Best Accounting Software for Small Businesses

Last Updated November 8, 2023

As a small business owner, keeping up with finances can be a challenge, especially as your business grows and accounting gets increasingly complicated. But the importance of business accounting means you can’t just find a makeshift solution. Instead, the best business owners master the art of accounting. And for many, it’s mastered with the help of accounting software.

Maybe you started a successful business with little understanding of balance sheets, invoicing, or payroll management. Maybe you don’t have the working capital to hire a full-time (or part-time) finance manager. If this sounds familiar to you, don’t worry. The best accounting software will not only greatly assist you with these tasks but also streamline all of your accounting-related processes. Let’s take a look at some of the best accounting software options for small business owners.

Best Accounting Software for Small Businesses

It can feel overwhelming with so many options to choose from. However, based on extensive research and recommendations from reputable, expert sources, these are the top accounting software options you should look into utilizing for your small business.

Quickbooks

Probably the most recognizable name in the online accounting industry, Quickbooks is a powerful solution for most small to mid-sized businesses.

The best accounting software for small businesses must offer customizable tools to fit your business’s style and needs. Quickbooks offers just that—it prides itself on its scalability. Through integrations with other widely used services like PayPal, Square, and Shopify, it should fit seamlessly into your existing business tools. It allows you to run a variety of reports, upload and catalog receipts, track expenses and payroll, and send detailed invoices that can be paid online.

With plans starting at $30 per month, it remains an affordable solution as well. No, QuickBooks isn’t free like some other accounting software options, but it costs money for a good reason. What you pay for in terms of additional features, reliability, and 24/7 chat support will likely be well worth the investment.

If your business is looking for an all-around solution that pairs well with your existing technology and software, look no further than QuickBooks. What’s better? At the end of the year, you can easily pull tax information to use with Intuit TurboTax, making your life even easier.

Freshbooks

Freshbooks is an excellent option for simple online accounting assistance, particularly when it comes to anything and everything related to invoicing.

If your small business sends recurring invoices or operates on a subscription model, Freshbooks helps make that process as pain-free as possible through its automation and tracking options. Concerned that your customer may not have received your invoice? You can see the exact date, time, and location that your customer opened the invoice.

If you’re a freelancer or contractor billed hourly, Freshbooks will track your time, making invoicing easier and keeping your records up to date in case of a customer dispute over billed time. Freshbooks is a great solution for small businesses and freelancers who want a minimal-effort, yet sleek and powerful accounting platform. Plans start at $17/month, making it affordable for an entry-level package.

Zoho Books

With a competitive price point and a highly reputable service offering, Zoho Books is a great option for small business owners. It includes accounts receivable, accounts payable, and banking and inventory functionality, making it an all-encompassing finance solution.

Zoho Books offers six service tiers, from $0 to $275 per month. Zoho customers can also customize their account with additional users, auto-scanning of invoices, and snail mail. This increases flexibility but saves customers money should they not need each of these add-on features.

Overall, the UX is intuitive, and setup is easy; however, the interface is not quite as slick and advanced as its top competitors, and Zoho does not offer payroll services, unlike most major competitors. Zoho also caps its customers at 5,000 transactions per month, but this shouldn’t be a problem for small businesses, considering the average business sends about 500 invoices per month.

Xero

Xero, a cloud-based platform that offers unlimited users, advanced features, and numerous integrations, is becoming increasingly popular for microbusinesses. One of the reasons for this is that Xero allows unlimited users to access a single account, meaning that if you have several employees, you only need to pay for one account, and everybody has equal access to the software. This isn’t the case for most accounting software platforms. Plus, live bank feeds tend to make cataloging expenses far easier.

Xero is a fantastic accounting software option because they tailor elements of their product to small business owners. You can start with a 30-day free trial before opting in to one of their three plans: “early” ($15 per month), “growing” ($42 per month), or “established” ($78 per month).

Xero is sophisticated and now includes a project management platform that allows you to manage all accounting operations from one central location.

Best Free Accounting Software for Small Businesses

If you’re operating on a tight budget and can’t afford to invest in account software, there are free options available for small businesses.

Zoho

Zoho is perhaps the most reputable among these free options. It assists with business bookkeeping at no charge for businesses with turnover below $50,000 per year. While not as customizable as an option like Quickbooks, Zoho still offers many useful tools, such as a mobile application, invoice template customization, free customer support, and a fully integrated platform.

ZipBooks

Invoicing is the backbone of accounting, so finding accounting software that specializes in making your invoice process as efficient as possible is a good strategy.

ZipBooks is one of the best free software programs for invoicing. While a more basic option than many accounting software options, it’s a highly rated platform that will boost invoicing efficiency and reduce manual labor. Its free plan allows you to send and manage unlimited invoices, plus you can accept digital payments via the platform. Upgrading to its $15 per month plan will allow you to schedule future recurring payments thanks to its auto-bill feature.

There are several other free accounting software platforms you can choose from as well. Just remember, they are free for a reason. You may be better off investing a few hundred dollars per year in a platform like Quickbooks. Well-organized accounting practices are an essential component of optimizing cash flow management, which is one of the most important aspects of running a business.

In Summary

Whether you’re looking for a simple, easy-to-use tool that works for freelancers or a more elaborate, customizable tool meant for large organizations with numerous employees, this guide should help you make the best decision.

Remember, each platform has its advantages and disadvantages. Make sure that you chat with a customer service representative before committing to an online accounting solution. This will ensure that you exhaust all questions in advance, avoiding the need to change platforms in the future.

For more accounting tips, check out our year-end accounting checklist for businesses.

Grey Idol

Grey was previously the Director of Marketing for altLINE by The Southern Bank. With 10 years’ experience in digital marketing, content creation and small business operations, he helped businesses find the information they needed to make informed decisions about invoice factoring and A/R financing.