According to our research, QuickBooks Online is the best accounting software for small business due to its popularity with accountants, active user base, and broad collection of helpful tools and resources to help users master the software. The best software accounting packages are easy to use, offer robust tracking and planning tools and reports, integrate with other software, and are easy to share with outside bookkeepers and accountants. We researched 19 different business accounting software products, and evaluated them based on their cost, scalability, ease of use, reputation, and accounting features. Try Xero for free for 30 days. Get set-up with free onboarding support, connect with any of our 1,000+ app partners, and choose which of our 3 subscriptions is best for you Best Accounting Software for Small Businesses for April 2024 Best Accounting Software for Small Businesses for April 2024 The Bottom Line Compare Software What Is Accounting Software for Small Business? How to Choose Alternatives to Small Business Accounting Software Why You Should Trust Us FAQ Methodology Learn More About Small Business Accounting Key Specs Why We Chose It We picked QuickBooks Online because of its wide use among small business accounting professionals and its numerous online training resources and forums to get support when you need it.Plus all accounting tools and features can be conveniently accessed through one main dashboard, making bookkeeping more fluid and efficient. Pros & Cons Pros Scalable Commonly used by accounting professionals Integration with third-party applications Cloud-based Has mobile app Cons Upgrade required for more users Occasional syncing problems with banks and credit cards Overview Intuit’s QuickBooks Online has been one of the most common accounting software programs used by small businesses and their bookkeeping and tax professionals. The cloud-based software can be accessed through a web browser or a mobile app. There are four options for monthly subscription plans: You can select to have a 30-day free trial, but if you elect to skip it, you'll receive 50% off the first three months. The monthly subscription for this software can be upgraded as a business grows. The feature-packed mobile app can be used to receive payments, send invoices, capture an image of a receipt, provide estimates, and more. For businesses looking for a payroll solution, QuickBooks Payroll fully integrates with QuickBooks Online. Each plan offers more advanced features like inventory management, time tracking, additional users, and cash flow. Most service-based small businesses will find that Simple Start meets all of their needs. Essentials adds additional features for bill and time management. For product-based small businesses, Plus will have more options for inventory and customizations. The Advanced subscription adds many features including expense management, exclusive premium apps, a dedicated account team, and on-demand training. All plans allow integration with third-party apps such as Stripe or PayPal. QuickBooks Online’s app store breaks down all of its apps by function and provides helpful examples of the benefits of each app. Intuit, the company that produces QuickBooks, is a small business accounting and services behemoth, with more than 17,000 employees, and a roster of brands that includes QuickBooks, TurboTax, Mailchimp, and Credit Karma. It is headquartered in Mountain View, California. Key Specs Why We Chose It We chose Xero for really small "micro-business" that have just a few invoices and bills per month. For businesses of that size, Xero's "Early" subscription plan may be a good fit. At just $15 per month, it's limited to just 20 invoices (or quotes) and five bills per month. The plan also offers a receipt capture tool and a cashflow tool. Pros & Cons Pros Cloud-based Has mobile app Payroll integration with Gusto Third-party app marketplace Simple inventory management Cons Limited reporting Fees charged for ACH payments Limited customer service Overview Xero offers three monthly subscription options and a full-service payroll add-on: The company offers 50% off for the first three months.The full-service payroll option is offered through Gusto and starts at an additional $40 per month, plus $6 per employee. You can try Gusto free for three months. The Early plan limits usage and only allows entry for 20 invoices or quotes and five bills per month. This limited plan may be suitable for a micro-business with high-ticket transactions but only a few per month, such as a consulting or small service provider. Both the Growing and Established plans offer unlimited invoices and bills. The only difference between the two is that the Established plan has additional features like multi-currency, expense management, and project costing. All three plans offer Hubdoc, a bill and receipt capture solution. Xero was founded in 2006 in New Zealand and now has over 3.5 million subscribers worldwide. This accounting software is popular in New Zealand, Australia, and the United Kingdom. Xero has over 4,500 employees and is growing rapidly in the U.S., as