August 27

The Best Accounting Software For Small Business

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The best accounting software for small businesses and payroll is worth the investment because it makes keeping track of your businesses finances easier and keeps your business on track.


These programs use double-entry accounting, provide live support, and give you useful reports that can be generated quickly with a few clicks of the mouse to save you time from doing tedious calculations by hand.

Accounting software is a life-changing tool for any small business owner. Each software has a variety of features and benefits for your business.


You can automate things like payroll and tax calculations with ease, or use it as an all-inclusive accounting system so you can focus on running your business.


Even better, everything is right at your fingertips. No more sifting through piles of papers in drawers or filing cabinets looking for something important.

Accounting software has revolutionized small business accounting. Its use is quickly becoming a necessity for all types and sizes of businesses to help them stay on top of taxes, inventory, and payroll.

Accounting Software for Small Businesses

What's even better is many of them start working right out-of-the-box. Others may need a more complex customized solution but both are available.

Freelancers and the self-employed won't need to spend for complex accounting software as they only have themselves. There are more inexpensive options, such as QuickBooks Self Employed that offer the same functions at less than half of the cost.


Small business owners with more employees are going to want something that is built specifically for businesses that employ many people.

If you have a small business and want to save time on managing your finances, I've put together an overview of the best accounting software that can help.


There are programs with varying features such as invoicing options, credit card processing integration, and payroll management. Find the one best suited to your needs by reading my choices of the best accounting software for small business.


QuickBooks Online


QuickBooks Online is one of the very best accounting software for small businesses because it's so reliable. It has an enormous online community and tons of helpful resources.

The program can be accessed through a web browser or downloaded as an app to your phone, which makes it easy to enter all of that day's transactions from anywhere you are.

The design makes navigation simple, too. You can stay on one page with all your information in a convenient list format that won't make your head spin.

After the 30-day free trial, there are four options for subscription plans that cost $25/month (Simple Start), $50/month (Essentials), $80/month (Plus) and up to a whopping $180/month for the Advanced plan.


Typically, these first few months have discounted rates in order to get potential customers hooked on the product.

The monthly subscription can be upgraded as a company grows to accommodate more employees or to expand its operation into other states. There are many customization options when it comes to how information is relayed through their mobile app so that businesses of any size will feel at home here.

QuickBooks Payroll fully integrates with QuickBooks Online, which provides an easy way for employers to manage employee paychecks.

Simple Start is a great option for most small business owners who provide services because it offers all that they need to get started. If your company has products, then Essentials or Plus might be more appropriate as those subscriptions offer some added options around inventory control and customizations.

The Advanced subscription provides robust financial reporting powered by Fathom - an elite finance analysis tool used in many large companies across the world.

QuickBooks Online's app store has a variety of integrations with third party apps that make this accounting software even more powerful.

Quickbooks Online

$25 per month and up

Pros

  • The ability to scale
  • Used by accountants
  • Third-party integrations
  • Cloud-based system
  • App for mobile devices

Cons

  • More users require an upgrade  
  • Bank and credit card sync issues on occasion

Conclusion:

Intuit Quickbooks is a popular, affordable accounting software for small businesses. Intuit has been in the game long enough to have proven themselves as one of the most tried and true solutions out there with exceptional functionality that can suit any size company looking for an accessible solution.

Xero


Over two million users around the world use Xero, which was founded in 2006 in New Zealand. Popular in New Zealand, Australia, and the UK, this accounting software has a wide user base. Over 3,000 employees work for Xero and its U.S. division is expanding rapidly.


Xero is an easy-to-use web application for small businesses that doesn't require any accounting knowledge and can be connected to a number of other apps, including ones on your phone. It's cloud based with just the right amount of information displayed in its intuitive dashboard.


The company offers three monthly subscription plans and a payroll add-on to suit your needs. The Early plan is $11 per month, the Growing option costs $32 per month, while Established is $62 per month.


You can also opt in on Gusto's full service payroll which will run you an additional fee that varies based upon employee size.


If your business is just starting out and you don't have the need for complicated features, the Early plan might work best. The only feature it lacks are unlimited invoices/bills/transactions. This is because its limit of five each per month will be more than enough to handle a small-scale consulting or service provider with high ticket items in their inventory. 


If you're a growing company looking for additional capabilities like multi-currency management, expense tracking, and project costing then Xero has got what you need.

Xero

$11 per month and up

Pros

  • Cloud-based system 
  • Apps for mobile devices
  • Dependable payroll integration
  • Marketplace for third-party apps
  • Inventory management made simple

Cons

  • Reports are limited 
  • Customer service is limited

Conclusion:

If you are looking for a cloud-based system that you can use from anywhere, Xero could be your software of choice. You can also use it to manage inventory and do payroll. This is a software that will grow with you as you build out your business.

