The Best Accounting Software for Small Business

As a small business owner, your focus is on your customers. Your priority is providing services, making your products available, and meeting your client’s needs.

To do this all effectively, you need systems running behind the scenes that are slick and organized. One of those systems is your accounting and bookkeeping process. If you’re reading this, the chances are good that you are investigating which is the best accounting software for a small business. 

How do you know which one will be right for your business? If you’re on the hunt for the best software, read on as we look into eight bookkeeping and accounting options.

What Are Your Accounting Needs?

Before you can home in on one accounting package, it’s important to understand what you need it to be able to do for you. Most accounting and bookkeeping programs cover the basics:

  • Cashbook / Bank Reconciliations
  • General Ledger
  • Debtors
  • Creditors

Apart from the essentials, consider what your accounting software needs to be able to do for your business to be effective and efficient. It might include any of the following:

Stock Management and Point of Sale

Is there is a retail element to your business? Keeping track of your inventory in an efficient manner will help you deliver a quicker service to your clients. Stock-taking will be easier, and it will also help you cut down on stock shrinkage.

A point of sale system linked to your inventory has many benefits. Apart from keeping your stock list accurate in real-time, a good point of sale system means check-out is quicker. This cuts down on customer queuing time and gives you happy customers. It also gives you insight into which stock lines are moving and which aren’t. 

Online Ordering & Payments

Does your business have an online sales portal for your products? Do you need a system that allows your clients to make online payments? If so, you’ll need to look for accounting software that can integrate various third-party merchant payment portals.

Payroll Capabilities

Not all accounting software programs have payroll capabilities built in. If being able to run a weekly, bi-weekly, or monthly payroll is part of what you need to do, make sure you choose a program that can do that for you. 

Number of Users

Is there a single person who needs access to the accounting program, or does your software need to accommodate multiple users? Come financial year-end, would it be useful for you to give your accountant access to your information? Work out how many users will need to have access to your bookkeeping software, then look for a solution that can accommodate that. 

Budgeting, Analysis, and Reporting

Each program has different reporting capabilities and individual ways of presenting the information. Find one that produces reports in a way that makes the information clear to you and gives you data that is most useful in the context of your business. 

Match Your Needs to the Best Accounting Software for Small Business

Different software will suit different organizations. First, get a clear understanding of what your accounting and bookkeeping software needs to do for you. Then you’ll be able to weigh up different software programs to find the one that matches your needs. Keep your needs in mind as you go through these options and compare what is available.

1. Quickbooks – For Hands-On, DIY Accounting

Thousands of small businesses use Intuit QuickBooks Online. This cloud-based software has a robust set of features that are accessed online or through the mobile app.

QuickBooks General Features

The basics of invoicing, payments, expense tracking, and receipt capture are covered. Cash flow statements, inventory management, and mileage tracking are all covered. The extent of these features varies depending on the plan you choose.

Additional Users

You can add additional users to your account and manage their access. This is a useful feature if you have multiple employees who need access to your information. You can limit their access to only see portions of the information on the system.

When it comes to financial year-end or tax time, your accountant can draw the information he needs directly. You won’t need to print out copious reports or send tons of emails.

Online Training Resources and Forums

Get help when you need it on all the clever ways to use this bookkeeping tool. Online training covers all you need to know to make the most of this bookkeeping tool.

Integrations

If you need a payroll solution, QuickBooks integrates with QuickBooks Payroll. This allows you to manage your team and make payments to them in one place.

For third-party payments, QuickBooks integrates with apps like PayPal, Stripe, and Square.

QuickBooks Business Plans

Depending on the features you need, QuickBooks offers four monthly plans:

  1. Simple Start – $25 per month for basic features such as income and expense tracking, invoicing, general reports, and sales and sales tax tracking.
  2. Essentials – $50 per month for everything in Simple Start, plus up to three users, time tracking, and bill pay.
  3. Plus – $80 per month for everything in Essentials, plus up to five users, inventory tracking, and project profitability tracking.
  4. Advanced – $180 per month for advanced features. This includes up to 25 users, automation, a dedicated accounts team, and exclusive premium apps.

