Ask the majority of small business owners, and they will provide quite a few reasons about why they’ve started their businesses. Rarely will you hear those owners list doing their own accounting as a reason, even though they know how important proper accounting is for the long term success of the business.
The best accounting software can help you reduce the amount of time you have to spend on accounting, which will give you more time for the parts of the business you actually enjoy.
At its heart, accounting software tracks how money flows into and out of your business. (Hopefully, quite a bit more coming in than going out.) With proper accounting data, you may find correctable mistakes you’re making in day to day operations that are costing the business quite a bit of money. Additionally, you need accurate accounting information for tax time.
Perhaps when you started your small business, you could handle the accounting it needed with pencil and paper or with a spreadsheet. As you grow, though, these simple methods may lead to errors that can cost you dearly. Finding great accounting software can help you handle invoicing and work orders too, saving even more time.
The Best Accounting Software Options to Consider:
When it Makes Sense to Invest Into Accounting Software
Don’t underestimate the importance of finding the right accounting software for your business. It can simplify how you run things, saving time and reducing costly errors. However, you don’t want to overspend on accounting software that you don’t really need. Here are some tips to help you determine whether now is the right time to purchase the best accounting software.
- Saving time: When you find that your current accounting method is taking far more of your time than you’d like, switching to a dedicated accounting software package will free up more of your time … after you learn how to use it, of course.
- Current financial picture: Through reports the accounting software will generate for you, you’ll be able to see exactly how your business is spending and earning money. If you’re struggling to see the big picture currently, the software will help you.
- Avoiding mistakes: If you are using a manual entry accounting method, you may make mistakes in data entry and calculation. Accounting software can alert you to potential mistakes, allowing you to correct them before it’s too late.
- Protecting your data: Accounting software often exists in the cloud, and it will contain built-in encryption and password protection, ensuring your business’ financial information is safer than with manual accounting methods.
- Forecasting growth: Use the best accounting software packages to figure out the trends your business is experiencing, which will help you make plans for the future in a more focused way. By making plans using actual and accurate data, your business can grow in a successful way, rather than haphazardly.
#1 – QuickBooks Review — The Best For Providing Extra Features
QuickBooks is certainly the most well-known among accounting software options for small businesses, backed by the giant Intuit brand. This popularity is an advantage for its customers, who are good about helping each other solve problems through online forums.
For those who need more than the basics with their accounting software, QuickBooks delivers a strong package. It can track inventory, manage invoices, develop detailed reports, and send data to and from other packages.
QuickBooks is pricey versus some others, and it can be a little tricky to figure out which tier is the best one for you. Some features do not carry over from tier to tier, which is a problem if your business is growing.
- Very easy to use
- Powerful brand name
- Gives you far more features than typical small business accounting software
- Shares data easily with other packages
- Higher than average price
- A few features will not go with you as you move to a higher tier
- Simple Start: $8 to $25 per month (1 user)
- Essentials: $12 to $40 (3 users)
- Plus: $21 to $70 (5 users)
- Advanced: $45 to $150 (25 users)
#2 – Sage Business Review — The Best For Basic Needs
When you want your accounting software to hit the basics and not become bogged down with features that you don’t really need, the Start pricing tier for Sage Business is an excellent choice. It has a very low price point, and it is very easy to use.
Unlike some other low priced options for small business accounting, Sage has a strong mobile app that allows you to manage your accounting needs from anywhere. For beginners who are a little nervous about doing their own accounting, Sage offers multiple customer service options for walking you through using the software.
Sage is not going to match the needs of medium or large businesses, as its design is too simplistic. But for those small businesses that need nothing more than invoice generation and tracking, as well as the ability to download data from the bank, Sage keeps things simple.
- App is stronger than you may expect at this low price point
- Software excels at the basics
- Customer service is strong
- Too basic for larger businesses
- No option for adding payroll services
- Accounting Start: $10 per month
- Accounting: $25
#3 – FreshBooks Review — The Best For Freelancers
Freelancers and those businesses with a small number of employees will find everything they need to track their accounting like a big organization with FreshBooks.
