Accounting is more often than not a side of your business that you’d rather not think about.
But still, if you want to start making money online, it’s something that you’re going to have to deal with.
Good accounting software can translate the world of business finances from incomprehensible numbers to real reports about the health of your business.
To make sure you can spot a bad apple when you see one, we’ll talk you through all the essentials that great accounting software should have.
What to look for in accounting software
When it comes to small business accounting, you want to look for a platform that offers you all the accounting tools that you need in your day-to-day.
What’s considered essential might differ from one field to another, but there are a handful of features that almost all businesses need, no matter what their niche.
The best accounting software should do at least these things:
- Track money coming and going out. You want to know what customers owe you, and what you owe potential suppliers or other business partners.
- Payment gateway support. Most online businesses rely on a third-party payment gateway for processing payments for orders.
- Bank integration. You probably don’t keep your money under your pillow and that’s why the best accounting software comes with a wide range of bank integrations.
- Accountant access. Unless you’re doing your own bookkeeping, your accounting software should allow your accountant to access and view your financial data.
- Automation. Most of us would prefer to do as little manual data entry as possible, so make your accounting software do the work.
- Tax readiness. Especially if you’re selling products and services that have different tax rates, you should make sure your accounting software can look after tax preparation and reporting from start to finish.
- Reporting. Since the main point of accounting software is to help you understand the financial health of your business, pick one that provides the right kind of reporting.
To better understand what you need from your accounting software needs, start by trying to answer these questions:
- How many clients do you have currently? How many do you aim to have in 2 years?
- How are you collecting payments from your clients? Do you only use one payment gateway, or various options (bank transfer, bank and credit card, and so on)?
- How much can you afford to pay?
- Are you looking to only pay a one-time fee for a software license, or are you willing to commit to a monthly subscription?
- How much time are you willing to put aside for bookkeeping tasks every week? Are you looking to automate as much as possible, or will you need to analyze various reports and forecasts frequently?
It’s also important to talk to your accountant or bookkeeper about the kind of accounting software they would recommend.
There’s nothing worse than buying an expensive annual subscription for something that you don’t really need.
So, to kickstart your search, we’ve shortlisted our top picks for the best accounting software for small businesses.
QuickBooks Online is among the best accounting software for small businesses, and for a good reason.
Both business owners and accountants praise this easy-to-use tool that does almost anything you can think of.
QuickBooks Online is cloud-based accounting software that lets you take care of your invoicing, business expenses, and sales tax while offering multi-device support.
The platform estimates that it saves small business owners up to 40 hours each month when it comes to tasks related to small business accounting – that’s a full week’s work.
Most small businesses opt for QuickBooks because of its easy-to-use interface, and due to its popularity, accountants, too, are widely familiar with the software.
The premium plans also allow you to manage and pay bills, process multicurrency transactions and generate sales quotes and purchase orders. And if you need help tracking your inventory or tracking profitability, QuickBooks has your back.
You can get started with this powerhouse accounting software for $16 per month, but keep an eye out for discounts and campaigns – at times, you can save up to 50%.
Perfect for: Small businesses with steady monthly income
2. Zoho Books
Zoho Books has been around for a while – 10 years, to be precise.
And in that time, it’s cemented itself as one of the top contenders for the title of the best accounting software.
Zoho Books brands itself as the end-to-end accounting platform with easy collaboration and integration options.
You can manage your cash flow, keep an eye on your inventory and connect your bank accounts to the tool. This way, you won’t have to worry about a mismatch between your accounting software and the numbers in your bank account.
Since Zoho Books also offers cloud accounting, you can easily check the state of your business on the go. With a mobile app for both iOS and Android devices, expense tracking couldn’t be easier.
The tool’s other features include time tracking, contact functionality, and extensive reporting.
The intuitive user interface makes this accounting software suited for a novice small business owner: you won’t get lost in the world of double-entry accounting, income, and expenses.
And then there’s the price, it’s clearly one of Zoho Books’ best selling points as you can get started for just $9 per organization per month, allowing access for two users.
Perfect for: First-time small business owners
If you’ve heard of QuickBooks Online, you’ve probably also heard of its virtual namesake FreshBooks.
As another example of top-notch online accounting software, it’s designed with small business accounting needs in mind.
FreshBooks offers an all-round bookkeeping software for freelancers and self-employed people but has tailored packages for small businesses with employees and contractors, too.
