Managing a business’s finances is tough, especially for small business owners who do it all by themselves. Luckily, the right accounting software can help. PCMag, a top tech magazine, has been testing and rating accounting software for over 20 years. They’ve found the best apps for small businesses based on ease, functionality, and cost.
Key Takeaways
- PCMag suggests FreshBooks for very small businesses with one or two people. QuickBooks Online is best for small to medium businesses.
- Accounting software makes financial management easier, helps with making decisions, and gives valuable insights to business owners.
- Top cloud-based accounting software includes QuickBooks, Xero, FreshBooks, Zoho Books, and Wave Accounting.
- Prices for accounting software vary a lot, from free to more than $200 a month for advanced plans.
- Businesses should think about ease of use, features, pricing, and how well it works with other tools when picking the right accounting software.
Introduction to Accounting Software for Small Businesses
For small businesses, the right accounting software can change the game in managing money. It helps with everything from sending bills to tracking spending and making reports.
What is Accounting Software and Why is it Important for Small Businesses?
Accounting software is a digital tool for small businesses and their bookkeepers. It automates tasks like sending invoices and tracking money. This lets small businesses stay on top of their finances and make smart choices.
Benefits of Using Accounting Software for Small Business Owners
Using accounting software has many advantages for small business owners:
- Improved Efficiency: It automates financial tasks, saving time and effort. This lets owners focus on growing their business.
- Enhanced Accuracy: It reduces errors by doing data entry and reconciliations automatically. This means financial records and reports are more accurate.
- Increased Visibility: It gives detailed reports and real-time insights. This helps owners understand their finances better, making decisions easier.
- Simplified Tax Preparation: It makes preparing taxes easier by organizing expenses and creating the right financial statements.
- Improved Collaboration: It allows multiple users to access the platform, making it easier for owners, accountants, and bookkeepers to work together.
Accounting software helps small business owners manage their finances better. It leads to smarter decisions and helps their businesses grow and succeed.
QuickBooks Online: Best Overall Accounting Software
QuickBooks Online leads in small business accounting software. It’s known for its strong features, detailed reports, and easy integration. Over 88% of customers say QuickBooks makes their business more successful. It’s a top pick for small and medium-sized businesses.
Key Features and Advantages of QuickBooks Online
QuickBooks Online has many features for small businesses. It helps users get paid online faster with its invoicing. It also tracks transactions and provides reports for better financial management. Plus, its mobile app and integrations make work smoother.
Pricing and Plans for QuickBooks Online
QuickBooks Online has four plans for different business sizes and budgets. Prices range from $30 a month for the Simple Start plan to $200 for the Advanced plan. Even the Simple Start plan offers over 50 reports and basic accounting tools, great for small businesses.
| Plan | Price per Month | Key Features |
|---|---|---|
| Simple Start | $30 | – Over 50 reports – Core accounting functionalities |
| Essentials | $55 | – 3 users – Bill management – Inventory tracking |
| Plus | $85 | – 5 users – Advanced inventory – Project profitability |
| Advanced | $200 | – 25 users – Advanced reporting – Batch invoicing |
Whether you’re starting or have an established business, QuickBooks Online has a plan for you. It matches your accounting needs and budget.
“Invoicing through QuickBooks gets invoices paid online four times faster.”
Xero: Best Simple Accounting Software
Xero is a top pick for simple accounting software for small businesses. It has a clean and easy-to-use interface. This makes managing finances easy for small business owners. With powerful features and a mobile app for on-the-go access, Xero is great for businesses needing a straightforward accounting solution.
Xero lets you have an unlimited number of users on one account. This is great for small businesses with many team members needing access. It also has excellent reporting, letting you create custom reports and understand your finances better.
Xero offers pricing plans for businesses of all sizes, starting at $15 a month. You can try it free for 30 days before subscribing. The clear pricing, with no hidden fees or setup costs, makes it even more appealing.
Xero also focuses on cloud-based accounting. This means you can access your finances from anywhere with internet. You can work with your team and enjoy automatic data backups.
Xero is simple, functional, and affordable. It’s a top choice for small businesses looking for reliable and easy-to-use accounting software.
“Xero is my go-to accounting software for small businesses. The interface is intuitive, the reporting is excellent, and the mobile app makes it easy to manage my finances on the go.”
- Xero offers a 30-day free trial for users to explore the software before committing to a subscription.
- Pricing plans are tailored to suit businesses of varying sizes and stages, with options starting at $15 per month.
- No setup fees or hidden costs associated with Xero subscriptions; transparent pricing with details provided for different pricing plans and optional extras.
- Subscriptions are billed monthly in advance, and payment can be made using Visa, Mastercard, or direct debit. Users can upgrade, downgrade, or cancel their subscription with one month’s notice.
- Xero allows users to import data from other accounting software in bulk via CSV files after setting up the initial configurations within the platform.
- The Xero Accounting mobile app is compatible with iOS and Android, enabling users to manage their small businesses online from anywhere while keeping track of financial information such as invoices, bank account balances, profit and loss, cash flow, and bills to pay.
