Business accounting tools are for those who want toBusiness accounting, whether for a small start-up, established small business or even an enterprise level company is complex and time consuming. This becomes more and more aggravating when you realize that most of your time is spent simply partaking in activities that can be automated. About 5 years ago I got tired of this and started building software. Over the years my passion for creating useful software is still strong and today I am bringing to life my vision for a world with simplified bookkeeping.”
What to consider when choosing an accounting tool
Each small business is different, with different needs and different employee skill levels. Remember, if you’re a service business, you likely don’t care whether an accounting product offers inventory management, while the gift shop down the street probably does.
Likewise, if you or your employee is still struggling to grasp the basics of accounting, the last thing you need is a complicated accounting application.
Here are a few things you may want to look for when deciding whether an application is right for you:
1. Features specific to your needs
Do you sell products? If so, you’ll want to look for an application with a good inventory module. Need to pay employees? Look for an application that includes payroll. By figuring out what features are most important to you and your business, you can more easily locate the application that is right for you.
2. Ease of use
If you’re just starting your business, or handling the bookkeeping and accounting yourself, the last thing you want is a complicated, cumbersome application that is painful to navigate through.
All of the applications in our list here offer a free trial, so spend a week or so giving an application a test run prior to purchasing in order to find the application you’re comfortable with.
3. Accessibility
If you’re always on the go, the last thing you want is an accounting application that ties you to the office. Instead, look for a cloud-based application that includes a good mobile app.
Make sure the mobile app contains the same features that are found on the full version. If it doesn’t, it may make sense to look elsewhere.
4. Price
While pricing isn’t the most important factor, it can be the deciding factor when it comes to purchasing accounting software. This is particularly important for startups and businesses with limited cash flow.
The most expensive software doesn’t necessarily equate to the best product for your business, so find one that fits your needs and your budget.
5. Scalability
If you’re a one-man or one-woman show, scalability isn’t really important, but if growth is in your business plan, then make sure you find an application that can grow along with your business
Here are our top picks for the best accounting tools for your small business:
1. Kashoo
Kashoo is a good fit for sole proprietors, freelancers, and very small businesses, and is one of the better options for those that want to keep track of income and expenses, but are uncomfortable connecting their bank accounts to an accounting application.
Kashoo makes it easy to enter income and expense transactions manually. Source: Kashoo software.
Kashoo offers four distinct activity areas; Actions, Lists, Reports, and Add-Ons. This makes it easy even for new users to jump in and get started using the application without the need to spend extra time learning the ropes.
The application uses a combined income/expense screen where you can record both income received and expenses paid. You also have the option to connect Kashoo to your bank account, but the income/expense feature makes it easy to record necessary transactions without connectivity.
Kashoo offers easy invoicing, with the ability to pay vendors electronically as well as by printing checks, another option that isn’t readily available in other applications. Kashoo also makes entering journal entries a snap, and the list feature lets you track client, supplier, and item details.
Kashoo reporting options are sparse, with only eight reports available, though complete financial statements can be run. Reports have limited customization, but can be exported to Excel if desired.
The benefit of using Kashoo is that it makes it easy for new business owners to enter financial transactions. Another benefit is that while you’re given the option to connect your financial institutions, Kashoo works just as well if you choose not to.
Kashoo offers a single plan at the cost of $19.95/month, or $199/year, and supports an unlimited number of users.
Read The Blueprint’s full Kashoo review
2. ZipBooks
A great fit for freelancers, small businesses, consultants, and contractors, newcomer ZipBooks includes great time-tracking capability.
A great addition to any business that needs to track hours in order to bill clients, ZipBooks is a good option for solo attorneys and accountants or any other professional who routinely bills for time.
ZipBooks built-in timer is a great addition for attorneys, accountants, and other professionals. Source: ZipBooks software.
ZipBooks users a built-in timer to track time, with the timer displayed at the top of the user dashboard for easy access. The timer can be started and stopped as needed, and you can record notes along the way for billing purposes.
