Small Business Accounting Software Startups provides you with a set of professional tools designed to make your day-to-day accounting tasks much easier. With integration capabilities and modular enhancements, we aim to solve the problem of increasing the efficiency of your business and make it possible to close in just a few minutes.
This is the right time to start your own business. But the main question is how to plan and manage the business. To keep your business in order, we advice you count on an accounting software. It will be a good idea if you take help from a startup software for small businesses or an apt offline or online accounting solution.
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
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
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
Xero – $11 to $62/month
Why you should buy this:
Xero is best if you need a complete small business accounting software solution to manage your books but prefer a more minimalistic and simplistic accounting software for small business. Xero handles income and expenses, inventory management, A/R and A/P, bank and credit card tracking, and other accounting tasks that small business owners need, but with fewer reports and other less necessary features.
Who is it for:
Xero is best suited for less complex businesses, more like your mom and pop shops, one-off restaurants, even Etsy stores, think self-employed individuals. It is great for small business owners needing fewer accounting features.
Why we picked it:
We like Xero as our third choice for the best accounting software for small business because of its simplicity and ease of use. Xero’s cloud-based accounting software does what you would expect, like record transitions, calculate tax, and track both inventory and financial data. Plus, you can easily integrate with Gusto Payroll for an additional fee.
Price Breakdown:
Early ($11 per month)
- Ability to send quotes and up to 20 invoices online
- Tracking for up to five bills
- Bank reconciliation
- Data capture with Hubdoc
- Connection with banks
- Inventory management
- Accounting reports
- Online invoice payments
- Purchase orders
- File storage
- Contact management
- Sales tax management
Growing ($32 per month)
- All features in the Early package
- Ability to send unlimited quotes and invoices online
- Unlimited bill tracking
- Bulk transaction reconciliation
Established ($62 per month)
- All features in the Early and Growing packages
- Multi-currency capabilities
- Project tracking
- Ability to take photos of receipts
- Expense monitoring
Pros and Cons:
Pros:
- Easy to use bookkeeping software
- Simple inventory management to run your business smoothly
- Run basic reports and analytics to measure the health of your small business
- Record products and services in the business ledger
- Calculate tax and other miscellaneous expenses
- Manage and make manual journal entries as needed
- Lots of payment processing options through various app integrations
- Good software for self-employed persons
- Easy to use mobile app
Cons:
- Business owners get fewer features than with other small business accounting software
- Fewer reports than FreshBooks and Intuit QuickBooks
- Less customer service and support options
- Inventory management is quite basic
- Xero charges for ACH transactions
Customer Service:
Xero also boasts excellent customer feedback, as they maintain a 4.4 average score out of 5 on GetApp. We love how they’re constantly evolving and improving their platform, which is a major reason Xero nears the top of our best for small businesses accounting tools review.
QuickBooks Self-Employed
QuickBooks Self-Employed accounting software is our top choice for part-time freelancers and independent contractors who primarily want to track their income and expenses for their tax return. This software is designed for business owners who file a Schedule C on their individual tax return.
Without keeping up with business activity using a software like this, freelancers would need to dig through all of their bank and credit card statements to add up their income and expenses at the end of each year, which can be quite daunting. QuickBooks Self-Employed will total up all business transactions automatically.Pros
- Cloud-based
- Mobile app
- Track mileage
- Differentiate between business and personal expenses
- Syncs with TurboTax
Cons
- Data cannot be easily transferred to other accounting software
- Limited reporting
- Limited invoicing functionality and customization
QuickBooks Self-Employed is an Intuit product with a cloud-based online interface and a mobile app. This software was created to help freelancers stay organized each year for tax season. Features of QuickBooks Self-Employed include tracking mileage, sorting expenses, organizing receipts, sending invoices, and estimating and filing taxes seamlessly through TurboTax.
Users can choose between three plan options: Self-Employed at $15 per month, Self-Employed Tax Bundle at $25 per month, and Self-Employed Live Tax Bundle at $35 per month. There is a 50% discount for the first three months. The two tax bundles include a TurboTax subscription for income tax filing. The Self-Employed Live Tax Bundle also gives you access to a CPA to answer questions throughout the year and during tax season. The CPA will also perform a final review of your tax return in TurboTax prior to filing.
The mobile app makes it easy to track mileage while driving and capture photos of receipts for business expenses. Most accounting software is not designed to separate business transactions from personal transactions, but a special feature of QuickBooks Self-Employed provides an option to mark each transaction as business or personal. This is helpful for freelancers who don’t have a separate bank account for their business activity.
Conclusion
Small Business Accounting Software for startups allows you to track your business income and expenses. Allows tracking of sales, purchases, loans and investments. A variety of reports help you analyze profit and loss. Manage employees time and labor cost, calculate payroll taxes and generate paychecks. Email and mobile reporting helps you keep in touch with your employees.