Accounting Software For Small Business Reviews. As a business owner you’re probably fed up with logging in and out of different accounts just for you to check how your small business is doing. The biggest problem that small business owners face is that they can’t effectively track their finances and grow their businesses by using one software system. That’s why many entrepreneurs prefer complex accounting software packages and spend extra cash on them monthly.
As a small business owner, you must keep track of your expenses and income in order to make smart decisions. You might find it overwhelming to make the right choice when choosing accounting software for your business. You might have different requirements from your accounting software depending on the type of business you run. The more details you have about particular accounting software, the better equipped you will be to choose what best meets your needs.
What is small business accounting software?
Small business accounting software is software used by small businesses to track incoming and outgoing financial transactions as well as financial statements and cash flow. While traditionally small businesses have tracked financial information on tools such as spreadsheets, these manual methods are time-consuming and less accurate. Spreadsheets also do not offer the automation and notification capabilities of a dedicated tool.
What 4 key Small Business Accounting Software features should I look for?
Accounts payable / accounts receivable (AP/AR)
The fundamental bookkeeping application, which tracks what is owed to a company by its customers (accounts receivable) as well as what the company owes its suppliers, also known as its liabilities (accounts payable).
Financial reporting
Reporting applications allow businesses to export data from their accounting system in a structured manner that communicates financial history as well as financial projections. Some may include compliance-related functionality for government or industry audits (e.g., in banking and financial services).
Budgeting & forecasting
Budgeting applications allow small businesses to model potential financial outcomes and to compare actual profit and loss to planned budgets, which helps with decision-making about workforce, spending and growth. Some systems have dashboards that display information visually.
Fixed asset accounting
Fixed asset applications focus on tracking assets that aren’t easily converted to cash: For a small business, assets will typically be “tangible,” such as land, buildings or equipment. These applications calculate the value of such assets over time, allowing for depreciation due to wear and tear
FreshBooks: Best invoicing
4.1
- Starting at $15.00/mo.
Middle-of-the-road starting price
$10.00/mo./additional user
Expense and time tracking with each plan
Data as of 5/19/21. Offers and availability may vary by location and are subject to change.
FreshBooks’s combination of stellar features, customizable invoices, and well-reviewed mobile apps make it pretty much perfect—especially for freelancers. Unlike Xero, FreshBooks lets you send an unlimited number of invoices and estimates with every plan. Each plan also includes time tracking for easier, more accurate client billing. FreshBooks’s built-in small-business expense tracking helps you maintain a balanced budget. And, like QuickBooks Online, FreshBooks includes built-in mileage tracking—a must for freelancers who plan to claim mileage expenses on their year-end tax forms.
Price check: FreshBooks’ discounts
FreshBooks starts at $15 a month, but the company’s frequent discounts make its financial software even more affordable. As of May 2021, FreshBooks is offering new customers 60% off for six months—which knocks your starting price to $4.50 a month. Plus, paying annually takes 10% off your monthly price. (If you sign up for a new annual subscription during this current promo, you’ll lock in 70% off for the first six months.)
But while FreshBooks doesn’t limit your invoices, it does limit the number of customers you can bill each month. You can send your customers an unlimited amount of invoices, but the cheapest plan limits that client number to just five. Additionally, FreshBooks doesn’t include bank reconciliation with its cheapest plan. Since bank reconciliation is a foundational accounting task, we can only recommend FreshBooks’s cheapest plan to freelancers or brand-new startups with just a few transactions a month.
QuickBooks Online: Most user-friendly software
Most user-friendlyQuickBooks Online
3.9
- Starting at $25.00/mo.
Above-average starting price
Users limited by plan
Expense and sales tax tracking with each plan
Data as of 5/19/21. Offers and availability may vary by location and are subject to change.
