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Accounting software offers features for tracking the revenue and expenses of a business. The best small business accounting software has a wide range of reports that allow you to analyze the financial health of your business. These platforms also have dashboards that provide an at-a-glance overview of key financial aspects, like accounts receivable, accounts payable, historical sales data and cash flow. Small business accounting software is also useful for tax management, as it ensures that you accurately estimate your tax liabilities and save money accordingly. The best accounting software integrates with other key business systems, like payroll software and HR software, thereby eliminating the need to enter the same data manually in multiple systems.
Accounting software is an essential business tool. Depending on the program, it can help you create professional invoices, record incoming and outgoing payments, identify and follow up on past-due receivables, streamline tax management, and run reports that analyze and project your company’s financial health.
To help you find the best accounting software for your small business, we examined some of the most popular platforms on the market today. We looked for affordable, easy-to-use accounting programs that included time-saving features, such as automated bank feeds, automatic payment reminders, and online invoicing and payment acceptance. We also searched for software with comprehensive, customizable, real-time financial reporting because that is crucial for monitoring and understanding your business’s finances.
Small businesses
Payments
Invoicing
ERP tools
Accounts payable automation
Microbusinesses
Free option
Financial reporting
Free accounts payable
Inventory management
Receipt and expense tracking
$30 per month
$15 per month
$19 per month
Custom
$32 per month
$15/per month
Free
$49.58 per month
Free
$15 per month
$16.66/month (annual prorated)
30 days
30 days
30 days
14 days
30 days
14 days
N/A
N/A
N/A
15 days
14 days
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Limited
Yes
Limited
Limited
Limited
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
No
We found QuickBooks Online to be the best overall accounting software for small businesses. It provides four plan options for small businesses, as well as a separate option for self-employed users. Each offers features that are suitable for a variety of small businesses, ranging from startups to well-established companies. With the four options for small businesses, you’ll have access to all of the tools and reports you’ll need for accounting purposes, and you can seamlessly upgrade your plans as your business scales.
The platform is easy to set up and use on your own. However, if you want extra assistance, you can connect with professional bookkeepers and accountants who can help you configure the software in a way that makes sense for your business. Additionally, QuickBooks Online allows you to create custom invoices and forms so your company’s branding is always at the forefront of client-facing communications. For the features and services you get, QuickBooks is a bargain.
We chose Xero as the best accounting software for tracking and paying bills. Xero enables you to maintain excellent relationships with your suppliers and creditors while avoiding costly late fees. With Xero, you can ensure your cash flow is positive so you don’t come up short when it’s time to pay. On the user-friendly, customizable dashboard, you can see when each bill is due and review your invoices. The interface gives an immediate picture of your business’s financial position. You can view costs as they happen and then make instant modifications.
Because Xero is cloud-based, you don’t have to download or install any programs. It offers professional double-entry bookkeeping, so your transactions will be entered as debits as well as credits. The software also saves you time, because you can schedule upcoming payments and batch-pay suppliers in advance, thus automating a process that is typically manual. The new Hubdoc service allows you to capture data from bills and receipts. This further reduces your workload by eliminating manual data entry.
We recommend FreshBooks as the best software for invoicing. It allows you to develop professional invoices that match your brand, as well as track invoices so you know when customers received their bills and when their balances are due. It also facilitates online invoice payments so customers can pay you directly from the invoice.
The FreshBooks dashboard is simple to navigate. It includes time and expense tracking, project management features, and tools to create proposals for prospective clients. If you have employees, you can give them access to their projects and track their time and additional expenses.
The company recently launched an add-on with Gusto for full payroll integration and introduced a certification system for accountants. Bank reconciliation is performed continuously, which makes the software unique among competitors. FreshBooks has over 100 partners, so you can add plenty of features and connect with other business programs.