well. Key Specs Why We Chose It We like FreshBooks for service-based businesses because it excels at producing proposals, tracking time on projects, and receiving payments—all key processes for service-based businesses. FreshBooks's primary function is sending, receiving, printing, and paying invoices, but it can also handle a business’s basic bookkeeping needs. Pros & Cons Pros Cloud-based User-friendly interface Third-party app integration Affordable Advanced invoicing features Cons Reporting features not available in mobile app Additional users cost extra Overview There are four different Freshbooks plans to choose, and businesses can get a 10% discount if they choose to pay yearly rather than monthly. Additionally, FreshBooks often offers discounts for your first months of membership. The main difference between the four plans is the number of different clients that can 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 includes the advanced payment feature for free ($20 extra each month with other plans), which allows users to charge a credit card in real-time or set up a recurring credit card charge for a client. Many third-party app integrations are available, such as Gusto, 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. Founded in 2003 in Toronto, FreshBooks started as just an invoicing tool. Over time, more features have been added, and as of 2023, FreshBooks has over 30 million users. Key Specs Why We Chose It This is our top choice for part-time freelancers and independent contractors who primarily want to track their income and expenses for their tax returns. It's designed for business owners who file a Schedule C on their individual tax returns and need help separating business and personal transactions. QuickBooks Solopreneur replaces QuickBooks Self-Employed, which is no longer available to new subscribers. Existing Self-Employed subscribers can continue to use the older product. QuickBooks has also created a FAQ page that explains the differences between the two. Pros & Cons Pros Cloud-based Mobile app available Tracks mileage Differentiates between business and personal expenses Syncs with TurboTax Cons Somewhat difficult to upgrade to QuickBooks Online Relatively expensive for limited tools Overview QuickBooks Solopreneur is another 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 Solopreneur include tracking mileage, sorting expenses, organizing receipts, and estimating and filing taxes through TurboTax. There is a 50% discount for the first three months. Solopreneur also gives you access to a tax expert to answer questions throughout the year and during tax season. 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 Solopreneur 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. What's the difference between QuickBooks Online and QuickBooks Solopreneur? In short, Online is the more comprehensive and robust option, meant for businesses with lots of vendors, employees, and clients. Solopreneur lacks Online's reporting, inventory, and sales tracking tools. Both track expenses and can help you at tax time. If you're working a side hustle or run a micro business, Solopreneur can help you track receipts and expenses (and keep them separate from your non-business expenses), and it can help you meet your quarterly tax filing requirements. Key Specs Why We Chose it Wave is a good choice for a service-based small business that sends simple invoices and doesn’t need to run payroll. Best of all, it's free (for the basics). At year-end, accountants can pull the necessary reports from Wave to prepare a business’s tax return. Pros & Cons Pros Free accounting and invoicing No transaction or billing limits Run multiple businesses in one account Unlimited number of users Mobile app available Cons Integrations only through Zapier Higher fees for credit card payments Full-service payroll is limited to only 14 states Receipt scanning costs $8/month Overview This free software includes the foundational accounting features that most small businesses need, such as income and expense tracking, financial reporting, sending invoices, and scanning receipts. These features can be accessed online or via the mobile app. There's also a more robust "Pro" plan for $16 per month. Wave makes its money to support its free offering on its payment gateway. To process a credit card payment from a customer, Wave charges 2.9% plus 60¢ per transaction for Visa, Mastercard, and Discover and 3.4% plus 60¢ per transaction for American Express. These fees are slightly higher than other accounting software. (The Pro plan includes 10 credit card transactions with no transaction or "swipe" fees per month.) Additionally, Wave charges 1% per transaction with a $1 minimum fee to process an ACH payment rather than a credit card. 