FreshBooks: Best for Service-Based Businesses
FreshBooks is a top choice for service-based small businesses. It offers easy-to-use accounting software with features like invoicing, project management, and time-tracking. These tools are perfect for service providers.
The software has an easy interface and settings that adapt to your needs. It also has special features like retainers for service-based businesses.
Standout Features for Service-Based Businesses
FreshBooks makes important tasks easier for service-based companies. It helps create professional invoices that look great. Plus, it offers secure online payments, making it simple for clients to pay.
It also has time-tracking features. Users can log hours worked and send payment reminders automatically.
FreshBooks works with over 100 business apps. This makes managing projects, creating proposals, and tracking miles easy. This automation is great for service-based businesses, saving time and improving client experiences.
Pricing and Plans for FreshBooks
FreshBooks has different subscription plans for various business sizes. The Lite plan costs $19 a month and supports up to 5 clients. The Premium plan lets you bill unlimited clients.
There’s also a custom-priced Select plan for more complex needs. FreshBooks gives a 10% discount if you pay yearly instead of monthly.
FreshBooks is perfect for service-based small businesses with its many features, smooth integrations, and flexible pricing. It has high customer satisfaction ratings and a global support team, making it a top pick in the industry.
Zoho Books: Best Startup Accounting Software
Zoho Books is a top pick for startup accounting needs. It’s a cloud-based solution designed for small businesses and new ventures. It has a user-friendly interface, powerful automation tools, and works well with other Zoho apps. This makes it a top choice for startups wanting to manage their finances better.
Why Zoho Books is a great choice for startups
Zoho Books is affordable, especially for businesses with less than $50,000 in annual revenue. It offers a free plan with key features like a customer portal, automatic payment reminders, and mileage tracking. You can also generate custom reports for free.
Its mobile-first design is perfect for startups. Founders and employees can manage finances on the go with ease. They can track invoices, expenses, and project profitability from anywhere.
Automation is a big plus for startups. Zoho Books lets you automate workflows, schedule actions, and get timely notifications. This saves time and helps with business growth.
Startups handle many projects and clients. Zoho Books has strong project management tools. You can create project quotes, manage payments, track time, and bill accurately. This ensures your finances are in order.
Zoho Books also works well with other Zoho apps. This lets startups manage everything on one cloud platform. It makes data sharing easier, cuts down on manual entry, and boosts efficiency.
Zoho Books is known for its easy-to-use interface, customizable templates, and great customer support. It’s affordable, automated, and has all the features startups need. This makes it a great choice for businesses in their early stages.
Sage 50cloud: Best for Inventory Tracking
Sage 50cloud Accounting is a top pick for managing business inventory. It has advanced tools for tracking and controlling stock levels. It works well with Microsoft 365 Business, offering extra features for remote work and complex inventory needs.
Powerful Inventory Management Features
Sage 50cloud shines with its strong inventory management tools. Businesses can keep detailed records of items, manage serialized inventory, and create assemblies. They can also use different costing methods. This is key for companies needing detailed inventory tracking and reports.
The software lets users customize dashboards to focus on what matters most for inventory. This makes it easier to see important inventory data quickly, helping with fast decision-making.
| Accounting Software | Monthly Pricing Range | Inventory Management Features |
|---|---|---|
| Sage 50cloud Accounting | $58.92 – $301.08 | Detailed item records, serialized inventory, assemblies, multiple costing methods, customizable dashboards |
| QuickBooks Online | $30 – $200 | Basic inventory tracking, stock level monitoring, item records |
| FreshBooks | $17 – $55 | Limited inventory management capabilities |
| Patriot Software Accounting | $20 – $30 | Basic inventory tracking, item records |
Sage 50cloud is pricier than some rivals but offers advanced inventory management. It’s ideal for businesses needing detailed stock control. Its Microsoft 365 Business integration adds to its value, offering a full accounting and inventory solution.
Wave Accounting: Best Free Accounting Software
For small businesses and freelancers, Wave Accounting is a top pick. It’s free and packed with features for managing money well. It’s perfect for those watching their budget closely.
Features and Capabilities of Wave Accounting’s Free Version
The free version of Wave Accounting has a lot to offer, including:
- Double-entry accounting for precise financial records
- Invoicing with templates and reminders for late payments
- Easy transaction management for tracking money in and out
- Support for many currencies for businesses worldwide
Wave Accounting also uses 256-bit SSL encryption to keep financial data safe. Over 2 million small business owners trust Wave’s software, making it a reliable choice.
The free version of Wave Accounting is powerful but has some limits. You might need to pay extra to scan receipts, and it lacks time-tracking tools. Still, for very small businesses and freelancers, it’s a great free accounting software option.
| Feature | Wave Accounting Free | Wave Accounting Pro |
|---|---|---|
| Double-entry Accounting | ✓ | ✓ |
| Invoicing | ✓ | ✓ |
| Expense Tracking | ✓ | ✓ |
| Automatic Bank Connections | ✓ | ✓ |
| Payroll | ✕ | ✓ |
| Receipts Scanning | ✕ | ✓ |
| Time Tracking | ✕ | ✓ |
Wave Accounting is the best free accounting software for small businesses and freelancers. It has great features, strong security, and is very affordable.
popular accounting software: Top Choices Compared
Choosing the right accounting software is crucial for businesses. It helps with invoicing, tracking expenses, preparing taxes, and reporting. We’ll look at the best accounting software for small businesses. We’ll compare their features and prices.
