Bookkeeping Software for startups has been an essential tool in the growth of many businesses. Sometimes, there are amazing online tools that help startups manage their finances and stay in charge. If your business is looking for such a tool, here is a list of best bookkeeping software for startups!
You’ve finally made the jump and left your 9 to 5 to become an entrepreneur with big dreams. It’s hard. But there are products out there to help you achieve your goals! One of these products is called Freshbooks. This is a bookkeeping software that will keep you organized and on top of all of your business finances. It can streamline your business in ways you’d only dream of before. For example, it can connect to 30,000+ accounting professionals in 20 countries, allowing you to pay team members or contractors immediately with bank transfers or PayPal. No more waiting weeks for checks to clear! You can intuitively manage invoices, estimates, expenses, time tracking, clients, projects and more
Best accounting software for Startups
1. FreshBooks
Websitewww.freshbooks.comPrice from$4.50/moFree Trial30 days
Best overall accounting software for startups.
Best for:
FreshBooks is cloud-based accounting software that provides a feature-rich platform including modules for project management, tracking time, and tracking profit and loss. Startups in any industry will find the features in FreshBooks helpful, indeed it ranks highly in our list of overall best accounting software.
Key functionality:
FreshBooks offers general ledger-based double-entry accounting functionality in a simple, straightforward way. Its clean, intuitive dashboard provides startups with a central location to see income and expense quickly and easily.
Capturing expenses is exceptionally easy using the FreshBooks mobile apps. Instead of manually entering receipt data, the transaction download feature pulls in expense data. Then, users can snap images of their receipts using mobile devices with a camera and attach the documentation to their specific expense transactions.
Expenses can be stored and used later in the FreshBooks report generator. FreshBooks offers a variety of reports ranging from the basics—profit and loss, balance sheet, and similar—to more detailed reports, including payroll, deduction information, sales tax summaries, and project profit and loss.
Time is money for any business, and one of FreshBooks’ most impressive features is the easy-to-use Time Tracker. Startups working project-based jobs can easily start the time tracker using either the web portal or the FreshBooks mobile app. Managers can apply tracked time to users or projects to monitor project costs without missing a single billable minute.
Data collected using the time tracker can be imported into the FreshBooks invoicing module by the application administrator. The invoice module allows administrators to create invoices with their company branding and send them electronically, via email (in PDF), and by mail (printed). Invoices sent electronically include the “Pay Now” link allowing customers to pay online using a credit or debit card, PayPal, or ACH. And, FreshBooks offers multi-currency support for businesses with customers outside the US.
Payroll isn’t native to FreshBooks, but its direct integration with Gusto (or PaymentEvolution) makes running weekly, biweekly, or monthly payroll a breeze. And, all of the tax liabilities and other reporting elements are tracked automatically within FreshBooks.
Access & users:
FreshBooks is a cloud-based application accessible on any web-enabled device. Business owners on the go will appreciate the iOS and Android mobile apps that allow invoices, quotes, or expenses to be updated quickly and facilitate mobile time tracking and automatic mileage tracking. While the apps don’t support all of FreshBooks’ features, users can see when invoices have been paid and when clients post comments or questions in the client portal. The three most popular subscription plans include a single user, but team members can be added for a modest monthly fee; however, user-level permissions cannot be set, and there’s not a true audit trail to track user activity.
Ease of use:
FreshBooks’ web interface is intuitive and easy to use, which is what should be expected from a company that touts itself as “Ridiculously Easy to Use.” The menu-driven dashboard makes adding data very simple in either the web-based or mobile app version. Users can be up and running quickly, and no accounting experience is required to get started. Plus, customers can count on FreshBooks to provide excellent customer support if it’s required.
Cost:
FreshBooks employs a tiered subscription pricing model, and each tier expands the functionality to which the user has access. The “Lite” subscription, while very cost effective, limits users to no more than five billable clients and does not provide double-entry accounting functionality. The “Plus” subscription is available for a very low monthly fee, and it allows up to 50 billable clients and adds double-entry accounting capability, along with access for an accountant. The “Premium” subscription increases the client limit to 500 and adds tons of additional features, including recurring transactions and customizable email templates, and the price is still cost effective for any startup.
Startups needing more functionality or flexibility to invoice more than 500 clients will need to reach out to FreshBooks for information about the “Select” subscription. Plus, customers who pay for the annual plan instead of a monthly subscription can save even more on costs, and sales are frequently offered. Startups needing to offer payroll will incur an additional cost for the Gusto integration, but the pricing is still quite affordable.
