Payroll is just one of many financial functions that small businesses need to handle. Avoid hiring an in-house accountant, many small business owners rely on software to do the job. Small business accounting software offers powerful features in an easy-to-use package. Now, you can choose the best accounting software for your payroll needs
This resource center provides you with information about the best small business accounting software with payroll, based on your exact needs. Make sure to carefully consider every aspect of your company before deciding on a small business accounting software with payroll.
QuickBooks Online
QuickBooks Online is the best overall accounting software for small businesses of those reviewed. Not only do the majority of small business accounting professionals use QuickBooks Online, but there are also endless online training resources and forums to get support when needed. All accounting features can be conveniently accessed on one main dashboard, making bookkeeping more fluid and efficient. Pros
- Scalable
- Commonly used by accounting professionals
- Integration with third-party applications
- Cloud-based
- Mobile app
Cons
- Upgrade required for more users
- Occasional syncing problems with banks and credit cards
Intuit’s QuickBooks Online has been the most common accounting software used by small businesses and their bookkeeping and tax professionals. The software is cloud-based and can be accessed through a web browser or through a mobile app.
After the 30-day free trial, the four options for subscription plans include Simple Start at $25 per month, Essentials at $40 per month, Plus at $70 per month, and Advanced at $150 per month. Typically there is a significant discount offered for the first few months, and some accountants are able to offer wholesale pricing to small businesses, as well.
The monthly subscription for this software can be upgraded as a business grows, and there are many customization options with the mobile app that can be used to receive payments, review reports, capture an image of a receipt, and track business mileage. For businesses looking for a payroll solution, QuickBooks Payroll fully integrates with QuickBooks Online.
Each plan offers more advanced features like inventory management, time tracking, additional users, and budgeting. Most service-based small businesses will find that Simple Start meets all of their needs. For product-based small businesses, Essentials or Plus will have more options for inventory and customizations. The Advanced subscription is a new offering and provides robust financial reporting that is powered by Fathom. Fathom is an elite online financial report analysis tool used by many large companies all over the world.
All plans allow integration with third-party apps such as Stripe or PayPal. QuickBooks Online’s app store breaks down all of their apps by function and provides helpful examples of the benefits of each app.
FreshBooks
FreshBooks is another great option for UK small businesses – it offers three feature-rich plans at affordable prices and boasts a slick UI that makes doing things like creating invoices and entering payments a breeze.
Its basic plan, Lite, starts at just £11 per month – one of the cheapest plans we came across. And, with unlimited invoices, expense entries, time tracking, and estimates, it’s also one of the most generous… though you’re limited to five billable clients only.
Upgrading to Plus (£19 per month) adds unlimited proposals and allows you to automate recurring invoices and late payment reminders. It also extends your client limit to 50, though larger businesses will want to look at a Premium plan (£30 per month), which has a capacity of 500 billable clients.
You’ll also need to remember to keep an eye on any costs lurking below the surface. If you’re a sole trader, then FreshBooks is one of the cheaper options out there. However, adding additional team members costs £7 per person, per month – so we don’t recommend it for larger teams. FreshBooks’ more advanced payment features will also incur a fee of £15 per month.
Xero
We love Xero for its robust features and low starting price. For just $11 a month, Xero lets you send custom invoices, reconcile bank transactions, capture receipts for easier record-keeping, and track inventory.
But as a small-business accounting tool, Xero really stands out on the collaboration front. Unlike nearly every other accounting solution (including QuickBooks and FreshBooks), all of Xero’s accounting and inventory software plans include unlimited users. You don’t have to pay extra to delegate responsibilities like bank reconciliation or expense tracking to another team member: time-saving collaboration is built into your price.
However, Xero’s $11 a month plan limits you to entering only five bills and sending only 20 invoices a month. You can send unlimited invoices and quotes with only the Growing and Established plans, which start at $32 and $62 a month, respectively. Plus, you can only track expenses with the priciest plan—both QuickBooks and FreshBooks offer small-business expense tracking upfront.
WagePoint
When it comes to simple payroll, WagePoint can definitely help you out. WagePoint is concerned with ease of use in order to save you time, money, and energy. Why spend those valuable resources on processing payroll when you could be working on your business instead?
With WagePoint, you can make direct deposits, deal with payroll taxes automatically, receive year-end reporting, file for your 1099 and W-2 forms, and give employees their pay stubs online. It offers all the basics you’d need from payroll accounting tools.
Wave
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 are 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
The wave was founded in 2010 and is based in Toronto. The company has over 250 employees and was recently purchased by H&R Block. 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.
Gusto
Gusto, previously known as ZenPayroll, is one of those payroll accounting tools that also comes with a huge selection of additional features. Plus, it’s available on your mobile phone, too, making it incredibly convenient for small business owners on the go.
You get the standard payroll offerings like automatic tax processing and filing at the local, state, and federal levels, employee onboarding, and paystubs, and pure accounting software integrations (like for QuickBooks Online and FreshBooks!).
But in addition to those tools, Gusto will also give you the ability to easily enroll in health benefits plans, access and manage the human resources side of your business, and deal with 401(k)s and other retirement plans.
Try one month free, and if you like it, you’ll simply pay a flat $39/month rate, plus $6 per employee per month for the most basic option, Gusto Core. Gusto also has a new option for contractor-only employers, who simply pay the $6/employee rate and no base price.
Conclusion:
A home-based business may be highly profitable, but it can also be very confusing. There are many expenses involved with owning a home business large or small. Owners might need to cut through the clutter of tracking deductions to reduce their income taxes efficiently. As a result, the smart solution would be to use software that does all this for them in the most proficient manner.