Like many other accounting software companies, FreshBooks provides various accounting features, such as:
- Income and expense tracking
- Bank reconciliation
- Payment processing
Aiming to be the true all-in-one solutions, FreshBooks also offers various project management tools from file sharing to real-time collaboration within teams.
This means that you won’t have to worry about changing your accounting software the moment your business starts growing – instead, FreshBooks grows with you.
And since plans start from $4.50 per month (if you have 5 or fewer billable clients), FreshBooks is one of those accounting solutions that’s easy to try out without huge up-front commitments.
Perfect for: Freelancers, self-employed, small businesses with employees and/or contractors
Are you looking for accounting software that won’t break the bank?
You should consider Wave Accounting – it’s hands down the best accounting software option for a sole proprietor or the self-employed.
Tracking accounts payable to you and your business expenses is completely free with Wave. In fact, you can also create invoices and reports with no additional costs, either.
It’s hands down the best solution for anyone looking for basic accounting software that does the job while you’re growing your business.
You only pay for payroll and payment processing when you need them, meaning there are no additional costs for services or features that you don’t use.
Wave Accounting only charges a small transaction fee on processed payments and supports all major credit cards and bank transfer as payment methods.
You can also use Wave for payroll processing to pay employees, contractors, and other third-party business partners in minutes.
Your employees can securely access their payroll information and W-2 forms through their own Wave portal, and update contact and banking data as needed.
As Wave is essentially free software, if you’re running a small-scale business, it’s definitely a great online accounting software to consider.
Perfect for: The budget-conscious small business
Xero is a modern and all-inclusive cloud-based accounting software for small businesses.
But what makes it special is the commitment to user experience and its deep understanding of the accounting needs of a small business.
With Xero, you won’t just get the basics (think income and expenses tracking, cash flow reports, and the ability to send invoices) – you’ll get all the tools that you need to make good business decisions based on data, not guesswork.
The software features include third-party integrations, bank reconciliation, inventory tracking, and contact lists, meaning that you essentially have everything you’d need in a business management software.
And what’s more, since Xero offers partnership opportunities for bookkeepers and accountants, chances are that your accountant already knows the software too.
You can get started with Xero for $20 per month and send up to 20 invoices and quotes every month.
Expense claiming and project tracking add a few extra dollars on top of your plan per month, if you choose to use either.
Perfect for: Most small businesses
SAP Business One is a little different from all the other accounting software on our list.
Rather than offering mere accounting solutions, SAP One focuses on a complete management software package.
As an enterprise resource planning (ERP) software, SAP One is ideal for small to medium-sized businesses that look for software that goes beyond accounting and inventory management.
Some of SAP One’s most notable accounting features include baking and bank reconciliation, asset management, and general financial controlling.
The software also combines customer relationship and sales and marketing management, meaning that you can optimize your business operations to one platform.
SAP One is definitely a piece of software for a company that’s growing and needs to migrate to a custom-built tool that caters to various departments’ needs.
Since the tool is tailored to each business’s unique needs, prices are only available upon request. If you’re interested to find out more, it’s worth contacting your local SAP One representative.
Perfect for: Small to medium-sized businesses
Sage Business Cloud Accounting by Sage Intacct aims to get you in control of your bookkeeping.
Its basic plan is ideal accounting software for small businesses that need a quick and easy-to-use tool.
Sage comes with all the basic accounting features, from invoicing to bank account integration – all for $10 per month.
And if you need a little extra, for $25 per month you can use the smart auto-entry tool for expense tracking and get the most out of Sage’s reporting capabilities.
The basic plan doesn’t give you tools to help you manage your inventory for small businesses, but as far as small business accounting software goes, Sage is a safe accounting software choice.
Its auto-entry feature is particularly impressive: thanks to the mobile app, you can scan all your invoices and receipts with ease.
They get added to your bookkeeping automatically, meaning that the days of manual data entry are long gone.
And the best part is that the company offers other software solutions for both small and medium-sized businesses, meaning that you can easily integrate Sage Business Cloud Accounting software into HR and CRM solutions.
Perfect for: Small and medium-sized businesses
Okay, so this time you might be looking at the best accounting software yet (sorry, QuickBooks).
Kashoo brands itself as the world’s simplest accounting software, and impressively delivers on the promise.
The bookkeeping tool automatically categorizes your expenses and the smart invoices allow your customers to pay you directly through the invoice itself.
