Running a business can be very intensive, particularly if you’re working for yourself. Keeping accurate accounting records is the only way to keep track of money you’re spending, income you’re bringing in, and profits that should help you grow your asset base. Small businesses need small business accounting software to get their finances organized and running smoothly. I’ve tested a number of low-cost small business accounting packages and decided on this one because it was simple and easy to use.
If you’re out there running a small business and still doing all of your accounting manually, you should look no further than SimpleBooks. This small business accounting app is the only one designed for your specific needs: It’s 100% mobile and across multiple operating systems (Windows, Mac and iPad).
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 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 2019.34 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.
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 the 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.
OneUp: Best for sales teams
- Starting at $9.00/mo.
Low starting price
Plan-limited users
Unlimited invoicing
Data as of 11/5/21. Offers and availability may vary by location and are subject to change.
All of OneUp’s plans include customer relationship management (CRM) features, which makes it perfectly suited to sales teams that frequently follow up with customers. Plus, it’s affordable: pricing for one user starts at $9 per month. If you’re a Mac user, though, you’re out of luck: OneUp works only for Windows users. And while every OneUp plan includes all of OneUp’s features, its plans limit your user numbers. Only the priciest plan, which starts at $169 a month, includes unlimited users.
OnPay
Pricing: Starts at $36/month plus an additional $4/user
OnPay can help you automate tax filings, enter payment data, and manage benefits including compensation insurance, health insurance, and 401(k). It also offers unlimited payroll runs for W-2 and 1099 workers.
And, OnPay can estimate your payroll taxes, manage tax form filings, and even pay your taxes. A bonus here? They’ll also take responsibility for any tax filing errors committed while using the product.
Best for Businesses Looking for a Payroll-Centric Solution
OnPay’s area of expertise is reflected in its name. If you’re a small- to medium-sized business that needs help streamlining payroll and entering payment data, you might consider investing in OnPay. That’s not to say the rest of its features aren’t impressive — it’s just to say that the solution fits businesses interested in a payroll-centric solution particularly well.
Conclusion
A lot of small business owners do their accounting work in spreadsheets, which often leads to mistakes. Or, the small business owner might learn on-the-job how to do things. Thing is, employees who are just learning new skills need to be supervised, and it’s important that they write down or scan their work so that others can understand it. Small business accounting software lets the person who’s starting out learn with a fast editor and read back what they’ve done.