As a small business owner, managing your business accounting—including everything from bookkeeping to tax preparation—is one of the most important aspects of your operations. But while these business accounting tasks are essential, they’re also complex and time-consuming, especially if you’re performing them manually.
One of the best actions you can take as a business owner is to automate, if not entirely outsource, your business accounting processes. This is where small business accounting software comes in. Choosing and utilizing the right business accounting software can help you automate your books, manage your finances, and ultimately reduce errors, save time, and contribute to your business’s growth and success.
If you’re wondering how to decide what is the best accounting software for your small business, we’re here to help. With all of the business accounting software options out there, there is no doubt you’ll be able to find a solution that meets your needs.
Therefore, to help you through this process, we’ll explain what you should look for when searching for small business accounting software, as well as discuss eight of the best business accounting solutions on the market.
As we’ll soon discuss, there are numerous options out there when you’re trying to choose the best accounting software for your small business. Therefore, before we explore some of the top business accounting software solutions, it’s important to break down the process: How do you find the best small business accounting software? How do you compare your different options?
Let’s start by answering the first question.
In order to find the best accounting software for your small business, you’ll want to follow a few steps:
Before you can decide which small business accounting software is best, you’ll want to determine what you need from any given solution. What are you looking for this business accounting software to do?
More than likely, you want a small business accounting software that can help you manage your finances and perform general bookkeeping and accounting operations. Of course, most business accounting software solutions will fulfill this purpose.
Therefore, you’ll want to be more specific. You’ll want to decide what specific features you’re looking for in a small business accounting software: Do you simply want to be able to manage your expenses and invoices or do you need additional tools for handling tasks like inventory or payroll? Would you prefer a web-based solution or local, desktop option?
You’ll want to think about your small business accounting software needs with both a narrow and wide lens—this way, as you explore the various solutions that are out there, you’ll have a better sense of what will and won’t work for your business.
After you’ve identified your needs and decided exactly what you’re looking for from your small business accounting software, you’ll then want to determine your budget.
Price can play an influential role in your small business accounting software search, and therefore, you’ll want to decide early on what you can afford.
Additionally, since various small business accounting software solutions will have different pricing structures, you’ll want to consider what kind of monthly or annual fee you’re willing to pay, or if you need to look for free accounting software options.
Moreover, you’ll want to decide if you’re willing to pay for add-ons to extend the functionality of your small business accounting software, or if you’d rather look for a solution that includes greater built-in capabilities.
At the end of the day, it may be difficult to meet your budget exactly, but you’ll want to have a price range in mind as you go through the search process to find the best accounting software for your small business.
Now that you’ve identified your business accounting needs and budget, you’re ready to start your search—and we’re ready to answer the question we posed earlier: How do you compare your options?
As you explore the different small business accounting software solutions on the market, the right one for you will be the one that can best meet your requirements as you’ve outlined them.
Therefore, to determine which small business accounting software solution is the best for you, you’ll want to compare your options based on qualifications such as:
Now that we’ve explored the process of how to find the best accounting software for small business, let’s discuss some of the top options on the market. Although ultimately, the right small business accounting software for you will be the one that can most wholly fulfill your specific business needs, each of these solutions is worth considering.
That said, here are eight of the best small business accounting software options:
QuickBooks Desktop has been serving small businesses since the 1990s, and nevertheless, continues to stand out as one of the best small business accounting software options on the market.
Designed to be simple enough for any business owner to use, QuickBooks is a program that most accountants are familiar with. Moreover, because of this popularity, a variety of apps—including Square, TurboTax, and Concur—can integrate with QuickBooks.
Although QuickBooks offers online software options in addition to their desktop products, QuickBooks Desktop is still the preferred solution for many businesses, especially those that want a local software and need inventory tracking systems.
Let’s explore the various versions of QuickBooks Desktop including both Pro and Premier and discuss what these small business accounting software products have to offer.
Although QuickBooks Pro is the simplest version of QuickBooks Desktop, it’s still one of the most robust and powerful small business accounting software solutions out there.