And the tool boasts impressive reporting and insights to help you make smarter decisions. Since all reports are in real-time, it means that you will know at any point how your business is doing financially.
Kashoo keeps its pricing reasonable, too: with no user caps, you can get started for $16.65 per month.
Or, make use of the 14-day free trial and see what you think of the tool before committing to anything.
It’s the perfect software choice for a small start-up that’s needing to cover the basics on autopilot.
Perfect for: Freelancers, self-employed and small businesses with a small team
While Expensify isn’t a full-blown small business accounting software, it’s amazing when it comes to business expenses.
This software is meant for the self-employed and those teams on the road, who normally deal with a mountain of invoices and receipts.
Since the Expensify credit card is linked to the mobile app, anytime you make a payment with your card, an entry is created to Expensify.
And as for receipts: all you need to do is use your phone’s camera to scan them and add them to the corresponding transactions.
The best part is that administrators can create automatic approval flows, meaning that particular types of transactions (say, food, and beverage orders below $10) get automatically approved.
Expensify is also easily synced with various accounting software options, meaning that all business expenses from the Expensify credit card accounts are automatically included in your bookkeeping.
Both teams and self-employed individuals can get started for $4.99 per month per user, and the biggest corporations can make use of the Control plan with HR and ERP integrations for $9 per month per user.
Perfect for: Freelancers, self-employed, bigger businesses
FreeAgent markets itself as an easy-to-use cloud-based accounting software for small business owners and freelancers.
Some of the most notable features include estimates and invoicing, expense tracking, time tracking, dashboard access, bank accounts and bank integration, and project management.
FreeAgent even takes care of sales tax, meaning that all you need to do is set it and forget it. If you ever need to check how much of a particular type of sales tax you’ve invoiced for, there’s a handy reporting tool ready to help.
We’d go as far as to say that FreeAgent is up there as one of the best pieces of accounting software for small businesses: the tools have been created with the user in mind, and all unnecessary features have been cut.
This means that you won’t find warehouse-level inventory management software within your bookkeeping app. Instead, you can focus on making decisions based on the financial data of your business.
And the product reviews are impressive, too: users generally praise the ease of use and note how the software has saved them plenty of money already in the first months.
With FreeAgent, you only ever pay a flat price of $24 per month – although most new users get the first 6 months half price.
But if you’re not sure, you can use the 30-day free trial to check this online accounting app out.
Perfect for: Small businesses without the need for inventory management
Are you sick of complicated accounting software?
LessAccounting might be the best accounting software for you if you look for an easy and simple accounting software solution.
With this tool, you can take care of the basic accounting tasks like proposal creation, send invoices and monitor their statuses, outsource your accounting and get your books ready for tax filing in a matter of minutes.
And since LessAccounting is completely browser-based, you won’t have to worry about downloading any complicated software to your computer.
The best part is that if you’re a budding entrepreneur with a handful of clients to invoice every month, you can start using LessAccounting for free.
You won’t be limited by a certain number of users and can accept payment via PayPal, Stripe, and Square.
For the self-employed and small business owners who look for the whole package, expect to pay $24 per month.
And if you’re a team or a fast-growing company, look no further than $36 per month.
Perfect for: Small business owners and start-up entrepreneurs
It’s not always easy to understand what type of accounting software best suits small businesses.
Especially if you’re only starting out. Thankfully, ZipBooks prices itself in its reporting and analytics tools, promising to help you get smarter when it comes to your business and finances.
Like most of the accounting software mentioned above, ZipBooks too offers good basic invoicing, billing, and accounting tools to keep your business functioning from day to day.
But what really matters with this accounting software is the analytics and intelligence.
ZipBooks has inbuilt analytics tools that help you assess and understand how healthy your cash flow is and how well your business is doing.
From a smart business health score to machine learning and invoice quality scoring, ZipBooks aims to help small businesses grow and scale sustainably.
The best part must be the smart search – instead of having to comb through bank statements, the ZipBook dashboard brings all related queries together with a nifty search function.
For those who need basic invoicing and reporting only, you can get started with ZipBooks for free. But the data-hungry small businesses are better at opting for the Smarter or Sophisticated plan, starting from $15 and $35 per month, respectively.
Perfect for: Small businesses looking for serious growth
Plooto (name no doubt inspired by the planet itself) promises to be your mission control for all accounts payable and receivable.
