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Best Accounting Software for a Small Business

Accounting software for small business is very hard to choose when we do not know if they would be helpful or suitable for our financial needs and decision making. It is a daunting experience to find the right accounting software for your business when there are so many available.  It can even be harder since you want an accounting software with the most suitable options at affordable rates with good quality.

So, here are the best accounting software for small business.

Xero – $11 to $62/month

Why you should buy this:

Xero is best if you need a complete small business accounting software solution to manage your books but prefer a more minimalistic and simplistic accounting software for small business. Xero handles income and expenses, inventory management, A/R and A/P, bank and credit card tracking, and other accounting tasks that small business owners need, but with fewer reports and other less necessary features.

Who is it for:

Xero is best suited for less complex businesses, more like your mom and pop shops, one-off restaurants, even Etsy stores, think self-employed individuals. It is great for small business owners needing fewer accounting features.

Why we picked it:

We like Xero as our third choice for the best accounting software for small business because of its simplicity and ease of use. Xero’s cloud-based accounting software does what you would expect, like record transitions, calculate tax, and track both inventory and financial data. Plus, you can easily integrate with Gusto Payroll for an additional fee.

Price Breakdown:

Early ($11 per month)

  • Ability to send quotes and up to 20 invoices online
  • Tracking for up to five bills
  • Bank reconciliation
  • Data capture with Hubdoc
  • Connection with banks
  • Inventory management
  • Accounting reports
  • Online invoice payments
  • Purchase orders
  • File storage
  • Contact management
  • Sales tax management

Growing ($32 per month)

  • All features in the Early package
  • Ability to send unlimited quotes and invoices online
  • Unlimited bill tracking
  • Bulk transaction reconciliation

Established ($62 per month)

  • All features in the Early and Growing packages
  • Multi-currency capabilities
  • Project tracking
  • Ability to take photos of receipts
  • Expense monitoring

Pros and Cons:

Pros:

  • Easy to use bookkeeping software
  • Simple inventory management to run your business smoothly
  • Run basic reports and analytics to measure the health of your small business
  • Record products and services in the business ledger
  • Calculate tax and other miscellaneous expenses
  • Manage and make manual journal entries as needed
  • Lots of payment processing options through various app integrations
  • Good software for self-employed persons
  • Easy to use mobile app

Cons:

  • Business owners get fewer features than with other small business accounting software
  • Fewer reports than FreshBooks and Intuit QuickBooks
  • Less customer service and support options
  • Inventory management is quite basic
  • Xero charges for ACH transactions

Customer Service:

Xero also boasts excellent customer feedback, as they maintain a 4.4 average score out of 5 on GetApp. We love how they’re constantly evolving and improving their platform, which is a major reason Xero nears the top of our best for small businesses accounting tools review.

Xero logo

Visit Xero

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Wave Accounting – Free, with à la carte extras

Why you should buy this:

You don’t have to buy Wave Accounting as it’s a free accounting and invoicing software platform. However, you’ll likely want to buy the à la carte extras, including Wave’s payroll processing ($35 per month) and Wave’s payments (2.9%-3.4% plus $0.30 credit card processing; 1% ACH fees).

If you operate a small service company, Wave Accounting will probably work for your business needs.

Who is it for:

Wave Accounting is best suited for small service businesses, more like home cleaning businesses, window washing, etc. It is great for small business owners needing very few features.

Why we picked it:

We like Wave Accounting because it’s free while letting you track your income and expenses and lets you do other very basic finance functions.

Obviously, being a truly free, 100% cloud-based product has its limitations. Still, for those who don’t need a large variety of advanced features, there’s no sense in paying for functions you won’t use.

Features:

  • Unlimited income and expense tracking
  • Sales tax tracking
  • Ability to add unlimited partners, collaborators, or accountants
  • Double-entry system
  • Reports for overdue invoices and bills, profit and loss, and cash flow
  • Unlimited bank account and credit card connections
  • Tax categories for income and expenses
  • Ability to run multiple businesses on a single account
  • Dashboard performance features
  • Unlimited invoices
  • Recurring billing with automated reminders
  • Credit card and ACH payments (additional processing fees)
  • Payroll services (additional monthly fee)

Pros and Cons:

Pros:

  • Free software for small businesses
  • Send unlimited free invoices
  • Great for a small service business for income and expense tracking

Cons:

  • Unlikely to scale with your business
  • Very basic features
  • Extras are more costly than other options

Customer Service:

Wave Accounting does not offer phone support, which is understandable since the software is free. Even so, the website chat feature uses a bot. No real person there either!

If you want a real answer, you have to email the company and wait for someone to research your query and then get back to you. We sent a test email and never got a response back.

TrustRadius rates Wave Accounting 7.3 out of 10, which is roughly 3.5 out of 5 stars.