Things we liked:
- Cost effective
- Very easy to use
- Exceptional customer support
- Excellent mobile apps
- Multi-currency support
Things we didn’t like:
- Limited to a single user
- No audit trail functionality
- Limited functionality for larger startups
2. QuickBooks Online
Websitewww.quickbooks.intuit.comPrice from$8.00/moFree Trial30 Days
Best accounting software for quickly-growing startups.
Best for:
QuickBooks Online is a perennial favorite accounting software regardless of the industry. Because QuickBooks offers a variety of versions with increasing features, it is an ideal package for startups of any size, but especially those that expect to grow quickly and need a long-term, sustainable solution.
Key functionality:
QuickBooks Online is a comprehensive double-entry accounting platform. Designed with bookkeepers in mind, it’s a simple accounting software that packs a huge punch of functionality, including full-fledged accounts payable (with receipt capture in the mobile apps) and bank feeds with AI-powered categorization and automated reconciliations.
Companies can ensure a constant revenue stream through the easy-to-use invoice function, which allows an invoice to be emailed directly from QuickBooks Online. Better still, application administrators can configure recurring invoices and even progress invoicing (based on estimates), allowing companies to “set it and forget it.”
Getting paychecks into the hands and accounts of employees is a critical part of any company. There are varied payroll options available in QuickBooks Online, including Intuit’s native QuickBooks Payroll option. QuickBooks Online calculates employee paychecks, deductions, benefit costs, 1099s for contractors, and payroll taxes. Payment by direct deposit or paper check is available, and managers can review and submit payroll through the online version of QuickBooks or using the mobile iOS or Android app. Users who prefer an outside payroll vendor will appreciate the number of available integrations, including Gusto, Patriot, Wagepoint, Paychex, and SurePayroll. And, QuickBooks Online still tracks all the information from these third party vendors—automatically.
QuickBooks Online comes equipped with robust reporting capabilities even at its least expensive subscription. Basic reports include profit and loss and balance sheet options with period comparisons (e.g., year over year, current and prior quarter, and so forth), and all reports can be customized within QuickBooks and exported to Excel for further analysis.
Bigger startups will love how QuickBooks Online allows users to create projects and manage project income and expenses. Reports then show profitability at the individual project level, so it’s easy to see what’s making money and what’s not and make decisions accordingly.
Access & users:
Accessing QuickBooks Online is simple: a user needs only an Internet-connected device with a web browser. Plus, QuickBooks Online provides iOS and Android apps for users on the go, and while the app functionality isn’t as robust as the web-based version, most key tasks can be accomplished from anywhere. The subscription version determines the number of users who can access QuickBooks Online’s tools and functions; the lowest-priced tier allows only a single user, and the most expensive allows 25. User-based permissions are available, as well.
Ease of use:
Ease of use is an essential factor for any startup, regardless of the industry. Entrepreneurs wishing to avoid a learning curve will appreciate the intuitive navigation and easy-to-use menu-driven interface. A plethora of technical support options are available as well. In addition to easy-to-use documentation, Intuit provides chat, email, and telephone support. QuickBooks Online also boasts a significant community forum offering peer-to-peer assistance with any QuickBooks Online issues. And, QuickBooks Online employees monitor the forums and correct misconceptions quickly.
Cost:
QuickBooks Online offers tier-based pricing options increasingly common with accounting packages. This structure does allow a startup to grow with QuickBooks instead of migrating to another application as revenues increase. The four tiers are “Simple Start,” “Essentials,” “Plus,” and “Advanced,” and while the monthly costs may seem high at first glance, QuickBooks offers significant discounts fairly regularly, and the time saved as a result of good bookkeeping practices should help offset the monthly fee.
Things we liked:
- Excellent automation features
- Strong payroll options—native and integrated
- Comprehensive reports features
- User-based permissions
- Intuitive interface
Things we didn’t like:
- Not the most cost-effective option
- May be too robust for brand new startups
- Payroll incurs extra costs
3. Wave
Websitewww.waveapps.comPrice fromFREE/mo
Best accounting software for startups on a budget.
Best for:
Reducing expenses is critical to business profitability—and nothing reduces costs like free. This no-cost solution is perfect for small startups watching every cent to reduce costs and increase the profit margin.
Key functionality:
It would seem logical that free software might not contain an extensive feature set. However, this is not the case with Wave. Users will love this double-entry platform that can easily handle invoicing, log vendors, and track payments, and even allow Wave to be used as their merchant account.
