Managing the accounting needs of a small business is an integral part of day-to-day operations. Keeping track of cash flow, creating reports, handling tax preparation, and performing bookkeeping are just a few of the accounting tasks that are mandatory for the successful operation of your business.
Now while every small business owner would like to hire their own small business accountant to manage their books, not every business owner will have room in the budget for these services. Luckily, there are a few really great options when it comes to small business accounting software
Small business accounting software can help you manage your finances as well as generate reports, invoices, and purchase orders. When all of your financial information is automated and integrated this way, it translates into savings of both time and money.
When small businesses use accounting software to automate their business accounting processes, owners and employees have more time to focus on customers and business growth and development.
There are many choices when it comes to accounting software today, so your focus should be to find one that is easy for you to use and affordable. The software should also make it easy for you to look at a snapshot of your financial summary and track your income and expenses.
Here are some pros, cons, and comparisons of the best small business accounting software on the market today.
QuickBooks is one of the most popular accounting solutions out there. Most accountants are familiar with it, and it includes many features that cover most of the needs of any small business. They offer both a desktop and an online solution, and each has its own set of benefits.
QuickBooks Desktop Pro
QuickBooks Desktop Pro has been a go-to for small businesses since the 1990s, and it is still extremely popular today. It is typically installed on one computer, and it is loaded with features that can be used by just about any small business. These features include:
- Income and expense tracking
- The ability to create invoices and receive payments
- The ability to create and send estimates
- The capability to track sales and sales tax
- Bill management
- Inventory tracking
- Integration with numerous apps
You can also gain the following benefits for an additional monthly charge:
- Added users
- Report running capabilities
- The ability to sync bank transactions
- Phone support
- Product upgrades
- Cloud access
The cost for Desktop Pro is $299.95, but if you want accounting software that has a reputation for effective financial solutions, this small business accounting software is worth the investment. In addition, QuickBooks offers Desktop Pro Plus, Desktop Premier, and Desktop Premier Plus with additional features for an additional cost.
QuickBooks Desktop Pros:
- Many features available
- Integration with other apps
- Most accountants are familiar with it
- Easy to use
QuickBooks Desktop Cons:
- Limited account users
- Requires local hosting
If you are looking for greater flexibility and access anywhere you have an Internet connection, QuickBooks Online is a great choice. With a wide range of pricing plans available, you can select the plan that is best for your business. They offer the following four plans:
- The Simple Start plan costs $25 per month and allows one user.
- The Essentials plan costs $40 per month and allows three users.
- The Plus plan costs $70 per month and allows five users.
- The Advanced plan costs $150 per month and allows 25 users.
Whichever plan you choose, all of the online plans include the following capabilities:
- Tracking income and expenses
- Capturing and organizing receipts
- Maximizing tax deductions
- Tracking mileage
- Invoicing and accepting payments
- Running basic reports
- Creating and sending estimates
- Tracking sales and sales tax
- Syncing bank transactions
- Accessing product updates
- Phone support
- Cloud access
The Essentials Online plan includes these additional capabilities:
- Scheduling invoices
- Entering employee timesheets
- Managing bills
And the Plus Online plan includes these benefits:
- The ability to track project profitability
- The ability to track inventory
In addition, QuickBooks offers payroll solutions for an additional fee. QuickBooks online is loaded with features, and it is widely popular. In addition, there are often incentives to try the first three months for a reduced cost. This software offers solutions for just about any small business, and there is sure to be a plan that works for you.
QuickBooks Online Pros:
- Access online anytime, anywhere
- Simple and easy to use
- Affordable monthly pricing
- Multiple plans to choose from
- Easily customizable
QuickBooks Online Cons:
- Fewer capabilities than QuickBooks Desktop
Although QuickBooks Desktop offers more functions, QuickBooks Online plans offer solutions to a wide range of small businesses. The platform is easy to learn, easy to use and offers flexibility and mobility, as well as customer support.
Xero offers cloud-based accounting software, and it is one of the fastest-growing companies in the field. Xero knows that small business accounting software needs to monitor finances in real-time to track cash flow and balance sheet shifts.
Xero offers top-of-the-line functionality combined with simplicity and mobility, and it is fast becoming one of the top accounting solutions for small businesses around the globe.
Xero offers its software in three different plans:
- The Early Plan costs $9 per month and includes sending up to five invoices and quotes, entering five bills, and reconciling twenty bank transactions.
- The Growing Plan costs $30 a month and offers the same services without limits.
- The Established Plan costs $60 a month and includes greater functionality. In addition to the functions above, it can handle multiple currencies, manage expenses, and track projects.