QuickBooks Online is a great place to start if you want to streamline your bookkeeping and accounting but remain hands-on.

2. Wave Accounting – Free Basic Bookkeeping Solution

Wave’s accounting software is available at no charge online or via a mobile app. The free version of Wave is suitable for a freelancer or a service business as they don’t offer inventory management or payroll-related features.

Wave’s General Bookkeeping Features

Full income and expense tracking, as well as sorting into tax categories with the option of including, or excluding sales tax. There is unlimited capacity for bank and credit card connections. It also has receipt scanning capabilities and invoicing.

Wave is built on a fully functional double-entry system and allows you to generate financial statements for year-end.

Multiple Users and Businesses

Wave allows you multiple partners, collaborators, and accountants. For those who are entrepreneurial to the core, you can also run multiple businesses in one account.

Tracking and Reporting

With a live dashboard, you can track the performance of your business instantly. Wave also has a powerful reporting functioning for overdue bills and invoices, profit and loss, as well as cash flow.

Wave Premium Add-ons / Paid Features

Besides the free accounting features, Wave offers additional paid features that cover integrations with Stripe, Shopify, HubSpot’s CRM, and more.

  1. Payment Processing – 2.9% + 30¢ per transaction for Visa, Mastercard, Discover; 3.4% + 30¢ per transaction for American Express; 1% ($1 minimum fee) per ACH bank payment.
  2. Payroll – $20 or $35 monthly base fee (depending on what state your business operates in) + $6 per active employee and $6 per independent contractor paid.

Wave offers a nice balance for those who want to keep accounting costs low while still having access to additional features if needed.

3. GoDaddy – Ideal for an E-Commerce Business

GoDaddy is best known for its web hosting and website creation. They also offer a user-friendly bookkeeping solution. Setting it up for the first time takes minutes and you don’t need any accounting knowledge to work with it.

GoDaddy offers good invoicing tools and a comprehensive dashboard. Another useful feature is that it calculates estimates for quarterly taxes. Apart from business reports such as profit and loss statements, it also can capture mileage and time tracking.

The features of GoDaddy’s online bookkeeping software include estimates, one-off invoicing, and recurring invoices. You can receive payments through your mobile device, though at this stage it lacks multi-currency support. 

The Ultimate E-Commerce-Friendly Solution

If your business focuses on e-commerce, GoDaddy is for you. GoDaddy has the ability to sync to Amazon, Etsy, eBay, PayPal, and other e-commerce business accounts.

GoDaddy Monthly Plans

  1. Get Paid – $4.99 per month for invoicing, estimates, payments, time tracking, mileage tracking, and the current year’s business reports.
  2. Essentials – $9.99 per month for everything in Get Paid, plus unlimited business reports, tax worksheets, and automatic sales and transaction imports.
  3. Premium – $14.99 per month for everything in Essential, plus the option to create and send recurring invoices.

While it doesn’t offer features such as payroll management or advanced automation, GoDaddy is a great option if you’re an e-commerce seller.

4. FreshBooks – Invoice Like a Pro

If you spend a lot of time sending out estimates, invoicing, and sending payment reminders, Freshbooks may be the tool for you. Even though you can customize Freshbooks, it requires little to no experience to use.

Freshbooks Customizable Features 

Customer-related features are customizable. Including sending out estimates, unlimited invoices, payment reminders, adding late fees automatically, as well as accepting deposits and payments. Clients can be billed on a retainer or subscription basis. Freshbooks supports multiple currencies and languages.

Using Freshbooks you can manage project budgets, integrate tax apps and filing tools. Integration is available with other tools such as GSuite, Gusto, and Bench.

Freshbooks Payment Plans

Annual plans are available at discounted rates. A Select plan is available on request with specialized features and a dedicated account manager.