QuickBooks is easily one of the most popular financial, tax, and accounting software options in the world. And while QuickBooks Desktop is still an option for those who prefer desktops to laptops, QuickBooks Online is Intuit’s cloud-accounting software solution. QuickBooks’s basic plan includes typical features like invoicing, billing, and receipt scanning along with more comprehensive tracking than many competitors:
- Mileage tracking
- Sales tax tracking
- Automatic tax deduction categorization
- 1099 contractor payment tracking
QuickBooks also has the absolute best mobile accounting app you can find. The app can do basically everything the software can (a rarity for any software provider, no matter the industry). If you work on the go, QuickBooks’s app, which includes mobile mileage tracking, might make it a good fit.
QuickBooks’s stellar reporting and tracking features come at a price, though: its cheapest small-business plan starts at $25 a month and restricts you to one user plus an accountant. The priciest plan, which includes 25 users, starts at $150 a month. At $15 a month, QuickBooks Self-Employed is a cheaper option, but it’s primarily an invoicing, mileage-tracking, and tax-tracking plan—not a fully featured bookkeeping or accounting app.See QuickBooks’ Accounting PlansRead our QuickBooks Online Review
Wave: Most affordable
Most affordableWave Accounting
3.9
- Free
Free-for-life accounting software
Unlimited users
Income and expense tracking
Data as of 5/19/21. Offers and availability may vary by location and are subject to change.
For exactly $0, Wave presents you with a slick, user-friendly dashboard and a slew of features that rival those of its paid competitors. For instance, Wave Accounting includes multi-currency support, expense tracking, unlimited invoicing, and double-entry accounting—a more accurate method of accounting that FreshBooks’ basic business accounting plan notably lacks.
Wave also lets you juggle multiple businesses with the same account. If you’re an Amazon or eBay seller who also manages a small team of contractors, you can track both sets of finances without paying anything.
Even though Wave has a useful payroll tool, its accounting software isn’t necessarily right for businesses with dozens of employees. Since Wave offers just one accounting plan, businesses can’t scale up to plans with more features as they grow. And Wave’s lack of inventory tracking makes it better matched to service-based solopreneurs and freelancers who don’t need both accounting and inventory software.See Wave’s Accounting PlansRead our Wave Review
Zoho Books: Best automation
3.6
- Starting at $15.00/mo.*
Middle-of-the-road starting price
Additional users for $2.50/user/mo.
Automatic recurring invoicing
Data as of 5/19/21. Offers and availability may vary by location and are subject to change.
*When billed annually.
Zoho Books easily automates the most common (and, let’s face it, boring) bookkeeping tasks—which means you can dedicate more time to your business and customers and less time to the tedious task of data entry. Most notably, it lets you set automatic customer payment reminders, create recurring expense profiles, and manage 1099 contractors.
Plus, Zoho Books is just one piece of software in the larger suite of Zoho products. Each Zoho product integrates easily with the rest, which means you can use Zoho for accounting, project management, and customer relationship management (CRM) for a start. Zoho Books costs $15 a month if you pay annually or $20 if you pay month to month. The cheapest plan includes three users, but you can also pay an extra $2.50 per month for each additional user. That’s a standout bargain, especially compared to FreshBooks’ extra $10 per user per month.
Unfortunately, even though it’s a solid accounting tool, Zoho Books has one huge flaw: Zoho doesn’t offer a payroll plan unless you live in California, Texas, or India. And it doesn’t integrate with third-party payroll providers either. Instead, you have to manually update the payroll-related aspects of your books—which detracts from Zoho’s primary perk of automation in a big way.
Similarly, Zoho Books’s cheapest plan doesn’t include automatic journal entry creation. Instead, whenever you debit or credit an account, you’ll have to manually create an entry. If you log more than a few transactions a month, the lack of automation adds major time and hassle—you’ll want the $40 a month (or $50, billed monthly) Professional plan instead.See Zoho’s Accounting PlansRead our Zoho Books Review
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Conclusion
Small business owners are busier than ever. That means you need to be smart about how you handle your accounting software, which is the mainstay of many small businesses. If you’re looking for accounting software to help make your life simpler, rest assured that you do not have to deal with the same hassles as accountants of yesteryears. Today’s best accounting software for small business is affordable and provides a number of cloud-based features to make life easier for busy people.