We chose Oracle NetSuite as the best accounting software for midsize and growing businesses that are in search of advanced features. As part of its robust enterprise resource planning (ERP) offering, Oracle NetSuite offers a cloud-based financial management solution that can track your financial data and automate a variety of essential accounting functions. Like any highly rated accounting software, it offers reporting, planning and billing capabilities. It also easily integrates with other software, including Oracle’s comprehensive suite of business solutions. It can also be used with multiple currencies, so it’s a great option for companies with a global customer base.
Oracle NetSuite is ideal if your business needs to expedite its accounts receivable and payable, accelerate deal closings, keep up with complex financial compliance obligations, and take advantage of a full suite of powerful business management features. It doesn’t limit the number of users or rely on third-party apps for customization. However, NetSuite may be cost-prohibitive and present a steep learning curve for small businesses that don’t need access to the advanced slate of features.
We chose Plooto as the best software for automating accounts payable. It lets you manage your payments in one central location, which gives you a clear picture of your finances. Payments, approvals and reconciliation are unified under one dashboard. The software includes smart approval workflows and secure electronic payments, which reduce errors and speed up the accounts payable process. Most notably, Plooto offers business accounts payable and accounts receivable automation, which helps you collect on past-due bills.
You can use the same system to pay all vendors, even those located outside the U.S. You can add payees in seconds, either by searching Plooto’s network of 150,000 suppliers and vendors or by adding them manually. Once a customer pays, the payment is automatically reconciled. You can pay electronically or via check with the integrations, as well as make batch payments, search records and set payment approvals.
We selected Zoho Books as the best accounting software for microbusinesses. Not all accounting software programs are appropriate for freelancers, independent contractors, sole proprietors, consultants, home-based businesses, individuals operating e-commerce sites and companies that employ fewer than 10 people. In those cases, the software may be too complicated, unnecessarily powerful and overly expensive. That’s not the case with Zoho Books. It works well for businesses with straightforward invoicing and accounting needs, and the low price (including free options for low-revenue businesses) is attractive for budget-conscious entrepreneurs.
Zoho Books is also scalable. As your small business grows, you can upgrade and integrate with other business applications. An easy-to-use, proprietary programming language called Deluge allows you to build custom functions, and a Zoho professional can help you with it. There’s also a mobile app for keeping up with accounting tasks on the go. Customer support in Spanish is available.
If you’re looking for effective, free accounting software, check out Wave Financial. It offers many important, high-quality accounting features at no cost to you. There are no monthly or annual fees, nor do you have to license software. Through the cloud-based accounting program, you can create and send invoices and set up automatic payment reminders. It also lets you run fundamental financial reports and quickly organize and review your data.
The only fees you’ll experience with Wave will come from selecting optional add-ons, such as payroll features, or accepting invoice payments. Wave charges a flat rate of 2.9 percent for most credit card transactions, but the rate for American Express is 3.4 percent plus 60 cents. Bank payments are 1 percent per transaction, with a $1 minimum fee. The company also has additional payroll and bookkeeping services that business owners can access for a fee.
It is essential for businesses of all sizes to quickly and easily create and review clear, well-organized financial reports. Sage 50 Accounting is our top choice for reporting because, depending on your plan, you might get access to a multitude of reports. Better yet, you can generate these reports in just a few clicks, and they’re crisp, clean and well organized. We even preferred Sage’s reporting to that of QuickBooks, which is renowned for its reporting suite.
Sage 50 Accounting is fast and easy to set up, and the system is simple to navigate. We like that workflow arrows guide you from one accounting task to its logical follow-up, thereby streamlining your processes. Admittedly, the software’s basic accounting features don’t quite compete with competitors’. But when you need advanced reporting tools, this gap in basic features might not matter much. For stellar reporting, Sage 50 Accounting is your best bet.
We recommend Melio for small businesses that are seeking user-friendly accounts payable tools without a lot of bells and whistles. It is excellent cloud-based software for managing invoices, receiving payments and managing bills. Melio also integrates with QuickBooks for free. There’s no charge to make payments through a bank transfer, but there is a 2.9 percent fee to pay by credit or debit card. Two paper checks per month are free; after that, they are $1.50 each.