QuickBooks Pro is offered in two plan offerings: Pro and Pro Plus.
Let’s dive into the details.
QuickBooks Pro is available for a one-time payment of $399.99. QuickBooks Pro Plus, on the other hand, requires an annual subscription, costing $299.99 per year.
Additionally, QuickBooks offers a cloud-hosting service option for Pro Plus, available by contacting QuickBooks directly.
With the QuickBooks Pro business accounting software, you’ll receive the full range of capabilities you need to automate and manage your accounting processes, including:
In fact, these are just some of the numerous features offered within QuickBooks Pro.
Moreover, when it comes to QuickBooks Pro Plus, this option will include all of the functionality of Pro, as well as unlimited customer support, automated data back-up and recovery, and easy software upgrades.
With all of the accounting features QuickBooks Pro can offer, including those beyond our list above, QuickBooks Desktop Pro is one of the most robust small business accounting software options available.
Additionally, with a wide network of QuickBooks Pro Advisors and experts, as well as the legacy of the QuickBooks brand, you’ll easily be able to find assistance for your bookkeeping and accounting tasks if necessary.
Moreover, with several tools specific to inventory management, QuickBooks Pro is a great solution for product-based businesses.
However, as QuickBooks Pro is first and foremost a local, desktop solution, you might instead consider a web-based option (many of which we’ll discuss shortly) if you want more mobility and flexibility from your business accounting software.
Conversely, if you like everything QuickBooks Pro has to offer, but feel you could benefit from even greater built-in functionality, you might then look into the next QuickBooks Desktop product, Premier.
When comparing QuickBooks Pro vs. Premier, you’ll find that the two are very similar, but ultimately, Premier can provide more features for inventory management, job costing, and pricing—at an associated cost.
Let’s take a closer look at what QuickBooks Premier has to offer for your small business accounting software needs.
QuickBooks Premier, like QuickBooks Pro, has two plan options: Premier and Premier Plus.
For QuickBooks Premier, you’ll have to pay a one-time cost of $649.99. Premier Plus, on the other hand, will require an annual subscription of $499.99.
The QuickBooks Premier business accounting software offers additional capabilities beyond the Pro plans, such as:
Furthermore, QuickBooks Premier provides industry-specific tools for contractors, manufacturing and wholesale, nonprofits, professional services, and retail businesses.
If you opt for the Premier Plus version of this desktop product, you’ll receive unlimited customer support, automated data back-up and recovery, and easy software upgrades, on top of all of the features of Premier.
Considering the information we’ve explored, you may be wondering how to decide whether QuickBooks Pro or Premier would be the better small business accounting software for your business?
Although these two QuickBooks products are indeed very similar, the differences are important. You would choose QuickBooks Premier as opposed to Pro if you needed the additional functionality it offers with its higher price point. For example, Premier allows you to track backorders, access a sales order fulfillment worksheet, and offers availability tracking. If these features (or other Premier capabilities) will impact and benefit your business, then it may be worth choosing Premier as your small business accounting software.
However, both QuickBooks Pro and Premier have their downsides, and therefore, are not right for every small business. Although these QuickBooks Desktop products are some of the most robust small business accounting software options on the market, they also have a high cost, require local hosting, and limit your account users. Therefore, if you want more mobility, simplicity, and flexibility from your small business accounting software, you might try another option on our list.
Moreover, although not typically the best solution for most small businesses due to the cost and extensive feature set, it’s worth mentioning that QuickBooks does provide a third Desktop product, QuickBooks Enterprise, for those who need even more than what Premier offers.
If you’re looking for a small business accounting software with greater flexibility and mobility, you might consider QuickBooks Online.
Unlike QuickBooks Desktop, QuickBooks Online is a web-based software, meaning you can access the platform anywhere you have internet access. Therefore, as a solution that combines the tried-and-true capabilities of QuickBooks Desktop with the flexibility that many small businesses require, it’s not surprising that QuickBooks Online is one of the most popular small business accounting software options on the market.
Plus, QuickBooks Online offers more affordable monthly pricing, as well as a number of different plan options to choose from, enabling you to customize their service to your business’s needs.