FreshBooks


FreshBooks is a feature-rich accounting software that helps business owners streamline their bookkeeping needs, send invoices in style and collect payments on the fly.


It’s one of the best options for small to mid-sized service based businesses looking for an easy way to manage all aspects of their finances from project tracking and time sheets, invoice sending with customizations like discounts or built in payment plans, as well as regular billing features, all wrapped up into one slick package.

FreshBooks started as a simple invoicing software, but has now expanded into more than 500 employees worldwide.

There are four different plans to choose from and each offer 10% off if you pay yearly and 60% discount for the first six months of your plan.


The Lite option is $15 per month with limited features, while Plus offers full access at $25 monthly price point. Premium gives unlimited storage space or team members at just 50 bucks per person each month. 


And finally, there's Select which can be customized based on what type of service you need.

FreshBooks has a variety of integrations that are convenient for your business. They include Shopify, Gusto, Stripe and G Suite among others which can be used to make invoicing easier or more professional depending on the needs of your company.

With so many third-party integrations available, FreshBooks is a great tool for invoicing and managing your business. For example, you can add stylized templates to make the invoice look more professional with just one click.

When it comes to business accounting, there are many options that can help you manage your finances and balance sheets. 

FreshBooks

$6 per month and up

Pros

  • Cloud-based system 
  • Easy-to-use interface
  • Integration of third-party apps
  • Plans are very affordable
  • Features for advanced invoicing

Cons

  • Inventory management not available 
  • Payroll service not available
  • Mobile app limitations

Conclusion:

Freshbooks is a great choice for small businesses as well as startups because of its intuitive interface, robust features set, and reasonable price tag.

Wave


Wave is a simple and intuitive accounting software built for small service-based businesses with no inventory or payroll needs. 


It’s free to use as long as you need it and is an ideal choice for freelancers who want something that covers all of their basic needs without the hassle of setting up more complicated features they don't need.

When taxes are due at year end, Wave offers easy access from any device so accountants can pull necessary reports quickly for preparing tax returns.

Toronto-based Wave was established in 2010. H&R Block recently purchased the company, which employs over 250 people.

The Wave Software includes features that most small businesses need to keep track of income and expenses, prepare financial reports, invoice customers, and scan receipts.


You can access these features online or through the mobile app. Payment processing and payroll are premium services, but all bookkeeping, invoicing, and reporting services are free.

Wave's payment gateway is what makes it money. It charges a 2.9% fee for Visa, Mastercard and Discover transactions, as well as 3.4% per transaction for American Express.

Wave provides two payroll plans that are available as an add-on service. The first option is $20 per month plus a flat fee of $6 for each employee or contractor processed by the service provider. For this plan, you will be responsible for completing and submitting your own payroll taxes to the IRS on time.

For $15 more, you can get the second option ($35 per month) and all of these tasks can be handled by Wave so that you don't have to worry about them.

The cloud-based app is easy to use and can be accessed by business owners without any accounting or bookkeeping experience. The software syncs with bank accounts, so you’ll always have up-to-date data on your finances anywhere in the world.

Wave

$0 and up

Pros

  • Free to start 
  • No transaction or billing limits
  • One account for all your businesses
  • Number of users is unlimited
  • App for mobile devices

Cons

  • Integrations with third-party apps are limited
  • Credit card fees and ACH fees are higher
  • Only 14 states offer full-service payroll
  • Inventory management not available

Conclusion:

Wave Accounting is an accounting software that’s specifically designed for small businesses. It provides free services such as invoicing and bookkeeping, but some features like payroll or credit card processing have a cost associated with them.

Faq

How Can Accounting Software Help a Small Business?

Accounting software is a technological resource that helps small businesses save time and money. Accounting software syncs business bank accounts with the application, which eliminates data entry by automatically transferring transactions from your online banking account to the accounting system. Once synchronized, you can categorize expenses into various accounts for an easy analysis of where all funds are going and how they're being used.

Is Accounting Software Easy to Use?

Accounting software is easy to use as long as you have a basic understanding of accounting principles. And considering that most people will never need more than the basics, it's not hard to learn them.

This type of software is a powerful tool for any entrepreneur or manager who wants instant insight into their finances and doesn't want surprises when they're banking on projections coming true.

How Much Is Accounting Software for Small Businesses?

Small businesses can choose from a variety of accounting software that ranges in price from $0 to $150 per month.

There are various options for what your company's specific needs may be depending on how robust or simple they need to have things run right now - such as tracking inventory levels and running payroll through them.