Melio is very easy to use; it offers one of our favorite user experiences. Adding vendors is quick and intuitive. Melio lets you enter a vendor’s information manually, upload a file with that date or snap a photo of an invoice. You can invite internal users and external accountants to use the software and then assign roles and permissions. That way, you know who is accessing your information and what they are doing with it. You can set approval controls for transactions so you don’t overextend yourself or have a cash flow issue because you paid a bill early.
We chose ZarMoney as the best accounting software for businesses seeking inventory management features within their accounting tools. The plans are organized by “entrepreneur,” “small business” and “enterprise” to reflect each company type’s needs. The cost is based on the number of users, from one to more than 30. If you add or remove users, ZarMoney will automatically update your account and charge you accordingly. Each additional user costs $10 per month on the small business plan.
In addition to the transparent pricing, ZarMoney’s powerful cloud-based software includes inventory features that are unavailable with similarly priced competitors. You can manage inventory at multiple locations, transfer inventory between locations in one click, and manage barcodes. Plus, ZarMoney is easy to use and is adaptable for small and larger businesses, with customization and dedicated support and training for enterprise users. The software also offers a 15-day free trial so you can test it out before you buy.
As a small business owner, you might want accounting software only for managing your receipts and expenses. If so, Neat may be your best bet. This cloud-based tool enables you to upload your business receipts with the mobile app and categorize each one to keep you organized. Plans start at $200 per year, which equates to $16.67 per month.
With Neat, you get a good understanding of your cash flow, and you can run accounting reports to analyze your business’s financial health. This can reduce errors resulting from handwritten recording and makes tax time less stressful.
Accounting software helps business owners streamline billing and accounting, and it doesn’t have to cost a lot of money. Most programs offer several plans to accommodate your needs and budget.
There are typically two types of pricing models for accounting software: perpetual licensing or a recurring subscription. With a perpetual licensing model, you make a one-time payment for unlimited access to the software. With a subscription pricing model, you pay a monthly or annual fee.
For subscription pricing, expect to pay anywhere from $15 per month for a basic starter plan to $350 per month for a more advanced service plan. Other factors, like the included features and number of users, affect the monthly cost as well.
Regardless of the pricing model you select, watch out for hidden fees, which can include charges for customization options, installation or setup services, integrations, and maintenance or support services.
If your business is on a tight budget, consider free accounting software. Wave, for instance, provides many of the accounting and invoicing features you would find in paid programs. Zoho Books also offers a free plan for businesses with under $50,000 in annual revenue.
When you’re choosing accounting and billing software for your business, we strongly encourage you to take advantage of free trials to test the solutions and see which one offers the tools you need. Plus, spending time with the software beforehand will help you feel more confident in your decision.
Many aspects of accounting software make it a useful tool. If you’re a small business owner, it’s important to know which features to look for. Most online accounting software offers accounts receivable, accounts payable, banking and reporting features. Some programs include inventory management, project management, time tracking and payroll tools.
Here are some of the core features to look for in accounting software:
This feature connects the software to your business bank and credit card accounts to provide a daily update of your transactions. This saves time, as you will not have to upload transactions manually. It also gives you a daily, rather than monthly, overview of your accounts. A real-time bank-feed feature can assist with reconciliation, which allows you to make it a small daily task rather than a monthly ordeal.
When you log in to your account, you’ll be greeted by a dashboard that shows you an overview of your account activity and key metrics, such as cash flow, profit and loss, account balances, expenses, accounts payable and receivable, and sales. Some accounting programs allow you to rearrange the information.
If your business sends invoices, the ability to email them and accept online payments helps you get paid faster. Most accounting programs integrate with third-party payment processors; others require you to use their in-house processing services. It’s a plus for accounting software to serve as an invoice generator.
With this feature, you can schedule the system to automatically generate and send invoices for recurring charges, such as subscriptions. You can choose how frequently invoices are sent — daily, weekly, monthly or annually — and indicate whether there’s an end date to the billing.