FreshBooks excels in two areas where these types of businesses typically struggle: Invoicing and general accounting. Generating invoices quickly and then tracking the status of your invoices is a snap with FreshBooks. Many of your clients should be able to pay you directly from a link inside the invoice with this accounting software.
We also really like the layout and usability of FreshBooks’ mobile app, which greatly simplifies using the service.
- Outstanding at generating and tracking invoices
- Mobile app is smartly designed
- Handles basic accounting well
- Customer support is above average
- Works best when only one person needs access
- Lite: $4.50 to $15 per month (5 client limit)
- Plus: $7.50 to $25 (50 clients)
- Premium: $15 to $50 (500 clients)
- Custom: Custom price for more than 500 clients
#4 – Zoho Books Review — The Best For Mobile Access
Best for Mobile Access
For a small business owner who's always on the go, Zoho Books has a strong and highly compatible mobile app that allows for accounting from anywhere.
For those businesses that want to be able to manage their accounting from anywhere, Zoho Books offers one of the best accounting software apps for mobile devices. Additionally, its app is compatible with more brands of devices than any other of the best accounting software packages on our list. The app gives you nearly all of the features that you’ll have with the web browser dashboard, including managing invoices and running reports.
Zoho Books is compatible with multiple online payments services, meaning your clients can pay your invoices directly through a link in the invoice, no matter what kind of payment service they use.
If you need to be able to generate your business’ payroll through your accounting software, though, Zoho Books does not have this feature available.
- Strongly designed mobile app
- Compatibility with many devices
- Extremely easy to use
- Works especially well for self-employed
- No payroll services option
- Not the best for larger organizations with multiple employees
- Basic: $7.50 to $9 per month (2 users)
- Standard: $15.83 to $19 (3 users)
- Professional: $24.17 to $29 (10 users)
#5 – Xero Review — The Best For Small Businesses
Best for Small Businesses
Xero's pricing tiers are made for small businesses that plan to grow in the future, simplifying accessing upgraded features.
For small business owners who do not want to spend a ton of time on accounting, Xero hits all of the basics. It doesn’t quite make accounting fun, but it greatly simplifies the process of tracking your small business’ finances. And for those businesses that expect to grow in the future, it can go beyond the basics to meet their needs, as moving to higher tiers with advanced features is easy.
Xero has always been a cloud based piece of accounting software, and it’s especially popular among Macintosh users for this reason, as they’ve always had access to the software’s full feature set, unlike with some other on-premises packages. You’ll receive a low introductory price with Xero as well.
If you prefer to access customer support over the telephone, Xero doesn’t fit this use case, as it has only email and chat customer support.
- Excellent overall feature set
- Low starting price
- Especially popular among Mac users
- Strong mobile app integration
- No phone option for customer support
- Early: $9 per month (5 invoice limit)
- Growing: $30
- Established: $60
#6 – Kashoo Review — The Best to Be Up and Running Fast
Best to Be Up and Running Fast
Don't panic when you suddenly need to generate invoices for your business, as Kashoo's accounting software allows you to be working within a few minutes of starting the sign-up process.
For most small businesses, finding the best accounting software requires a lot of study and comparison shopping. For a new sole proprietor or freelancer who suddenly needs to be able to generate invoices and track expenses, though, getting up and running quickly may be the primary focus.
Kashoo makes the setup process as easy as possible, and you can be using the software within a few minutes. This is one of the easiest software accounting packages to use, as it gives you basic features with no hassles. Pricing is easy to understand with Kashoo, but considering its lack of advanced features, we’d prefer that it carried a slightly lower price per month. However, it does not put a limit on the number of people who can use the software, which is a nice feature.
You can use the cloud based Kashoo anywhere through its impressive iOS app, but, unfortunately, no Android version of the app exists yet.