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 $40 per month plus $6 per employee or contractor. In this plan, payroll is full-service, meaning that all tax filings and payments are managed by Wave. It is only available in 14 states. Wave was founded in 2010 and is based in Toronto. Nine years later, it was purchased by H&R Block and has over 250 employees. QuickBooks Online topped our list for its scalability, training resources, and mobile app. But micro-businesses may find their needs more affordably met by Xero, and self-employed individuals will appreciate the ability to categorize personal and business expenses with QuickBooks Solopreneur. Service-based businesses that want the best invoicing tools and customization will be best-served by FreshBooks. And if you’re looking for a free solution to business’s invoicing and accounting needs, Wave is a good option. Accounting software packages are specialized computer programs that help businesses, track invoices, generate reports, and record and report financial transactions. Large firms may choose complex, customized accounting software packages that track inventory, manage accounts payable and accounts receivable, and handles payroll. For smaller businesses, off-the-shelf packages like those highlighted here can accomplish most or all of the firm's accounting needs. Accounting software reduces the amount of time spent on manual data entry by allowing users to sync their business bank accounts and credit cards with the software. Once synced, bank transactions will flow into the accounting software, which can be categorized into various accounts. This process can also reduce human error, and make a time consuming task more efficient. Most accounting software is easy to use, but a general understanding of accounting practices will help ensure that financial reports are prepared correctly. For this reason, many small business owners hire bookkeepers or accountants to maintain or review their books. Cloud-based accounting software makes it convenient for businesses to share their accounting data with their bookkeepers or accountants. Many accounting software packages allow third-party application integrations. For example, if a business owner uses a point of sale (POS) system to capture sales transactions, the POS system could potentially integrate with the accounting software to record specific transactions, sales tax liabilities, sales by subcategories, and more. In a service-based business, a time-tracking application could integrate with the accounting software to add labor to a client invoice. Accounting, and accounting software, can often seem like dull chores that take away from the "real work" of running and growing a business, like marketing or sales or delivering your product or service. But avoiding the accounting can be a mistake, especially for businesses that have grown beyond the "micro business" stage. Accounting software can make the process more efficient and less tedious. And it can help your business in other, more strategic ways: Start your search by understanding your business and what it needs from accounting software. Depending on the accounting software you choose, you may have access to some of the following features: Investopedia collected and analyzed scores of key data points from 19 companies to identify the most important factors for readers choosing accounting software for small business. We used this data to review each company based on cost, scalability, reputation, accounting features, and other factors to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999, and has been helping readers find the best accounting software for small business since 2020. Small business accounting software ranges from $0 to $150 or more per month. Basic plans are in roughly the $0 to $40 per month range and are a great place to start. With a basic plan, a small business will be able to categorize income and expenses, send invoices, and prepare financial reports. As a business grows, most software is scalable, and a plan can be easily upgraded to meet new business needs, but it will cost more than a basic package. The cheapest accounting software among the services we reviewed is the free offering from Wave. The kind of accounting software a small business chooses to use depends on multiple factors. A freelancer or part-time consultant might need something basic or free, and a growing business might choose software that can be easily upgraded. QuickBooks is a popular choice because the company offers a wide range of products. Yes, QuickBooks is useful for many small businesses, particularly because it is scaleable. That means it can grow with your business. It can also integrate with third-party applications. Additionally, QuickBooks offers a 30-day free trial so you can test out the program to see if it fits your business's needs. For businesses that don't need to run a payroll, Wave is the easiest program to use. It allows service-based businesses to send simple invoices and pull reports to prepare a yearly tax return. Wave is also free and does not have transaction or billing limits. If you do want to add payroll services, it starts at $20 per month plus $6 per employee. A per transaction fee is charged for accepting payments as well. Yes, free accounting software is available, including Wave, which is featured here. Additional services offered by Wave, beyond essential small business accounting