Small startups will find an impressive number of invoice templates, as well as the ability to scan receipts and invoices for easy tracking. This feature significantly reduces input errors. Wave users can also configure automatic reminders to send payments or invoice customers.
Remarkably, even though Wave is a free application, users can create and use an unlimited number of bank and credit card connections. Transactions download directly into Wave, and then rules help streamline the categorization process. Plus, monthly reconciliations are a breeze.
Additionally, Wave offers limitless expense and income tracking. Small startups using other services such as PayPal can seamlessly integrate the backend connection into Wave. Wave also enables integrations with a variety of other platforms via Zapier and Workato, including CRM and time tracking solutions.
While the payroll module does incur a cost, it facilitates direct deposit and provides employees immediate access to their pay stubs and Form W-2. Plus, Wave can automate tax payments to a number of states, and the company is working to increase that functionality (likely due to Wave’s 2019 acquisition by H&R Block, which can only strengthen its built-in tax offerings).
Compared to other products on this list, Wave’s reporting feature is a bit limited; however, the available reports still provide plenty of information for most smaller startups (e.g., cash flow statement, balance sheet, sales tax report). And, the reports are available in both cash and accrual formats.
Access & users:
Wave is cloud-based and, thus, is accessible anywhere a user has a web browser and an Internet connection. In addition, Wave offers multiple users per account, and user-level permissions can be set (view-only, editor, payroll manager, and admin). Wave also allows for multiple entities to be managed under a single user login, which is uncommon and could be helpful for entrepreneurs running several businesses concurrently. And, iOS and Android apps are available to manage invoicing and expense capture, but they’re not as full-featured as the browser-based option.
Ease of use:
Business owners initially attracted to Wave because of the price will also be pleased by easy application navigation and a detailed dashboard. Users with no accounting experience at all will have no issues using Wave. Its comprehensive dashboard provides a snapshot view of key business metrics and facilitates the main accounting functions—adding customers and vendors, sending invoices, and viewing reports—from that central location. However, customer support could be improved. While the Help Center is available, getting real-time help can be a challenge.
Cost:
Wave is absolutely and entirely free. Startups can create an account and begin using Wave right away. Payroll will incur an extra cost, but given the money saved on the accounting platform, that shouldn’t be a deterrent.
Things we liked:
- It’s free—need we say more?
- Multi-entity support
- Limitless bank and credit card connections
- Excellent payables and receivables features
- Native payroll with good tax reporting functionality
Things we didn’t like:
- Feature set can be outgrown
- Mobile apps aren’t the best
- Customer support needs to be improved
4. Xero
Websitewww.xero.comPrice from$9.00/moFree Trial30 days
Best accounting software for startups that need a variety of integrations.
Best for:
Xero is a web-based accounting software ideal for small startups in any industry. An easy-to-use application, Xero can manage any startup’s banking, billing, and cash flow analysis, and its unmatched variety of integrations makes Xero a flexible and comprehensive solution.
Key functionality:
Xero’s ease of use is likely to be the critical feature appealing to entrepreneurs, especially those working on getting a fledgling business off the ground. Users do not need to have an accounting background because Xero does not use standard accounting language. For instance, Xero does not use Accounts Payable and Accounts Receivable but instead uses the terms “Invoices Owed To You” and “Bills You Need To Pay. ” Xero also provides an easy-to-read chart as part of the accounting module to allow entrepreneurs a visual representation of their status.
Users can manage and configure multiple bank accounts, allowing specific vendor or customer payments to be deposited in separate accounts as needed. The download feature, as with many web-based accounting software, makes end-of-month reconciliations easy and fast since it suggests categories and learns as users verify their accuracy.
One of the more advanced dashboards in Xero is the Sales module, which facilitates accounts receivable. Users can generate invoices, and with a drop-down option, determine if the invoice should be printed, converted to a .pdf, or emailed. Recurring invoices can be set up, and there’s also an option to provide reminders to send invoices in the future. The Sales Overview dashboard also presents the user with a detailed snapshot of how the business is doing. A graph indicating all sales, the status of all open invoices, estimated money coming in, and even which customers currently owe the company the most money is provided—consolidating lots of important information into a single location. Multi-currency support is built in.
Similarly, Xero’s accounts payable functionality allows bill payments to be scheduled. There’s even a handy feature that allows the user to email bills to an inbox for later retrieval and processing.
Xero also provides lots of reports—more than any startup would require, at least at first. Some of the reports are even consolidated into a handy Management Report that can be run at any time or set to publish automatically at the end of a reporting period. Reports can even be customized using a drag-and-drop feature.