If you’d prefer a monthly option:

  1. Lite – $15 per month for basic features such as invoicing up to 5 clients, tracking unlimited expenses, and accepting credit card payments and bank transfers.
  2. Plus – $25 per month for automatic expense tracking, invoicing up to 50 clients, recurring billing and retainers, business health reports, and the option to invite your accountant.
  3. Premium – $50 per month for unlimited clients, project profitability tracking, bill payment, and tracking.

Freshbooks has been described as a ‘solid small-business accounting product that is well-suited for freelancers and independent contractors.’

5. Xero – Simple and Effective

Bookkeeping and accounting can be frustrating enough if you’re not a pro. Learning how to use complicated accounting software on top of that is most likely not your ideal solution. Xero is simple, straightforward online accounting software. It has enough functionality to accommodate a small business at any stage of growth.

Xero’s Features

Invoice and quote sending, transaction reconciliation, bill and receipt capture, cash flow and business snapshots, project tracking, expense claims, and even analytics.

An optional Gusto payroll add-on to calculate pay and deductions, pay employees, and simplify compliance.

Integrations with apps and tools such as Stripe, PayPal, WooCommerce, Pipedrive, and more.

Xero’s Monthly Plans

  1. Early – $11 per month for the basic plan. This includes up to 20 invoices and quotes, five bills, Hubdoc for capturing bills and receipts, bank transaction reconciliation, and short-term cash flow and business snapshots.
  2. Growing – $32 per month for everything in Early, plus unlimited invoices, quotes, and bills, and bulk transaction reconciliation.
  3. Established – $62 per month for everything in Growing, plus support for multiple currencies, project tracking, expense claims, and in-depth analytics.

Its simplicity and scalability make it one of the best online accounting software options available.

6. Sage Business Cloud Accounting for Multiple Users

Sage Business Cloud Accounting is also cloud-based accounting software that doesn’t require any accounting knowledge to use. It recommends the best accounting solutions based on your industry, company size and unique business needs.

General Sage Features

Sage makes it simple to create and track invoices, manage inventory, accept payments, automate admin, track expenses, and track and forecast cash flow. Sync information from your bank account, as well as apps such as Gmail, Miro, and Typeform.

Multiple users are supported at no extra cost, be they employees or your accountant. Add-ons are available for estimating and human resources management. 

Sage Monthly Plans

  1. Sage Accounting Start – $10 per month for creating and sending invoices, tracking accounts receivable, and automatic bank reconciliation.
  2. Sage Accounting – $25 per month for everything in Sage Accounting Start, plus automatic receipt capture, unlimited users, quotes and estimates, cash flow forecasting, and purchase invoice management.

Sage Accounting works for a wide range of industries, so you can use it whether you’re a service-based or product-based business!

7. Zoho Books – Bookkeeping Made Simple With Automation

Not only is Zoho Books easy to set up and use, but it’s also easier than most tools to manage due to its focus on automation.

Zoho Book Features

Zoho Books’ robust set of features includes one-off and recurring invoicing, online and offline payments, automatic tax calculations, bank transaction reconciliation, and 1099 contractor management. Additional Users and advanced auto-scans are also included.

Zoho Integration includes Zoho Apps, Zendesk, Zapier, and others.

Zoho Books Monthly Subscriptions

  1. Basic – Free for up to $50,000 in annual revenue, up to 1,000 invoices per year, one user and one accountant, offline and online payments, expense and mileage tracking, email support, and more.
  2. Standard – $20 per month for everything in Basic, plus up to three users, 5,000 invoices, project expense tracking, additional integrations and customer support options, recurring expenses, and so on.
  3. Professional – $50 per month for everything in Standard, plus up to five users, 10 automated workflows, timesheet tools, project profitability, retainer invoices, and more.
  4. Premium – $70 per month for everything in Professional, plus up to 10 users, 200 automated workflows, custom functions, and scheduling, a vendor portal and custom domain, budgeting tools, additional integrations, and more.

With such a wide range of functionality, this tool provides just about everything you need to get control of your business finances now and keep control of them in the future.