- Setup only requires a few minutes
- Strongly performs the basics, like invoice generation
- No limit on the number of individual users you can have
- Easy-to-understand pricing
- No Android app version
- Report generation feature is not as good as some others
- $16.65 to $19.95 per month
Methodology For Choosing The Best Accounting Software
As you are seeking an accounting software package that will work for your business, figure out which areas and features will be most important for your business, and then look for those packages that successfully match those needs.
Make sure you consult with those in your business who will be working with the software regularly (if others besides you handle the accounting). Those who work with it every day may want specific features to simplify the job. Here are the areas we emphasized when selecting the best accounting software packages.
The majority of accounting packages will have various pricing tiers based on the number of billable clients or on the number of people in your organization who have access to the software. Some packages have an introductory price for a few months. Additionally, some offer discounts if you pay for a year in advance, rather than month to month.
Understand that some manufacturers have add-on costs for certain features in the software, such as payroll generation. If you only need the basics, these fees won’t affect you. But if you will need some extra features or regular tech support, the cost of the software could rise quickly.
Some software packages give new users a free trial period to try out the software. This is a good way to determine whether the accounting software’s interface is easy to use, and whether the feature set is able to match your needs.
With some accounting software packages, you can set up user permissions. This is a good feature if only one or two people at the business need full access to the software with full editing permission. You then can give other people at work access to financial reports only.
Some of the best accounting software packages are cloud based only, which means the software manufacturer stores your data on remote servers, rather than you storing the data onsite. You’ll pay a monthly subscription fee for cloud software, versus paying a one-time fee for on-premises software.
Using the cloud provides you with a higher level of security for your data than you probably can attain on your own. Additionally, software makers can update cloud accounting packages regularly, ensuring plugging of any security holes immediately and giving you access to the latest features right away. You also can access your data from anywhere when it’s stored in the cloud, whereas with on-premises software, you primarily will work at the physical office.
However, if you feel more comfortable having a software package that runs the traditional way, on your computing hardware at your site, those options exist too. Cloud software continues to grow in popularity, so finding an on-premise vendor probably will become more of a challenge in future years.
The majority of accounting software packages will offer a mobile app, so you can check your invoices and other financial data from anywhere. If being able to work on accounting away from the office is especially important to you, make sure the app gives you nearly all of the features you’d have with the desktop interface.
Data Sharing Compatibility
For an accounting software package to be truly beneficial for your business, it should have the ability to send and receive data from your various financial partners.
If you can download transactions from your bank, send employment data to your payroll generation provider, and send tax information to your preparer, you’ll save quite a bit of time and you’ll reduce the chances of data entry errors.
If the goal for your small business is to grow into a large business, you may want to look for an accounting software package that has the ability to grow with you, such as through gaining extra features for customization or for batch invoicing.
If you suddenly need to add several freelancers to your workforce, or you need to hire multiple full time employees on a temporary basis, the accounting software needs to be flexible for those changes.
Certain accounting software packages may have features to help specific types of businesses track their finances more successfully. For example, a construction company or a plumber will have different needs than a retailer.
For certain businesses, tracking inventory is extremely important. But if you operate a service oriented business, you may not carry inventory, and accounting software that focuses on inventory will not match your needs.
Some accounting software can help you track multiple areas of your business beyond incoming and outgoing finances. Depending on how your business operates, you may want some extra capabilities in the software. Some of the options may include:
- Generating payroll
- Customer contact information storage
- Automatic invoice creation on a certain day of the month
- Merging data into tax prep software
- Payment acceptance
- Reminders of due dates for bills
- Setting company budgets
- Tracking sales
Summary: Finding the Best Accounting Software
With the best accounting software, there is no one-size-fits-all option. What’s good for your business may not meet the needs of the business across the street.
At a minimum, your accounting software should give you clear information about your company’s finances and it should save you time. Certainly, the majority of accounting software packages can do far more. But if the software you select can’t handle the basics, it doesn’t matter how many add-on features it gives you; it won’t be as useful as it could be.