Xero also offers payroll solutions for an additional cost.
- Pay invoices faster with automated and intuitive invoicing
- Manage inventory and stock easily
- Flexibility and mobility
- Integrate with over 700 third-party apps and tools
- Create expense records
- Create and email purchase orders on mobile devices
- View a real-time financial snapshot
- Must have an Internet connection to access
- It’s a new company, so people are less familiar with it
Overall, Xero is a great choice for many small businesses, especially those that need flexibility and mobility. It works well for invoicing, and it helps small businesses monitor their financial picture in real-time. With different monthly plans, this software is affordable for most businesses.
FreshBooks is accounting software that is cloud-based and easy to use. It is also known for its award-winning customer service, which is included in each of its monthly plans. Their small business accounting software has great functionality without being difficult to learn or use, and there are no limitations on the number of invoices, expense entries, time tracking, or estimates in any of their plans.
FreshBooks has three monthly plans, as well as a customizable option:
- Lite costs $15 per month and includes five billable clients.
- Plus costs $25 a month and includes 50 billable clients.
- Premium costs $50 a month and includes 500 billable clients.
All plans offer the following features:
- Unlimited customized invoices
- Unlimited expense entries
- Ability to accept credit card payments online
- Ability to accept ACH bank transfers online
- Automated bank import
- Unlimited time tracking
- Unlimited estimates
- Insightful tax time reports
The Plus Plan offers all of the above, as well as the following benefits:
- Unlimited proposals
- Automated recurring invoices
- Double-entry accounting reports
- Ability to schedule late fees
- Automated late payment reminders
- Client retainers
The Premium Plan offers the same features as the Plus Plan, but it increases the number of billable clients to 500.
- Easy to use
- Growing integration with third-party software
- Allows for customization
- Pricing: if you have a lot of clients, it can become expensive
- Difficult to create bulk invoices
FreshBooks is considered to be one of the top choices for small businesses looking for mobility, as it can be run on your computer or through the FreshBooks app on your mobile device. While it is not the top software for inventory management, it is ideal for businesses that want mobility, simplicity, and automated features.
Wave is one of the only options for small business accounting software that is free. Small businesses can use Wave anywhere where there is an Internet connection, and features such as the following are included:
- Unlimited income and expense tracking
- Unlimited bank and credit card connections
- Ability to run multiple businesses in one account
- Unlimited invoicing in any currency
- Receipt scanning
- Bill and invoice reminders
In addition, Wave offers several services that have fees:
- Online payments: 2.9% + $0.30 per transaction
- ACH payments: 1% per transaction ($1 minimum fee)
- Payroll: $35 per month + $4 per active employee including Independent Contractors in California, Florida, Illinois, New York, North Carolina, Tennessee, Texas, Virginia, and Washington
- Payroll: $20 per month +$4 per active employee including Independent Contractors in all other states.
- Easy to navigate
- Data syncs instantly
- Allows all your finances to be in one place
- Multi-currency compatibility
- Ability to create automated reports
- Limited mobile app integration
- Not as friendly to large businesses
Email support is available for all software, and live chat support is available for paid services. Wave is a great choice for small businesses, sole proprietors, and anyone who wants a simple, free, and automated accounting system that is mobile.
When you are looking for small business accounting software, you need to consider Zoho Books. This software is affordable, yet it offers many features. Its price point makes it a great option for small businesses that want to save money.
Zoho Books offers the following three plans:
- The Basic Plan costs $9 per month and allows 50 contacts, two users, and ten automated workflows.
- The Standard Plan costs $19 per month and allows 500 contacts, three users, and ten automated workflows.
- The Professional Plan costs $29 per month and allows unlimited customers, ten users, and ten automated workflows.
The following features are included in all three plans:
- Bank reconciliation
- Custom invoice creation
- Expense tracking
- Project and timesheet creation
- Recurring transactions
- Sales approval
The Standard plan also includes:
- Vendor credits
- Reporting tags
- Purchase approval
- Twilio integration
Finally, the Professional Plan includes these additional features:
- Purchase orders
- Sales orders
- Custom domain
- Solid bookkeeping and accounting features
- Fewer third-party integrations
- Lacks payroll capability
Choosing The Best Accounting Software For Your Small Business
Choosing the right accounting software for your business is a very important decision, especially if you’ll be managing the books yourself. It’s important that you find a tool that meets all your needs, functionality requirements, and is easy enough to use.
If you have any questions at all about accounting software, small business accounting, or having us manage your QuickBooks for you don’t hesitate to reach out. Our team of QuickBooks Certified Pros is standing by to help.