Thanks to its 800+ integrations, time tracking, payroll, and many other features can be set up quickly and easily. And, while many of these add-ons will incur extra costs, the customization and scalability that the vast assortment of integrations affords makes Xero a great choice for startups that don’t yet know exactly what functionality they require.
Access & users:
Xero users can access the cloud-based application on any device with a web browser and Internet access. Additionally, Xero offers an iOS and Android app for mobile devices making access to Xero virtually ubiquitous. Permissions can be configured to ensure users only access dashboards or information required to perform their jobs, and as many users as necessary can be added at no additional cost to the subscriber.
Ease of use:
Xero is generally considered exceptionally easy to use between the easy-to-navigate menus and the use of plain language instead of accounting terms. Xero also provides excellent customer support. Users with a simple question will likely find a solution in the detailed FAQ. However, if a question or concern is not entirely addressed in the article, users can select the “Get in Touch” option located on each FAQ article. Plus, there is a comprehensive support area called Xero Central where answers to many questions can be found. Currently, there is no way to speak to a support representative.
Cost:
Potential Xero customers can use Xero free of charge for 30-days while deciding which tier is best for them. Currently, Xero offers three tiers: “Early,” “Growing,” and “Established.” The tiered approach allows users to start with the lowest-cost option and then upgrade as they grow and need additional functionality. Pricing is comparable with other similar products, such as QuickBooks Online, but new users should keep in mind that integrations may drive up the monthly fees fairly quickly.
Things we liked:
- Exceptionally easy to use
- Excellent mobile apps
- Detailed cash flow monitoring
- Tiered pricing for new and growing startups
- More available integrations than any competitor
6. Wave
Wave offers a price tag that’s hard to beat for cash-conscious startups: free. And between the no-hassle bookkeeping tools, double-entry accounting, and journal entries, it stands out as one of the best accounting software options.
Simply sign up, connect your business bank accounts, and watch transaction data flow in real time. Wave’s feature set is suitable for most entry-level accounting needs, with invoicing and reminders, foreign currency payments, custom sales tax, financial reports, and more. Unlike many of its paid counterparts, Wave is also available as both an Android app and iOS app, for an on-the-go view of your finances.
Startups looking for all-in-one financial management on a tight budget can add Wave’s other invoicing, payments, and payroll apps, as well. If you need free accounting software with basic functionality, it’s hard to go wrong with Wave.
Pricing: Wave is free and includes unlimited users.
7. Xero
Xero helps early- and late-stage startups say goodbye to risky manual data entry and time-consuming administrative work. It’s one of the less expensive cloud software options, but it doesn’t sacrifice much in the way of features.
You can reconcile transactions, send online invoices, and record bills and receipts from your computer or mobile device, including iOS, Android, Mac, and PC devices. There are three subscription plans, including the lowest tier that limits the number of invoices, quotes, and bills you can process.
Upper-tier plans remove these restrictions and add on features like expenses and projects. You also get multiple currency access, making the most expensive plan a worthwhile option for ecommerce and global businesses.
No matter which plan you choose, Xero offers integrations with over 600 applications, including online marketplaces, human resources software, project management software, and bookkeeping software. Sync your finances with tools like Gusto, PayPal, Amazon, Asana, Etsy, and Shopify.
Pricing: Xero starts at $9 per month.
8. ZipBooks
ZipBooks is the final entry on this list of the best accounting software options. With an attractive interface, automated bank account reconciliation, and a library of helpful financial statements and templates, it’s simple to set up and get going. You don’t need to be an accounting professional to get the most out of ZipBooks. However, it has the scalability for growing businesses that will eventually need a full-time accountant.
Take care of your day-to-day accounting, billing, and expense management needs, and go further with ZipBook’s Intelligence features. You’re provided with data-driven financial health scores and recommendations to guide you toward optimal performance. We should note that ZipBooks only supports an iOS mobile app at the time of writing.
If your startup needs to make the most of every penny, ZipBooks offers a free version with recurring invoices, payment reminders, time tracking, and more.
Pricing: ZipBooks’ paid plans begin at $15 per month for five users.
Many startup founders wonder how to handle their finances while staying on top of their daily operations, investor expectations, and long-term goals. This is especially true if they’ve never been responsible for company financial information before, and aren’t yet able to hire an accountant. Accounting software is the answer, but finding the right one among hundreds of software options isn’t so simple.
Conclusion
You just started your business, and you already have a lot of problems on your hands. Not only do you have to worry about making money, but you also have to think about making sure your bookkeeping is done correctly. That’s where accounting software for startups can be helpful.