Comprehensive Accounting Platforms
For businesses needing a full accounting solution, options like NetSuite, Multiview ERP, and Striven are great. NetSuite is an all-in-one system for fast-growing businesses. It handles ERP, financials, commerce, and inventory management.
Multiview ERP suits businesses of all sizes, from small to large. Striven is a cloud-based ERP solution for various industries. It offers accounting, inventory management, HR, and CRM features.
Specialized Accounting Solutions
Some businesses need specific accounting software. ExpensePoint automates expense reporting for businesses of any size. Aplos is for nonprofits and faith-based groups. It has fund accounting, donation management, and financial reporting.
BoldTrail Back Office is for real estate brokerages. It includes accounting, commission automation, and transaction management.
Pricing and Plans
Accounting software prices and plans vary. Some offer free or low-cost options for small businesses. Others are for larger companies with more features.
Wave is free for startups and small businesses. Zoho Books has a free plan for businesses under $50,000 in revenue. It also has paid plans with automation and workflow features.
Comparing accounting software helps small business owners pick the best fit for their needs and budget. Knowing the strengths and limits of top options helps them choose wisely. This way, they can streamline their finances and support their business growth.
https://www.youtube.com/watch?v=CWbHLoNvohw
Conclusion
Choosing the right accounting software is key for small businesses. This article looked at top options like QuickBooks Online, Xero, FreshBooks, Zoho Books, Sage 50cloud, and Wave Accounting. Each has its own strengths for different business needs.
Small business owners should think about what they need, like invoicing, managing inventory, reporting, and how well it works with other tools. This helps pick the best accounting software for their company.
Getting the right best accounting software for small businesses helps manage finances better. It leads to smarter decisions and helps businesses grow and succeed. The top 10 online accounting software in 2024 offer great features, easy-to-use interfaces, and good reviews.
Whether it’s QuickBooks Online’s wide range of features, Xero’s easy layout, FreshBooks’ invoicing, or Zoho Books’ automation, there’s a solution for every small business. By choosing accounting software that fits their needs, small business owners can improve their financial management. This sets them up for long-term success.
FAQ
What is accounting software and why is it important for small businesses?
Accounting software helps small businesses manage their money well. It lets them send invoices, check financial accounts, take payments, and track spending and earnings. This software makes handling business finances easier and keeps business owners updated on their money situation.
What are the key benefits of using accounting software for small business owners?
Accounting software has many benefits for small business owners. It has an easy-to-use interface, even for those new to bookkeeping. It also has features like payroll, project tracking, and detailed reports that big businesses need. This software automates many financial tasks, saving small business owners time and keeping them on top of their finances.
Why is QuickBooks Online the industry leader in small business accounting software?
QuickBooks Online leads in small business accounting software. It has a strong set of features, like detailed reports and tracking tools, invoicing, inventory management, and a mobile app. It’s customizable, letting users organize transactions by department or location. QuickBooks Online is known for its big network of integrations and support from QuickBooks experts and resources.
What are the key features and pricing of FreshBooks?
FreshBooks is great for service-based small businesses with 50 or fewer clients. It shines at invoicing, managing projects, and tracking time, key for service businesses. It offers a great user experience, customizable settings, and features like retainers for service providers. FreshBooks also works well with other tools, making it easy to handle projects, proposals, and track miles. It has four subscription plans, from a month to a custom-priced Select plan.
Why is Zoho Books a great accounting software option for startups?
Zoho Books is a top pick for startups. It’s affordable, with a free plan for businesses earning less than ,000 a year. The free plan includes a customer portal, payment reminders, mileage tracking, and report scheduling. Higher plans add features like automation, project profit tracking, and inventory tools. Its mobile design, including an Apple Watch app, suits startups and small businesses well.
What are the key features of Sage 50 Accounting?
Sage 50 Accounting is a full accounting solution for businesses needing to manage inventory well. It has advanced inventory tools for precise stock tracking. It also works with Microsoft 365 Business, offering more features and support for remote work.
What are the key features and limitations of the free version of Wave Accounting?
Wave Accounting is a top free accounting choice. It offers many features for free, like double-entry accounting, invoicing, and transaction tracking across multiple currencies. But, the free version has limits, like extra fees for scanning receipts and no time-tracking tools. Wave is a solid, easy-to-use option for very small businesses and freelancers needing a free finance manager.
How can small businesses compare the top accounting software options?
By looking at key features and prices, small businesses can see what each accounting software offers. They can compare things like ease of use, reporting, inventory management, mobile apps, and tool integrations. This helps small businesses pick the best software for their needs and budget.