For many small businesses, accounting can be a challenge. If you are looking for a business solution that is affordable, easy to use, and offers all of the key features that are important to growing your business, then you should consider some of the options available in this comparison. For most small businesses, an accounting software package is not an optional purchase—it is a mandatory one.
Lots of small businesses today use accounting software to manage their finances and reporting. These software products offer a lot of power, convenience and even fun when they are used right. A good accounting program should allow you to put your finger on the pulse of your business in real time, and enable you to plan and prepare for the future in a way you couldn’t before. Are you looking for the best small business accounting software for your needs?
FreshBooks
The most crucial accounting need for most service-based businesses is invoicing. FreshBooks offers more customizations for invoicing compared to other accounting software. Its primary function is to send, receive, print, and pay invoices, but it can also take care of a business’ basic bookkeeping needs as well. This accounting software makes it easier for service-based businesses to send proposals and invoices, request deposits, collect client retainers, track time on projects, and receive payments.Pros
- Cloud-based
- User-friendly interface
- Third-party app integration
- Affordable
- Advanced invoicing features
Cons
- No inventory management
- No payroll service
- Mobile app has limitations
Founded in 2003 in Toronto, FreshBooks started as just an invoicing software. Over time, more features have been added and FreshBooks now has over 500 employees.2 There are four different plans, and businesses can get a 10% discount if they choose to pay yearly, rather than monthly. Additionally, FreshBooks offers a 60% off discount per month for six months. The four plans are: Lite at $6 per month, Plus at $10 per month, Premium at $20 per month, and Select, which is a custom service with custom pricing.
The main difference between the four plans is the number of different clients that are allowed to be billed per month. In the Lite plan, up to five clients can be billed per month. In the Plus plan, up to 50 clients can be billed per month. In the Premium plan, unlimited clients can be billed per month. The Select plan also does not have a limitation on the number of clients that can be billed per month, but adds unique features. It costs an additional $10 per month for multiple team members to use the accounting software and it costs an additional $20 per month for the advanced payment feature, which allows users to charge a credit card in real-time or set up a recurring credit card charge for a client.
There are many third-party app integrations available, such as Shopify, Gusto, Stripe, G Suite, and more. A unique feature of FreshBooks is that invoices can be highly stylized and customized for a professional look and feel. FreshBooks is a great tool for budgeting out projects, sending estimates or proposals, and collecting customer payments.
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.
Best Accounting Software For UK Small Businesses: Sage Business Cloud Accounting
Sage Business Cloud Accounting | Start TrialRead our Review |
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Sage is known for traditional accounting, but Sage Business Cloud Accounting software comes with the same strong accounting without the learning curve. Sage Business Cloud Accounting is affordable, easy to use, and offers unlimited users, making it a great choice for small businesses. The software is also suited for UK-based businesses needing VAT support.
Sage Business Cloud Accounting is best for small businesses with many users or that operate in the UK.
Pros
- Affordable
- Easy to use
- Unlimited users
- Numerous integrations
- Suited for UK users
Cons
- Limited features
- No payroll
Sage Business Cloud Pricing
Sage Business Cloud Accounting offers two pricing plans ranging from $10-$25/month. The main difference between the two plans is that the latter gives you access to more features, such as cash flow analysis and accounts payable, and lets you have unlimited users.
Sage Business Cloud Features
Sage Business Cloud Accounting is incredibly easy to use, partially because the software sticks to the basics in terms of features. This makes Sage Business Cloud Accounting easy for any business owner to learn, no matter how much or little experience you have with accounting.
Sage offers basic accounting features, such as expense tracking, accounts payable, a chart of accounts, and reports (e.g., Profit & Loss and Balance sheets). The software also offers:
- Invoicing
- Estimates
- Cash flow management
- Inventory
- Reporting
One of the downsides of Sage Business Cloud Accounting is that you won’t find features such as time-tracking or project management, which might be a deal-breaker for some small businesses. But if you don’t need these features, Sage Business Cloud does the basics well. There are also over 60+ integrations that you can add.
Sage Business Cloud Accounting has strong built-in help options. However, getting a hold of a Sage representative is difficult, as there is no phone or email support.
When To Use Sage
Sage Business Cloud Accounting is a great solution for small businesses looking to handle basic accounting and invoicing for their company. Recent upgrades to the software have made this program more user-friendly and feature-rich. The UK version of the software is especially well-developed, but the US version could also work for small businesses looking for affordable, simple software that isn’t cluttered by too many features.
Intuit QuickBooks Online
Pricing: Starts at $12.50/month
Intuit Quickbooks might be the first resource that comes to mind when you hear the term, “small business accounting software” — and for good reason. Beyond its first-rate suite of capabilities, the program sets itself apart with elements like receipt capture and 24/7 chat support.
It also features integrations with PayPal, Shopify, and Square. Taken together, those components — among several others — make Quickbooks a crowd-pleasing small business accounting software.
All plans allow you to track income and expenses, send invoices and receive payments, run reports, send estimates, track sales and taxes, and capture and organize receipts. More advanced plans allow you to track inventory, track time, and even run full-service payroll.
Best for Businesses Looking for a Tried-and-True Option
Intuit Quickbooks is one of the most (if not the most) prominent accounting software for small businesses. It’s been around long enough for you to have a solid idea of what you’re getting when you invest in it — an accessible, affordable, time-tested solution that can suit a company of virtually any size. If you’re looking for a safe choice that reconciles reliability with exceptional functionality, consider looking into Intuit Quickbooks.
Conclusion
Small business accounting software is intended for small and medium sized enterprises and it serves as a comprehensive and cost-efficient way to manage and maintain your enterprise. Having the right software is important to avoid situations that could affect performance later down the road. You may need to know what’s trending in this area based on research findings.