Best Accounting Software for Small Businesses

Last Updated on December 14, 2021

As a small business, keeping up with finances can be a nightmare, especially as the business grows and things get more complicated. Not all of us were born with a love of numbers, and cash flow management is tough!

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 – that’s okay. Instead, you’ll need to rely on some sort of online accounting software to help you stay on top of your money.

How to Choose Your Online Accounting Software

With so many platforms to choose from, this article aims to help you evaluate your options and determine which is best for your business. While the list below is certainly not all-encompassing – it does help narrow down your options based on our expert opinion.

Intuit QuickBooks | Best Overall

Probably the most recognizable name in the online accounting industry, Quickbooks is a powerful solution for most SMBs (small-to-medium sized businesses). With tons of integrations with other widely-used services like PayPal, Square and Shopify, it seamlessly fits into your existing online efforts. It also 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 ranging from $10 – $65/month, there’s an affordable solution for you. No, QuickBooks isn’t free like some other accounting software out there – but you get what you pay for in terms of additional features, reliability and 24/7 chat support.

If your business is looking for an all-around solution that pairs well with your existing technology/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.

Interested in learning more? Visit the Intuit QuickBooks site today.

Freshbooks | Best for Freelancers

For freelancers or sole proprietors, Freshbooks is an excellent option for easy online accounting and invoicing. For businesses that send recurring invoices, or operate on a subscription model, Freshbooks helps make that process as pain-free as possible with automation and tracking. 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.

For freelancers that bill 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. With a refreshingly simple and intuitive UX and mobile app, Freshbooks is a great solution for small businesses and freelancers who want a low-touch, yet sleek and powerful accounting platform. Plans start at $15/month, making it affordable at an entry-level package.

Interested in learning more? Visit the Freshbooks site today.

Zoho Books | Best for Live Support

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

Zoho Books offers three service tiers – Basic, Standard and Professional – from $9 – $29/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, we find that the interface is not quite as slick as it’s top competitors. Zoho also caps its customers at 5,000 transactions per month – making this not the best solution for medium-sized businesses. Additionally, Zoho does not offer payroll services, unlike most big competitors.

Interested in learning more? Visit the Zoho Books site today.

Xero | Best for Larger Businesses

A cloud-based platform that offers unlimited users, advanced features and numerous integrations, Xero is quickly becoming the top choice for larger businesses who need a flexible, yet powerful accounting solution.

Xero is sophisticated, and now even includes a project management platform that allows you to manage all accounting operations from one central location. However, as a larger enterprise solution, Xero is more expensive than its competitors. Each plan includes unlimited users (something that most other platforms don’t offer) and live bank feeds to make cataloging of expenses far easier.

However, over the past couple years, customers have complained about declining customer support and increasing fees. Along with the increased fees, Xero no longer offers payroll as a standard included feature on all plans.

Interested in learning more? Visit the Xero site today.

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.