8. Bench – Outsource Your Bookkeeping

What if DIY accounting isn’t for you? If the thought of doing your own books feels like too much work or you simply don’t feel confident that you’ll do it all right, consider a hands-off solution – Bench.

Bench is an online bookkeeping service powered by real humans. Working with Bench gives you a dedicated bookkeeper who is supported by a team of small business experts. This dedicated bookkeeping team takes the guesswork out of running your own business as they import bank statements, categorize transactions, and prepare financial statements monthly. 

Bench is America’s largest professional bookkeeping service for small businesses. When you start with Bench, you get your first month of bookkeeping for free. 

Bench Basic Plan

The basics of a Bench bookkeeping plan include monthly bookkeeping with a dedicated team. At the end of the financial year, you’ll receive tax-ready financial statements. An in-house team of experts is available for direct, unlimited communication and advice.

Bench Premium Plan

Upgrade to a Premium plan for the added benefits of an unlimited tax strategy planning, tax advisory service, and annual tax filing. A hands-off bookkeeping and accounting solution will free up hours of your time every month. It will also give you peace of mind knowing your books are up-to-date and error-free.

Prices are determined after a consultation. You’ll be advised which plan is right for you.

The Benefits of Outsourcing Your Bookkeeping

If you’ve never considered outsourcing your bookkeeping before, you may think of it as an expensive solution. Yet there are many factors to take into consideration before accepting that as a fact. Consider these reasons:

Lower Your Bookkeeping expenses

Operational costs drop when you outsource bookkeeping services. At a glance, hiring in-house staff may seem less expensive on an hourly rate basis, but keep in mind what it takes to hire, train, and supervise them into competency. Then factor in payroll taxes, benefits, and turnover, the calculated hourly compensation for in-house staff adds up to much more than what they get paid per hour. 

Use Your Personnel More Efficiently

Outsourcing routine bookkeeping tasks frees your in-house team to focus on revenue-generating processes, production, and other core services. You’re also saved from having to find work for the in-house accounting staff when their work is up-to-date. Using a service means paying for only the hours you need.

Business Development Focus

Nitty-gritty accounting details can plague senior staff, but when you take that demand off them, you create an environment in which they can focus on income-generating ideas and areas.

Improve the Quality of Work

To outsource your bookkeeping is to place your paperwork into the hands of professionals who have an up-to-date working knowledge of:

  • GAAP standards
  • Payroll requirements
  • Reporting and records management
  • Tax requirements

This means that your bookkeeping will be done to a higher standard as the reputation of the accounting service depends on it. 

Reliable Service, Done On Time

An external bookkeeping company understands the importance of meeting financial deadlines. They also know how vital it is to work accurately and will provide what the business owner needs when it’s needed.

Even the best bookkeeping software is only as good as the data that is entered. If you’re not a trained bookkeeper or accountant you may make mistakes that can skew the reports that are produced and potentially land you in tax trouble.

Increased Security 

Handing your in-house accounting functions to a professional, external, accounting service provider, enhances the security of your financial records. A professional accountant has safeguards in place to limit access control, maintain confidentiality, and prevent redundant data backup. 

Professional Guidance that is Knowledgable and Experienced

There are times that you’ll need business advice on things that you don’t have knowledge or experience in. That’s when it will come in handy to have a team of professionals on call that you can draw on. Working with an external bookkeeping company gives you access to such experts. They will give you small business tips and help you run your business more efficiently and effectively. 

Hands-on or Hands-off? Which Accounting and Bookkeeping Solution Is Best for You? 

If the best accounting software for a small business will meet your needs, the hands-on approach might be just right for you.

If you find running payroll, tracking AP and AR, and being responsible for the multitude of routine accounting functions is a drain on your resources rather than being an asset to your business, you might consider hiring an experienced, reputable accounting service provider to deliver an efficient, cost-effective, quality work product that meets your operational needs and timelines.

If you’re looking for a hands-off solution that gives you time to take your business where you know it can go, contact us today for a free consultation

Share this post