Rather than being an accounting software, Plooto is a payment management platform like no other.
You can use it to pay for both domestic and international clients as well as receive payments from both home and away.
Since the software syncs with your accounting software, you won’t have to worry about any manual data entry. Also, the tool gives clients various options for paying, making Plooto a versatile and agile piece of kit to add to your accounting arsenal.
Plooto also offers integrations with both Xero and QuickBooks, so if you’re already using either, you’re looking at setting up the app in next to no time.
It’s also not an expensive payment solution – you can get started for $25 per month regardless of whether you’re a business or an accountant.
If you’re running an online business, implementing Plooto is a must.
Perfect for: Freelancers and small eCommerce businesses with international clients
ScaleFactor has a slightly different proposition to the other accounting software on our list: it prides itself on being an accounting software, made by accountants for small businesses.
It aims to relieve the business owners from the time-consuming and difficult bookkeeping tasks. And thanks to its Xero and QuickBooks integrations, ScaleFactor has proven itself quite the hit when it comes to software for small business entities.
The tool manages and classifies transactions, updates the general ledger, manages expenses and payroll, and makes sure bills are always paid on time.
ScaleFactor can even be used to generating profit-loss statements and balance sheet preparations. In short, it’s software that makes sure you’re bulletproof come tax time.
You won’t be able to use ScaleFactor for inventory management or to send invoices, but if you’re already using other accounting software, like QuickBooks or Xero, ScaleFactor promises to take your accounting to another level.
You can start using ScaleFactor for just over $30 per month if you opt for an annual plan: the Principal plan costs $399 for the whole year and $549 for businesses that need AP/AR review and reporting on top of it all.
Perfect for: All businesses looking to scale up
PlanGuru is a business budgeting software aiming to help businesses plan better by understanding their business finances better.
The tool makes it easy to view financial data, create forecasts and use reports for strategic planning.
Offering both cloud-based and desktop plans, PlanGuru is a great companion for fast-growing businesses that need to quickly understand big amounts of data.
Since the tool comes with QuickBooks, QuickBooks Online, Xero, and Excel import options, you won’t need to worry about additional software spend, either.
PlanGuru comes with over 20 forecasting tools that make it easy to create forecasts for your income statement, balance sheet, and cash flow statements based on previous years’ data.
The tool aims to make financial analysis fast and easy so that businesses can be prepared for anything and everything.
You can try PlanGuru for free, and with the 30-day money-back guarantee, investing $99 per month definitely feels like a safe bet.
Chances are that with the business intelligence PlanGuru provides, the software will pay itself back in no time.
Perfect for: Established and steady-growing businesses
Which accounting software is best for small businesses?
When you’re looking for the best accounting software for your business, you need to first understand what you’re looking for in your bookkeeping tools.
Do you need help chasing your clients for payments? Then your business would benefit from accounting software that automatically schedules and sends out payment reminders.
Or are you looking for a tool that helps you create reports to aid your decision-making? In that case, it’s no good opting for software that offers only a basic dashboard for money coming in and money going out.
If you already have an accountant, it’s good practice to ask them which software they would recommend and what they use themselves.
Chances are that your accountant will get your taxes filed much faster with a tool they know inside out, after all.
To steer you in the right direction, here are our picks for the best small business bookkeeping software:
- Best overall. QuickBooks has been the industry standard for a while, and it’s understandable with its good array of features available and affordable price.
- Best free. Wave is the go-to tool for small-scale freelancers looking for a basic and free bookkeeping service.
- Easiest to use. Kashoo is simple, intuitive, and a great choice for a small business owner who’s looking for comprehensible accounting software.
- Best for freelancers. FreeAgent offers all the features a one-person company could need.
- Best value for money. Xero comes full to the brim with great features, but costs less than many other providers.
- Best for eCommerce. QuickBooks has your back if you’re running an online store, making it easy to manage both inventory and outstanding client payments.
- Honorable mention. ScaleFactor is a must-buy if you’re serious about growing your business, thanks to its numerous automation features.
Accounting software should be your friend, not your foe
Listen, no one gets excited come tax time.
But as a business owner, you should take bookkeeping seriously: when done right, understanding what the numbers actually represent can help you pivot when faced with an unexpected circumstance.
Good accounting software helps you identify which products or services are causing you to leak out money so that you can build a sustainable business.