This being said, let’s break down each of the QuickBooks Online solutions to see what these small business accounting software solutions can offer your small business.
The most basic version of the QuickBooks Online business accounting software is Simple Start. Providing straightforward and simple accounting functionality, this option is best suited for very small businesses, like sole proprietorships.
QuickBooks Simple Start will cost $25 per month for one user.
The QuickBooks Simple Start plan will allow you to:
The next QuickBooks Online option is the Essentials plan.
Although you can certainly manage your small business accounting needs with the Simple Start plan, Essentials can accommodate slightly bigger small businesses with up to three users and added features for time tracking and bill management.
As a step up from Simple Start, QuickBooks Online Essentials will cost $50 per month.
For this price increase, QuickBooks Online Essentials will give you additional capabilities, including:
The third QuickBooks Online plan, Plus, accommodates small businesses who want to expand their business accounting software even further—giving them the ability to manage projects, inventory, and add more users on top of basic bookkeeping and accounting.
This small business accounting software will cost $80 per month.
QuickBooks Online Plus includes all of the features of Simple Start and Essentials, plus:
The last QuickBooks Online option is the Advanced plan. With the most functionality of any of the four plans—as well as the highest cost—this plan is well-suited for larger small businesses who want to be able to manage multiple business processes within their business accounting software and truly automate and streamline their operations.
The QuickBooks Online Advanced plan will cost $180 per month, making it one of the most expensive (but also most feature-rich) web-based small business accounting software solutions.
Although the Advanced plan is pricey, it offers significant functionality. This small business accounting software includes all of the features of the first three QuickBooks Online plans, as well as:
With all of the plans QuickBooks Online offers—and their range of capabilities and price points—this small business accounting software can accommodate a wide range of small businesses.
Regardless of which plan you choose, QuickBooks Online provides essential accounting features, reliability, flexibility, customer support, and a platform that’s fairly simple and easy to learn.
As we mentioned earlier, when comparing QuickBooks Online vs. Desktop, you’ll find that the Desktop products offer more capabilities; however, many business owners still choose to use QuickBooks Online due to the system’s accessibility and usability.
Therefore, if you’re looking for a small business accounting software that will truly help you manage your accounting and tangential business processes, there’s no doubt you should consider QuickBooks Online.
The next small business accounting software on our list is FreshBooks.
FreshBooks is a cloud-based business accounting software known for their excellent customer service, intuitive interface, and ease of mobile use.
With FreshBooks, you can choose from three different service plans, each of which is fully accessible on your mobile device. FreshBooks offers essential accounting and tangential capabilities—not to mention, live phone and email customer support with all of their plans. For a limited time, FreshBooks is offering 60% off for 6 months on Lite, Plus, and Premium plans when new users skip the 30-day free trial period and opt to buy now.
With FreshBooks, you can choose from three small business accounting software plans: Lite, Plus, and Premium.
The Lite plan, best for very small businesses, costs $15 per month and handles up to five active clients.
The Plus plan is FreshBooks’ most popular offering, handles up to 50 clients, and costs $25 per month.
Finally, the last business accounting software plan from FreshBooks is Premium, which costs $50 per month and accommodates up to 500 clients. This plan is well-suited for larger small businesses and those that are growing quickly.
Although FreshBooks emphasizes their simplicity and ease of use, this small business accounting software isn’t lacking in functionality.
Each of the FreshBooks products allows you to:
If you opt for the FreshBooks Plus or Premium plan, you’ll receive additional features for invoicing, reporting, payment reminders, and proposals.
So, what makes FreshBooks one of the best small business accounting software options?
FreshBooks offers powerful accounting features—and with no limitations on your number of invoices, expense entries, time tracking or estimates in any of their plans, you have significant flexibility. You are, however, limited based on the number of clients.
Additionally, for business owners on the go, FreshBooks offers one of the most mobile-friendly small business accounting software solutions with the ability to use the platform from your device’s browser, as well as by downloading the FreshBooks accounting app.