ZipBooks offers good accounting functionality, with the option to link bank accounts. In addition, if you do link the application to a bank account, ZipBooks uses a built-in algorithm that assists in transaction categorization, remembering how a previous transaction was recorded, in order to record it properly.
Invoicing options are also available in ZipBooks, with the ability to customize invoicing as desired, with an option to add a payment link to any invoice.
Reports in ZipBooks are fairly basic, though the application does include intelligence reporting which includes a business health score.
One of the biggest benefits of using ZipBooks is that it offers a free plan, which allows you to start small and scale up to a paid plan when necessary.
Along with the free Starter plan, ZipBooks offers two paid plans: Smarter, which is $15/month and supports up to five users, and Sophisticated, which is $35/month and supports an unlimited number of users. An Accountant version of ZipBooks is also available for accounting professionals.
Read The Blueprint’s full ZipBooks review
3. Wave Accounting
One of the best accounting software applications for freelancers, sole proprietors, and micro-businesses, Wave Accounting is completely free accounting software. And when we say free, we mean free.
Not just a few of the features, or a starter plan, but the entire application is free. You’ll only pay extra if you want to accept payments online through Wave Payments or choose to use their payroll service.
Wave Accounting makes it easy to set up your business. Source: Wave Accounting software.
Wave offers excellent invoicing capability, as well as the option to connect your bank accounts directly to the application. Recurring invoicing is also available in Wave, which is a time-saving feature for those who bill on a regular or retainer basis.
You can manage your customers in Wave, but the application offers limited opportunity to track customer details. Although you can add both products and services to Wave, there is no real way to track inventory movement, making it a much better option for service and consulting businesses.
Wave includes 12 standard reports, with financial statements available. Reports have limited customization capability but can be exported to a CSV file for customization if necessary.
Wave’s no-cost price tag can be a huge benefit for small businesses and startups with a limited budget. The downside of the application is limited support availability, with support only offered by submitting a request. However, live email support is offered to those who purchase Wave Payments and Wave Payroll.
Wave Accounting is 100% free for the entire accounting application. If you choose to accept online payments, you’ll be charged 2.9% plus a $0.30 fee for each transaction, a very reasonable price.
Wave Payroll currently charges a base fee of $35 per month, plus a fee of $4 per employee, though full-service payroll is only offered in eight states.
Read The Blueprint’s full Wave Accounting review
4. Xero
If you’re an app person, you’ll love Xero. Designed for small businesses that want an application that is designed to be used on the go, Xero’s multi-currency capability also makes it a good fit for those who do business globally.
Xero offers connectivity to hundreds of apps.
Source: Xero software.
While Xero offers accounting features comparable to other similar products, its strong suit is its ability to integrate with more than 500 apps.
While this may not matter to the sole proprietor or freelancer, app integration can help fill the holes that are typically found in entry-level accounting software applications, making it a great fit for niche markets like IT, startups, and e-commerce businesses.
The business interface in Xero offers quick access to invoicing, bill payment, and customer quotes, while standard accounting functions are found under accounting.
Xero discourages the use of journal entries in the application, recommending that you connect your bank accounts with the application to manage income and expenses, but it does include journal entry capability.
Xero also offers good project management, with the ability to track completion dates and performance throughout the life of the project.
Reporting options are fairly basic in Xero, though financial statements are available. All reports can be exported to Excel if needed.
Of course, the biggest benefit of using Xero is accessibility to all of those apps. It’s also great for those with limited accounting knowledge.
Xero offers three plans: Early, which has limited functionality and is $9/month; Growing, which runs $30/month; and Established, which is $60/month, and offers project tracking, multi-currency, and expense management.
Conclusions
A lot of people don’t know this about me, but I LOVE numbers. If business figured out how to put actual numAll small business owners know they need to track their business’s finances. But, most small businesses do not have a formal accounting department and they rely on spreadsheets and manual entry of data into accounting software.