 LessAccounting – $24 to $36/month

Why you should buy this:

If you don’t need fancy apps or complex software to manage your business, LessAccounting could be what you’re looking for. With LessAccounting, you log in to your account through their website and record your business transactions. It is that simple!

Who is it for:

LessAccounting is an excellent choice for freelancers and sole proprietors. LessAccounting applies the “less is more” philosophy to small business accounting. If you do not have complex business needs, then you may want to check into LessAccounting.

Important Note: LessAccounting is a “hands-on” accounting software where you must manually manage your books using their online platform.

Why we picked it:

We like LessAccounting because it is so simple to use. There are no apps to download or software to learn. You simply plug your financials into the LessAccounting website and generate the reports you need.

LessAccounting also offers a four-tier bookkeeping service option as well. They’ll keep the books for you. You pay based on your monthly expenses, and come tax time, you’re ready to pass them off to your accountant.

Price Breakdown:

Invoice Only (Free)

  • Up to three active customers
  • Basic invoices
  • Unlimited team members
  • Customer management
  • Payment integration with Stripe, PayPal, and Square

Lite ($24 per month)

  • Unlimited customer invoices, expense entries, estimates, and team members
  • Automated bank imports
  • Mileage tracking
  • Payment acceptance
  • Budget creation
  • Tax reports
  • CPA integration

Team ($36 per month)

  • All features in the Lite package
  • Unlimited proposals
  • Recurring invoices
  • Late payment reminders
  • Time tracking
  • Basic bookkeeping help
  • Bank reconciliation
  • Advanced tax reports
  • Multiple businesses

Pros and Cons:

Pros:

  • Simple accounting solution for the solopreneur or freelancer
  • Great for business owners with basic accounting needs

Cons:

  • Can’t handle complex accounting situations
  • Expensive compared to other options

Customer Service:

LessAccounting has a chat feature on its website that is powered by a bot. When we reached out for support, we were asked to enter our email so that someone from the team could get back in touch with us. That being said, TrustRadius gives LessAccounting 5 out of 5 stars. It doesn’t get better than that!LessAccounting logo

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Best invoicing software: FreshBooks

If you need a simpler way to create and keep up with what seems like a million and one invoices, Freshbooks may be the tool for you. It offers a greater level of customization than most other accounting software, and it requires little to no experience to use.

Freshbooks’s customizable features make it easy to:

  • Send out estimates, customize unlimited invoices, send payment reminders and add late fees automatically, manage project budgets, and accept deposits and payments.
  • Bill clients in multiple currencies, languages, and on a subscription or retainer basis.
  • Integrate tax apps, filing tools, and other tools you use, such as Gusto, GSuite, and even Bench.

In addition to discounted yearly plans, Freshbooks offers a range of monthly plans:

  1. Lite – $15 per month for basic features such as invoicing up to 5 clients, tracking unlimited expenses, and accepting credit card payments and bank transfers.
  2. Plus – $25 per month for automatic expense tracking, invoicing up to 50 clients, recurring billing and retainers, business health reports, and the option to invite your accountant.
  3. Premium – $50 per month for unlimited clients, project profitability tracking, bill payment and tracking, etc.

Freshbooks also offers a Select plan with specialized features, including a dedicated account manager, but you’ll have to request a demo if you’re interested. In any case, one of its other three paid plans should be a fit for your business needs.

AccountEdge Pro

Small Business Accounting Software AccountEdge Pro

Pricing: Starts at a One-Time fee of $149

AccountEdge Pro provides double-entry accounting tools — from time billing and reporting to inventory — that are customizable and optimized for desktop users. The program is also available for a one-time fee, potentially saving you a lot of money down the line by avoiding subscription costs.

Best for Businesses That Don’t Necessarily Need a Mobile Option

If a lack of a mobile option isn’t a deal-breaker for you, AccountEdge could be just what you need. As I mentioned, the software is designed specifically for desktop users — and that experience is extremely solid — but you can’t take AccountEdge with you on the go. That said, there’s a cloud-collaboration option available for purchase that gives you mobile flexibility.

OneUp

Small Business Accounting Software OneUp

Pricing: Starts at $9/month

OneUp is another double-entry accounting solution. It syncs with your bank, categorizes bank entries, and validates suggested entries so your books are done quickly and accurately. All told, those elements amount to roughly 95% automation of your accounting.

Best for Businesses Focused on Inventory Management

OneUp might be best known for its inventory management capabilities. The program automatically adjusts your inventory levels as they shift and tells you when to reorder.

That’s not to say that the software’s other features aren’t impressive — but if you’re primarily in the market for an exceptional inventory management solution, check OneUp out.

Conclusion

Whether you’re a freelancer, a small business owner or a medium-sized company looking for some accounting software to keep track of your money, the selection of accounting software on the market is huge, and quite intimidating. In fact, so much information is available that it can be difficult to know where to begin. That’s why we’ve done the hard work for you – by going through the lists of features and advantages/disadvantages of each program – and chosen our 10 favorites.

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