Therefore, FreshBooks is a great option for business owners who need mobility, a simple platform, and core accounting tools to automate operations. However, if you need more robust tools for managing inventory, there’s probably an alternative small business accounting software that will better fulfill those needs.
If you’re looking for the robust functionality of QuickBooks with the simplicity and mobile-friendliness of FreshBooks, you might consider the next small business accounting software on our list, Xero accounting.
Originally launched in New Zealand and widely used in Australia and the U.K., Xero has expanded into the U.S. and grown quickly—becoming one of the biggest competitors to QuickBooks Online.
Therefore, with a feature set that’s very similar to QuickBooks, Xero is a great QuickBooks alternative for those who are looking for a more intuitive and user-friendly business accounting software.
Xero offers their web-based business accounting software in three plans.
The most basic plan, Early, costs $11 per month and can accommodate five invoices and quotes, five bills, and 20 bank transactions.
The second plan, Growing, costs $32 per month and places no limits on your invoices, bills, or bank transactions.
The last plan, Established, costs $62 per month, and has the most functionality—with the ability to handle multiple currencies, as well as manage both expenses and projects.
As we mentioned, if you compare Xero vs. QuickBooks Online, the two actually have very comparable feature sets.
However, here are some of the most notable capabilities Xero can offer:
Moreover, Xero allows unlimited users access to your account at no additional cost—a distinguishing feature compared to other business accounting software options.
Is Xero’s small business accounting software right for you? When you compare this solution to competitors, Xero vs. Sage, for example, you’ll find that Xero’s strength is a balance of power and price.
Xero offers a thorough suite of accounting features, as well as an approachable, intuitive platform, for a fairly reasonable cost. If you want to be able to quickly and easily set up your business accounting software platform and manage your bookkeeping and accounting tasks, there’s no doubt that Xero will allow you to do so.
Although Xero may not have the same legacy and familiarity as QuickBooks, this solution still stands out among the best accounting software for small businesses.
When it comes to small business accounting software, there are very few truly free options out there. Wave, however, is one of them. Plus, not only is Wave accounting free, but they also offer strong accounting and invoice tools, as well as a large customer service network—making them a great solution for newer and smaller businesses.
Let’s explore the details of this free small business accounting software.
As we mentioned, perhaps the most notable feature of the Wave business accounting software is that it’s completely free.
You can use Wave wherever you have internet access and do not need to provide a credit card to sign up for your account.
This being said, Wave offers core accounting features such as:
Additionally, although you can utilize Wave’s business accounting software for no cost, you can also choose to expand your functionality with their Payments and Payroll paid add-ons.
The Payments add-on will allow you to accept credit cards and bank payments online. As a pay-as-you-go tool, you’ll only pay the 2.9% + $0.30 fee for credit cards and a 1% fee for bank transfers when you actually accept a payment.
The Payroll add-on, on the other hand, will allow you to pay employees and contractors, as well as manage your payroll taxes, connecting directly to your Wave account. Depending on where your business is located, Wave Payroll will cost $20 per month, plus $4 per employee per month, or $35 per month, with the same per-employee fee.
Wave is, without a doubt, the best accounting software for small businesses who are looking for a free solution.
With Wave’s core accounting and invoicing capabilities, this small business accounting software is a great option for smaller businesses, sole proprietors, and anyone who wants to automate their bookkeeping and accounting without feeling overwhelmed by their platform and its features.
At the end of the day, as a free and simple software, Wave has significant functionality to offer, and even more if you pay for either of their add-on options. Of course, Wave does have limitations—and if you need greater capabilities from your business accounting platform, you’ll certainly find more features from alternatives like QuickBooks, FreshBooks, or Xero.
The next option on our list of best accounting software for small businesses is Zoho Books. With plans ranging from $0 to $70 per month, this is one of the most affordable—yet still robust—small business accounting software solutions out there.
Therefore, Zoho Books is a great option for smaller businesses on a budget, who don’t quite need the features of QuickBooks or Xero but want a flexible solution to help automate their business accounting.
Similar to Wave, Zoho Books offers a strong and easy-to-use web-based accounting and invoicing platform.