needs like payroll and credit card processing, come with fees. Yes, absolutely. You can choose an alternate accounting software, such as one of those we've reviewed here. Or you can roll your own spreadsheet-based accounting system using Excel or Google Sheets. You can set up a simple small business accounting system using Excel (or Google Sheets). Your system won't be as robust as QuickBooks (for example, your spreadsheets won't be able to connect with your bank to automatically pull transactions), but if your accounting needs are basic, a spreadsheet-based system can work. You'll find templates online to help you get started. Cloud-based accounting software systems like QuickBooks online aim to protect client data via multiple layers of data encryption and other resources. First, client data is encrypted during transmittal via SSL. Next, providers protect the data on their servers with encryption, firewalls, and other methods. We looked at 19 accounting software companies with specialized products for small businesses before choosing our top five software options. We considered cost, scalability, ease of use, reputation, and accounting features. Reputation was a key consideration because the longer a company has been around, the more likely that any technological glitches have been resolved, which ensures that a company’s important financial information will be reported accurately. Scalability was the next most important consideration because as a company grows, its accounting needs grow as well, and transferring financial information to new software can be tedious. Finally, ease of use and collaboration for business owners, employees, and accountants was considered because it’s important for all users to be able to access and review the financials at the same time. Updated by Lindsay Frankel A freelance writer with more than three years of researching and writing about personal loans, insurance, credit cards, and more, Lindsay's work has appeared on sites such as Insurify, Bankrate, and The Simple Dollar. Learn about our editorial policies Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. Intuit QuickBooks. "Plans for Every Kind of Business." Intuit. "About Intuit." Xero. "Pricing." Gusto. "Flexible Plans and Features. Honest Pricing. No Hidden Fees." FreshBooks. "Pricing." FreshBooks. "The FreshBooks Story." Wave. "Online Payments = On-Time Payments." Wave. "Payroll Software That Pays Off." Wave. "We Are Wave." PWC Bookkeeping Connect. "Five Benefits of Adopting Bookkeeping Software." Intuit QuickBooks. "Accounting Software Selection: 7 Factors to Consider for 2023." Oracle Netsuite. "How to Use Excel for Accounting (and When to Level Up)." QuickBooks. "Security Information."Best Accounting Software for Small Businesses for April 2024
Our Pick for Micro-Business Owners
Xero: Accounting Software Born In The Cloud
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Best Overall : QuickBooks Online
Best for Micro-Business Owners : Xero
Best for Service-Based Businesses : FreshBooks
Best for Part-Time Freelancers : QuickBooks Solopreneur
Best Free Software : Wave
The Bottom Line
Compare the Best Accounting Software for Small Businesses
Company Price Key Features Integrations Trial Offer QuickBooks Online Best Overall $30 (monthly) and up Scalable; widely used by accounting pros Yes; multiple Save 50% for 3 months or free 30-day trial Xero Best for Micro-Business Owners $15 (monthly) and up Feature-rich for smaller businesses at low cost Yes 90% off for 3 months FreshBooks Best for Service-Based Businesses $17 (monthly) and up Rich invoicing and proposal tools Yes 70% off for 4 months QuickBooks Solopreneur Best for Part-Time Freelancers $20 (monthly) Easily separates personal and business expenses; integrates with Intuit tax apps Yes Save 50% for 3 months or free 30-day trial Wave Best Free Software Free, or $16 monthly Feature-rich free accounting; payments processing for a fee Limited Free edition What Is Accounting Software for Small Business?
Why Use Accounting Software?
How to Choose the Best Accounting Software for Small Business
Essential Features of Accounting Software for Small Business
Alternatives to Small Business Accounting Software
Why You Should Trust Us
Frequently Asked Questions
How Much Does Accounting Software for Small Business Cost?
What Type of Accounting Is Best for Small Business?
Is QuickBooks for Small Business Worth It?
What Is the Easiest Accounting Program to Use?
Is There Any Free Accounting Software?
Can I Do Bookkeeping Without QuickBooks?
Can I Use Excel Instead of QuickBooks?
Is Accounting Software Secure?
How We Picked the Best Accounting Software for Small Business
Learn More About Small Business Accounting
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FAQs
What software do most companies use for accounting? ›
Top 10 Accounting Software for Enterprise Businesses
- NetSuite.
- Sage Intacct.
- BlackLine Financial Close Management.
- Microsoft Dynamics 365 Business Central.
- SAP ECC.
- SAP S/4HANA Cloud.
- SAP Business One.
- QuickBooks Online.
Best business software
- QuickBooks Online.
- Xero.
