoicing and payments
  • Business reporting, including balance sheets and income statements
  • Offers features geared to small and mid-sized corporations

Cons:

  • More expensive than other similar options
  • Complex system can be challenging to use
  • Set up is labor-  and time-intensive
  • Geared more towards accounting professionals

8. GoDaddy Bookkeeping

GoDaddy Bookkeeping’s direct integration with Amazon, eBay, and Etsy make this small business accounting software a top pick for entrepreneurs and omnichannel eCommerce businesses.

GoDaddy Bookkeeping allows small businesses to create professional invoices, track tax deductions, log expenses, and accept PayPal, credit, and debit card payments.

The cloud-based software is flexible and easy to use, but lacks the more robust features and insights offered by other accounting software.

GoDaddy Bookkeeping has a starter-plan feel, offering solopreneur-friendly features such as time tracking, mobile access, and auto-generated Schedule C worksheets.  However, this software is less scalable than others we’ve recommended because it does not offer CRM or payroll integration.

The software can generate profit and loss statements and other business reports.

GoDaddy Bookkeeping’s pricing begins at $4.99 per month for the Get Paid plan up to $14.99 per month for the Premium plan.  

Pros:

    • Low cost
    • User-friendly dashboard
    • Effective invoicing tools
    • Direct integration with Amazon, eBay, and Etsy 
    • Easily calculates estimates for quarterly taxes
    • Import bank and credit card transactions
    • Auto-generated Schedule C worksheets
    • A good pick for solopreneurs

Cons:

  • Does not offer project tracking 
  • No bill payment
  • Does not allow additional client information
  • No double-entry accounting
  • No CRM integration
  • No payroll integration

 9. Sunrise

Sunrise is a free small business accounting software.  Like Wave, Sunrise’s free plan is fairly robust, and the site makes money via its payment processing service, Sunrise Pay.

Sunrise’s functionality is especially appealing to freelancers thanks to the ability to generate quotes and estimates, create recurring invoices, track expenses, and process payments.

Unfortunately, Sunrise lacks many critical features needed to support eCommerce businesses, including point-of-sale functionality and Shopify integration. The service does not allow users to track costs by project, which eliminates the software as a contender for project-based businesses such as marketing services and construction.

Sunrise’s pricing is free for the Free Forever plan up to $19.99 per month for the Sunrise Plus plan.  

Pros:

  • Free version contains most features
  • Double-entry accounting
  • Cloud-based
  • Good accounts receivable management
  • Mobile access offers most features found on website
  • Live support

Cons:

  • No time tracking
  • Does not provide CRM integration
  • Free version limited to one user
  • No project management
  • No bank account reconciliation
  • Does not prepare tax forms, such as the 1099 contractor form.

10. Kashoo

Kashoo is a cloud-based small business accounting software ideal for those who want to manage their own books but do not have prior bookkeeping or accounting experience.

Kashoo’s accounting software is a viable option for contractors, freelancers, and solopreneurs, but does not offer the scalability necessary for small businesses looking to grow.

While Kashoo offers mobile receipt capture for iPhone users, there is no Android mobile app at this time.  The app also allows you to create invoices, track your sales, and enter payments.

A unique feature of Kashoo’s iPad app is that it allows you to access your business transactions and enter new transactions while offline, syncing your data automatically once you are online again.

This software utilizes WePay as its payment processor, allowing your customers to pay your invoices using Visa, MasterCard, or American Express. Invoice payments are automatically logged in your account and transferred to your bank.

Kashoo’s basic invoicing plan is free. Pricing for more advanced plans begins at $20 per month for the middle tier up to $30 per month for the highest tier.  They offer a free 14-day trial for the paid subscription plans.

Pros:

  • Easy to use
  • Double-entry accounting
  • Easy to sync with bank accounts and credit cards
  • Unlimited users
  • Mobile access for iPhone users
  • Project tracking
  • Customizable invoicing
  • Live support and excellent customer service

Cons:

  • Limited scalability
  • Does not provide time tracking
  • No CRM integration
  • No Android mobile app
  • Limited features

11. AccountEdge Pro

AccountingEdge Pro offers a cloud-based option as an add-on but is primarily a desktop-based accounting service. 

It offers robust accounting tools to manage your clients, income and expenses, CRM, time tracking, and payroll. If your small business has outgrown cloud-based small business accounting software, AccountEdge Pro may offer the additional features your company needs.

AccountingEdge Pro’s pricing begins at $499 per year for a single user. Additional users are $359 each per year or $999 for five additional seats.

Pros:

  • Double-entry accounting
  • Customizable invoices
  • Account Set-up wizard
  • Integrated payroll processing
  • Tax management
  • Track work in progress
  • Easily track and manage assets, liabilities, income, and expenses
  • Prepare bank deposit and print checks

Cons:

  • No dashboard makes navigating the site more challenging
  • Upcharge for cloud services
  • Does not provide the ability to download bank transactions
  • Account set-up is time-intensive
  • Limited integration capabilities
  • No time tracking
  • No automatic payments

 

Final Thoughts

Choosing your small business accounting software can be challenging, but the benefits to your company are worth the effort.

When choosing an accounting software solution, make sure it is scalable to meet your business’s needs in the future. All of the software options we recommend are available in multiple versions so you can start with a low-cost option and upgrade to a more robust plan as your business grows.

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