Zoho Books has four plan offerings: Free, Standard, Professional, and Premium.
The Free plan is available for businesses with an annual revenue less than $50,000. This plan includes one user and one accountant, as well as standard features such as invoicing, estimates, client management, expenses, bank reconciliation, and more.
The Standard plan costs $20 per month, allows three users, and includes additional features such as project expense tracking, bulk updates, transaction locking, reporting tags, and custom views.
Next, the Professional plan costs $50 per month, accommodates five users, and allows 10 automated workflows. This plan also offers sales features like purchase orders, multi-currency handing, stock tracking, time tracking and billing, project profitability, price lists, and more.
The last plan, the Premium plan, costs $70 per month, and includes all of the features of the previous plans, and gives you the ability to add 10 users. This plan also offers advanced functionalities for budgeting, validation rules, workflow rules, among other tools.
With all of the Zoho Books plans, you’ll receive the following features:
With some of the most affordable plan offerings, in addition to solid bookkeeping and accounting features, Zoho Books is one of the best business accounting software solutions for smaller businesses, as well as a great nonprofit accounting software option.
Although perhaps not as intuitive as some competitors, there’s no doubt that Zoho Books will help you get your small business accounting tasks done.
However, compared to other options, Zoho Books may not have as many third-party integrations, nor does it offer payroll capabilities. Therefore, if you’re a small business with many employees and want to bundle your payroll and accounting software, you may find another small business accounting software solution will better fulfill your needs.
Like QuickBooks, Sage is one of the business accounting software solutions that offers the most options for small businesses. With Sage software, you can choose from two cloud-based systems, as well as three more traditional options with Sage 50cloud—a desktop business accounting software with remote access capabilities.
With all of these products, Sage can fit the accounting needs and budget of a full range of small businesses.
Let’s dive into the details.
With various options in the Sage business accounting software suite, you’ll see a range of different prices, depending on the specific type of product.
For the web-based solutions in the Sage Business Cloud, you can choose from two different plans: Accounting Start and Accounting.
The Accounting Start plan will cost $10 per month, whereas the Accounting plan will cost $25 per month.
With the Sage 50cloud accounting options, on the other hand, you’ll be able to purchase your business accounting software on an annual or monthly basis. The three plans, therefore, are priced as such:
With such a wide range of business accounting software products, the features you will have access to will largely depend on the Sage solution you choose.
That said, for the most basic business cloud option, Accounting Start, you’ll be able to:
With the Accounting business cloud plan, you’ll have access to additional features:
Both of these small business accounting software options are simple and straightforward, offering the most basic functions to help you manage your processes.
With any of the desktop Sage 50 plans, on the other hand, you’ll receive more advanced capabilities, including accounting tools to manage billing, expenses, inventory, and more.
As we mentioned, with a wide range of options—each with varying capabilities and price points—Sage can accommodate small businesses of all shapes and sizes.
However, with the basic functionality of their web-based products, these particular small business accounting software options are probably best suited for very small businesses and sole proprietors.
The Sage 50 solutions, on the other hand, have the ability to better accommodate larger and growing small businesses, as well as those who generally prefer a desktop-based product (which also makes Sage a great QuickBooks alternative).
On the whole, though, with all of these options—and their ability to fulfill various accounting needs—Sage is one of the best small business accounting software options in terms of scalability. There’s no doubt that Sage will allow you to upgrade and expand your business accounting software as your operations grow.
Finally, we’ve reached the last option on our list of best accounting software for small businesses: Bonsai accounting.
Although many of the other small business accounting solutions on the market can accommodate freelancers and self-employed entrepreneurs, the Bonsai software was designed for these business owners in particular.
Therefore, Bonsai is a great self-employed accounting software option—with the ability to meet the unique bookkeeping, accounting, and general business needs of freelancers and contractors.
Let’s explore what Bonsai has to offer.
With the Bonsai small business accounting software, you have two plan options to choose from.
The first plan, Bonsai Plus, costs $16 per month when paid annually. The second plan, Bonsai Premium, costs $24 per month when paid annually.