- Zoho Books.
- FreshBooks.
- Wave Accounting.
FreshBooks is one of the easiest accounting software to use. The software is designed for small business owners who don't have an accounting background. You can create and send invoices, track expenses, manage projects and clients, and view reports.
What software do small accounting firms use? ›Company
| Company | Price | Integrations |
|---|---|---|
| Xero Best for Micro-Business Owners | $15 (monthly) and up | Yes |
| FreshBooks Best for Service-Based Businesses | $17 (monthly) and up | Yes |
| QuickBooks Solopreneur Best for Part-Time Freelancers | $20 (monthly) | Yes |
| Wave Best Free Software | Free, or $16 monthly | Limited |
We recommend Melio for small businesses that are seeking user-friendly accounts payable tools without a lot of bells and whistles. It is excellent cloud-based software for managing invoices, receiving payments and managing bills. Melio also integrates with QuickBooks for free.
How much is QuickBooks per month? ›$30/month. Basic accounting tools on a single-user license. $60/month. All Simple Start features for up to three users, plus bill management and the ability to add employee time to invoices.
What is the best online accounting software for small business? ›Our Nerdy picks for
- Overall accounting software. QuickBooks Online. 5.0. NerdWallet Rating.
- Freelancers. FreshBooks. 4.5. NerdWallet Rating.
- Startup accounting software. Zoho Books. 4.5. NerdWallet Rating.
- Simple accounting software. Xero. 5.0. NerdWallet Rating.
Cash accounting method is ideal for small businesses which prefer a straightforward way to measure income and expenses. However, revenue won't appear on the ledger until the payment is received.
Can I do bookkeeping without QuickBooks? ›Zoho Books is our top QuickBooks alternative because of its scalability and mobile app functionality. Wave is second on our list as it has a free plan that provides sufficient support for businesses with basic bookkeeping needs.
What's easier to use than QuickBooks? ›7 Best QuickBooks Alternatives of 2024
- Zoho Books: Best for Zoho users.
- FreshBooks: Best for freelancers.
- Xero: Best for established businesses.
- QuickBooks Online: Best for accounting departments.
- Quicken: Best for managing expenses.
- NetSuite: Best for automating accounting.
Mar 23, 2024
Can I do my own accounting for my business? ›
So it's totally possible to do your own accounting, the tools are relatively basic and commonly available, and online learning resources abound. But is it worth it? What are the benefits to doing your own business bookkeeping and accounting other than simply because you can?
How do I choose an accounting software? ›What to consider when choosing accounting software
- Bank integration. Before you invest in accounting software, make sure it integrates with your bank. ...
- Your business needs. When you're evaluating accounting software, consider your business needs first. ...
- Your budget. ...
- Cloud-based software. ...
- Ease of use. ...
- Scalability.
Apr 9, 2024
FreshBooks offers a strong value overall, with plans between $17 and $55 per month, after a 30-day free trial. FreshBooks pricing plans start at $17 per month and go as high as $55 per month when billed monthly, though you can save 10% by opting for an annual bill.
What is the difference between QuickBooks and FreshBooks? ›While FreshBooks is easier to learn and utilize, QuickBooks is more comprehensive and offers more features for business owners to manage their companies better.
What software do accountants normally use? ›QuickBooks. A widely-used accounting software that offers comprehensive features for financial reporting, invoicing, and expense tracking, suitable for small to medium-sized businesses.
What is the software currently being used in accounting? ›Xero is an accounting software that most finance and accounting professionals are proficient in as it is cloud-based in nature and designed for small to medium-sized businesses. Because of its nature, it enables users to collaborate in real-time remotely which allows your team to work from anywhere at any time.
What kind of accounting do companies use? ›The three types of accounting include cost, managerial, and financial accounting. Although 3 methods of accounting are both vital to the healthy functioning of a business, they have different meanings and accomplish different goals. Let's dive into each of each below.
How do big companies do their accounting? ›Big companies often employ certified public accountants (CPAs) to ensure that their financial records are accurate and comply with accounting standards such as Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).