This feature helps you remind customers about upcoming and past-due payments. Some have sample email text that you can use or customize. You can then choose when you want the reminders to be sent. Some programs give you the option to send thank-you emails to customers after you receive their payments.
Smart reconciliation tools identify potential matches between your bank transactions and the invoices you’ve entered into the accounting software. This saves you the time it would otherwise take to sift through your bank account for this information. You can then approve or deny the suggested matches. The best applications suggest potential matches as you reconcile your accounts, and a few include a reconciliation tool in their mobile apps.
Every accounting program can generate financial reports. But some are more basic than others, and some require you to subscribe to a pricier plan for advanced reporting. If you need specific types of financial reports, make sure they’re included in the software application and plan you choose. Detailed reports can help you interpret your financial data to make informed business decisions.
Not all accounting and invoicing programs have mobile apps, but the best ones do. There is, however, quite a range in the capabilities of mobile apps. Some can only capture receipts for expense tracking, some allow you to create and send invoices, and others have almost every feature the web-based software does. It’s worth checking if the software you’re considering offers a mobile app and, if so, what features will help you manage your business while you’re away from the office.
The ability to connect your accounting software to other business programs you use saves you valuable time because you don’t have to manually transfer data from one system to another. Payroll, payment processing, the best point-of-sale (POS) systems and the best customer relationship management (CRM) software are just a few of the popular types of integrations that are available with accounting software. Integration with systems you already use also cuts down on training time for employees who will use the software.
If you’re a consultant or your business bills clients by the hour, you need accounting software that allows you to track and bill your time or that integrates with the time-tracking program you already use. This is an important feature in the best accounting software for freelancers.
If you have a retail, e-commerce or distribution business, you need an application that helps with inventory tracking and purchase orders. You may need to subscribe to a top-tier plan to get this feature, unless you use ZarMoney. If you need more advanced inventory features, look for software that integrates with a dedicated inventory management system.
Firms, freelancers and consultants who work with clients on projects or jobs should look for accounting software that helps them track their projects’ tasks and budgets. The software should allow you to invoice customers for tracked time and bill them for project expenses.
Several programs we evaluated let you add more than one business to your account, though some companies charge extra for this convenience. Also, the types of accounting methods that are important to you will depend on the specific needs of your business. For example, if you run a small freelance business, project-based billing might be the most important feature. Or, if you plan to do some work on your mobile device, a full-featured mobile app might be at the top of your list.
Managing your finances is vital to the success of your business, and choosing the right accounting software can make that much easier. You’ll reap a lot of benefits when you swap out pen and paper or an Excel spreadsheet for accounting software. Here’s a look at a few of them.
Human error is by far the biggest cause of accounting and bookkeeping problems. Many accounting professionals cite common mistakes such as spreadsheet errors and incorrect manual entries. Accounting software can help cut down on these costly blunders by eliminating clunky spreadsheet inputs and pulling data directly from third-party business apps.
Small businesses can’t afford not to have their finances in order. Whether it’s time to pay the tax bill or forecast for the next year, it can be difficult to get the information you need if you are not organized. Accounting software helps you stay on top of your financial data. It organizes financial information, stores it in one location and automates many time-consuming accounting processes, which frees you up to focus on running your business.
Internal controls refer to the rules and procedures established by a company to ensure the integrity of accounting and bookkeeping processes. Accounting software increases the reliability of your measures to help prevent and detect fraud. It often includes additional features for setting up user roles and permissions alongside payment approval workflows. This can significantly reduce the risk of loss and theft from your business.
Thanks to cloud-based offerings, the price of accounting software has come down a lot over the years. Today, small business owners have a lot of choices. Accounting software costs range from free to $350 per month. The size of your business and your accounting needs will dictate how much you pay. But if that monthly cost means you’ll optimize cash flow, meet tax obligations and identify growth opportunities, it’s probably worth it.
Calculating and paying taxes are essential business tasks, but taxes are complex and often involve a lot of tedious paperwork. Accounting software can help you manage this task. Many accounting software programs calculate sales tax, prepare tax forms, and even file quarterly and annual business taxes for you, which can save you time and hassle.