Bonsai Premium also gives you the ability to add multiple users for an additional $9 per user per month.
As we mentioned, the features included with the Bonsai small business accounting software are designed to cater to the needs of contractors and freelancers.
Therefore, the Bonsai Plus plan includes:
With the Bonsai Premium business accounting software, you’ll receive all of the capabilities of Plus, as well as:
Designed for freelancers and contractors, Bonsai is one of the best business accounting software options for self-employed entrepreneurs with these kinds of specific needs.
Whereas these professionals may find other small business accounting solutions overwhelming and containing tools they don’t necessarily need, Bonsai provides a simple, intuitive, and catered freelancer accounting software at an affordable cost.
However, while Bonsai is a great solution for their target demographic, they probably won’t fulfill the bookkeeping and accounting needs of other types of small businesses.
After exploring all of our best small business accounting software options, perhaps you’ve realized they all offer more than you need. If you’re looking for a simpler system to manage your small business finances, then you might actually be searching for bookkeeping software, as opposed to small business accounting software.
Although subtle, there is, in fact, a difference between bookkeeping vs. accounting. Bookkeeping more generally concerns the day-to-day managing of your finances—recording transactions, reconciling bank statements, etc. Accounting, on the other hand, deals with greater insight and supervision—taking bookkeeping records and using them for strategic financial planning and growth.
Therefore, if your business needs are more bookkeeping-specific, you may consider an online bookkeeping software instead.
Although many of the small business accounting software options we’ve discussed include bookkeeping capabilities, you may find that a solution designed particularly for bookkeeping will be easier, more effective, and more affordable for your business.
This being said, like small business accounting software, there are a number of online bookkeeping services to choose from. For one solution that’s most comparable to the accounting software options on our list, you may consider Bench.
Let’s explore the details.
Like the business accounting software solutions we’ve explored, Bench offers a simple, web-based bookkeeping software for small businesses.
With Bench, however, you also receive a dedicated bookkeeping team to handle your business’s monthly books. You’ll use the Bench software to communicate with and collaborate with your team, who will categorize your transactions, deliver financial statements, and track the whole of your business finances.
Bench will also help you prepare your business taxes and file them on your behalf. You can connect Bench to your bank, as well as other business tools, and access the Bench platform from your computer or mobile device.
To access Bench’s bookkeeping services, you can choose from three different plan options:
As you can see, compared to the various small business accounting software solutions on our list, Bench offers a simpler service—and one specific to bookkeeping tasks.
Therefore, if you’re looking for a way to outsource your bookkeeping—and don’t need the capabilities of a business accounting software—you may consider a service like Bench.
With personalized attention to your business’s bookkeeping, as well as an intuitive online interface, Bench can accommodate a variety of small businesses.
On the other hand, however, with the monthly cost of Bench and other virtual bookkeeping services, you may find that a basic and user-friendly small business accounting software, like Wave, may also fulfill your needs.
When it comes to choosing the best small business accounting software for your needs, there are many factors to consider. As we’ve seen through discussing the eight best small business accounting software options on our list, each solution has unique features, plans, pricing—and ultimately, can accommodate different kinds of small businesses.
Therefore, the best small business accounting software for you will depend wholly on your specific needs and budget.
If you’re a smaller business with basic accounting needs, you may be well-suited for a business accounting software like Wave or Zoho Books. On the other hand, if you need more from your small business accounting software—tools for inventory, invoicing, expenses, and more—you might consider options like QuickBooks, FreshBooks, or Xero.
At the end of the day, however, you know your business best, so the decision is up to you. Although on the whole, business accounting—and choosing the right software—may seem difficult and time-consuming, these tasks are crucial to your operations. Moreover, by taking the time to find the best small business accounting software (and investing in the solution you choose), you’ll be able to automate your processes—and therefore, promote your business’s financial growth and success in the long run.
Meredith Wood is the founding editor of the Fundera Ledger and a vice president at Fundera.
Meredith launched the Fundera Ledger in 2014. She has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending and financial management.
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