Best Bookkeeping and Payroll Software for Small Business

Small business owners work long and hard to run their business efficiently and profitably. Wouldn’t it be nice if taking care of the financial details were a simple as stepping on a scale? With Xero accounting software, it’s as easy as stepping on a scale! It is the simplest bookkeeping software available for small businesses.

Available only to small businesses and managers, Business Essentials is the easiest and most affordable accounting software for a small company. Business Essentials comes packed with financial management tools such as a general ledger, accounts payable, inventory and payroll to make your job easier.

Wave


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Wave is an ideal accounting software platform for a service-based small business that sends simple invoices and doesn’t need to track inventory or run payroll. For many freelancers or service-based businesses, Wave’s free features will cover all of their accounting needs and is the best free software in our review. At year-end, accountants can pull the necessary reports from Wave to prepare a business’ tax return.Pros

  • Free accounting, invoicing, and receipt scanning
  • No transaction or billing limits
  • Run multiple businesses in one account
  • Unlimited number of users
  • Mobile app

Cons

  • Limited third-party app integrations
  • Higher fees for credit cards and ACH payments
  • Full-service payroll is limited to only 14 states
  • No inventory management

Wave was founded in 2010 and is based in Toronto. The company has over 250 employees and was purchased by H&R Block in 2019. The foundational accounting features that most small businesses need, such as income and expense tracking, financial reporting, invoicing, and scanning receipts, are all included with this free software. These features can be accessed online or on the mobile app. Customer payment processing and payroll are considered premium services that cost extra, but all of the bookkeeping, invoicing, and reporting features are completely free.

Wave makes its money on its payment gateway. To process payment from a customer, Wave charges 2.9% plus 30¢ per transaction for Visa, Mastercard, and Discover, and 3.4% plus 30¢ per transaction for American Express. These fees are slightly higher than other accounting software. Additionally, to process an ACH payment, rather than a credit card, Wave charges 1% per transaction with a $1 minimum fee. This is unique to Wave, as the majority of accounting software does not charge a fee for ACH payment processing. 

Wave offers two payroll plans as an add-on service. The first plan is $20 per month plus $6 per employee or contractor. In this plan, Wave will process payroll and prepare payroll tax calculations, but the user is responsible for manually completing payroll tax forms and submitting tax payments. The second plan is $35 per month plus $6 per employee or contractor. In this plan, payroll is full-service, which means that all tax filings and payments are completely managed by Wave. This full-service payroll option is only available in 14 states.

 Sage 50cloud

Small Business Accounting Software Sage 50CloudPricing: Starts at $340/Year

With Sage, you can spend less time on administrative tasks. The software sends invoices, tracks payments and expenses, and calculates what you owe come tax season. Time-tracking and collaboration tools are two things you won’t get with Sage, and payroll is a separate product.

Best For Small Businesses Trending Towards Higher Growth

Sage works well for small- to medium-sized businesses. It errs on the more expensive side of the tools on this list, but it has an impressive enough suite of features to back its prices up. If your small business is more mature than most — and you can afford to spend a little extra on your accounting software — take a look at Sage50cloud. 

Xero

Small Business Accounting Software Xero

Pricing: Starts at $11/month

Xero lets you get financial performance reports sent straight to you, and connect your bank account for a seamless experience. If you need payroll services, you’ll have to use them through Xero’s partnership with Gusto. And if you value live support, you should probably look for another provider.

Best for Businesses That Conduct Their Business on the Go.

One of Xero’s most impressive characteristics is its mobile experience, making it an excellent option for businesspeople who work on the go. The software allows you to send custom invoices, track inventory, and create purchase orders to attach to bills — all from your phone or tablet.

GoDaddy


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Established in Baltimore, Maryland, in 1997, GoDaddy is a big name in the web hosting and website creation space, but it also offers accounting software for small businesses.7 It has tools to automate and organize your bookkeeping and accounting solutions and requires no prior accounting knowledge. You can automatically create and send invoices, accept online payments, and view business reports.

We chose GoDaddy as our best accounting software for an e-commerce business because this is exactly what the software is designed for. It’s made for e-commerce sellers, so you can get started in a few minutes, and it syncs to Amazon, Etsy, eBay, PayPal, and more. Keep in mind that GoDaddy is great for online sellers, but may fall short if you’re a small business looking for comprehensive accounting solutions including automation, tax forms, and payroll.

GoDaddy’s features include:

  • Syncing with online retailers
  • Online payment processing
  • Track sales and expenses
  • Create and send invoices
  • Recurring invoices
  • View business reports including profit and loss

GoDaddy’s pricing is tiered as follows:

  • Get Paid: Starts at $4.99 per month and includes invoices and estimates, accepts payment from your smartphone, tracks mileage and time, and current-year business reports
  • Essentials: Starts at $9.99 per month and includes everything from the Get Paid tier plus unlimited business reports, automatic credit card imports, and sales data imports
  • Premium: Starts at $14.99 per month and includes everything from the Essentials tier plus recurring invoices

Zoho Books


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Zoho Corporation was founded in 1996 in India and now also has a corporate office in California.8

 It’s online accounting software for small businesses that lets you track your finances, create invoices, collaborate with your accountant in real-time, and more. It includes multiple products including accounting software, customer relationship management (CRM), inventory control, and human resource management software.

We chose Zoho Books as our best small business accounting software for automation because it offers robust accounting features and automation for bank feeds, categorizing, invoices, and more. It also has more than 40 app integrations so it can be used with the software you’re already using. Zoho Books requires no accounting knowledge and can be easily set up. However, it only offers payroll features to companies in India, so if you need payroll solutions, you will have to choose another accounting software.

Zoho Books’ features include:

  • Tax compliance and audit reports
  • Sales orders
  • Invoicing
  • End-to-end accounting
  • Reconcile bank transactions
  • Client portal
  • Reports and schedules
  • Automatic tax calculations
  • 1099 forms and sales tax reports that can be exported

Pricing for Zoho Books is tiered as follows:

  • Free: $0 per month per organization. One user, manages up to 1,000 invoices.
  • Basic: $15 per month per organization and includes up to three users, five automated workflows, and 50 contacts
  • Standard: $40 per month per organization and includes up to five users, 500 contacts, and 10 automated workflows/module
  • Professional: $60 per month per organization and includes up to 10 users, more than 500 contacts, and 10 automated workflows/module

Conclusion

As a small business owner, you are going to be spending most of your time doing the actual work of your particular business. But that certainly does not mean you can skip out on the bookkeeping and payroll tasks. Do not let the accounting tasks get in the way of your main job.

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