Reporting features can also keep you compliant with tax authorities, which increasingly require real-time reporting. Artificial intelligence (AI) technology increasingly enables businesses to upload their profits and losses in real time. This is especially important in an era when businesses deal with tax requirements not only in their own countries but around the world. Fines and punishments for noncompliance can be incredibly burdensome for business owners.
Accounting software records transactions and tracks different accounting metrics. You can set up the software to automatically receive financial information from your bank or use an extremely basic version that might require you to input the data manually. We encourage you to use software that automatically receives financial information from your bank and credit card provider to track your business’s finances. Further, most software solutions store the information in the cloud, so your data will be safe if your computer crashes or you experience other technical issues.
Based on our research, QuickBooks Online is the best small business accounting system. But, depending on the specific needs of your business, another system may be a better fit or a better value. For example, if your business provides a service and sends a lot of invoices, FreshBooks might be the best choice for you because of its robust invoicing features. See our best picks above for our specific recommendations for different business sizes and needs.
You need accounting software that tracks the money moving in and out of your business, with both accounts payable and accounts receivable features. Some software solutions don’t include both accounts payable and accounts receivable information. Also, accounting software should connect to your bank and credit card accounts and automatically download your transactions. If your business is service-based, you may need project management tools. If your business sells products, you may want an accounting solution that has inventory management features. Finally, look for software that offers greater advantages by connecting to other business applications you already use, such as your POS system, CRM system or the best email marketing software
For small businesses, the term “online bookkeeping software” is usually interchangeable with “online accounting software.” (However, there is a difference between bookkeepers and accountants.) The best online accounting programs for small businesses have bookkeeping capabilities that allow you to record debit and credit transactions, as well as accounting features that let you run reports and analyze your business’s financial performance. Look for more than just a bookkeeping solution; accounting software should include more detail and let you generate invoices and detailed reports.
It depends on your business. If you generate (or expect to generate) a lot of invoices to send to clients, we recommend that you find a comprehensive accounting application with invoice-generating features. Freelancers should consider using accounting software that can generate invoices.
Online accounting services can perform a wide range of tasks for busy business owners. Some focus on bookkeeping duties, such as entering and categorizing transactions, reconciling accounts, and generating financial statements and reports that you can take to your certified public accountant (CPA) at tax time. Others provide payroll and tax preparation services. Some — such as virtual controllers, chief financial officers and CPAs — provide high-level accounting services, like internal audits and financial planning and analysis.
For some small business owners, an accounting platform that tracks expenses and sends invoices is all that’s needed. For others, advanced reporting, inventory management and e-commerce are more important. The camp you fall into will dictate how much you pay for accounting software. Some accounting software options are free, while paid versions can cost as much as $350 per month. The total cost will be determined by the complexity of the software you choose and how many employees need access to it.
Small business owners should look for accounting software that is easy to install, simple to use, integrates easily with third-party apps, and provides a bevy of tools, including invoicing and inventory management. The best accounting software enables easy collaboration between you and your accountant.
Changing accounting software vendors is easier said than done. After all, you already uploaded all of your data to the platform and learned how to operate it. Nonetheless, there are reasons to consider a switch:
If you are considering switching accounting software, the best time to do so is at the end of your business’s fiscal year. The end of the quarter is the second-best option.
Accounting software is used to extract data from large tax documents, create new journal entries, track payments, send invoices, and eliminate manual data entry. These tasks are both time-consuming and prone to human error. Automation can provide enormous time savings for finance departments that total thousands of hours annually, which is another reason to consider implementing accounting software.
According to data from The Brainy Insights, in 2022, the global accounting software market reached a value of $13.84 billion. This figure reflects the sector’s steady growth throughout the 21st century. By 2032, the market value is expected to reach $37.63 billion. This figure reflects a compound annual growth rate of 10.5 percent across the decade.
Here are some trends to watch:
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