Best Accounting Software for Small Businesses
You’ve started a small business, you’re full of creative ideas, and you have customers lining up to work with you. You’re ready to face the world of entrepreneurship, but there’s one thing standing in your way: accounting.
Let’s be honest, most people don’t start a business because of the accounting. It can be a real drag to stay on top of every single expense and track your invoices perfectly. But while accounting is here to stay, cloud-based software has made it infinitely easier to stay on top of your books.
Here are some of the best accounting apps for small businesses on the market today. They’re all easy to use and budget-friendly, freeing up your time and keeping life simple when tax time swings around.
1. Xero – beautiful accounting software
Pricing: starts at $9/month, but most features are available from $30/month.
There’s one thing that many Xero customers will tell you: it manages to make accounting enjoyable. Xero’s goal is to provide “beautiful accounting software” – and they deliver.
It’s an extremely user-friendly accounting software to navigate, and once you’ve set up your automatic bank feeds you’re good to go. It can take a while to get your head around the Chart of Accounts to correctly reconcile transactions, but this often comes down to your individual business and your accountant’s preferences if you have one.
We love Xero’s new Business Snapshot and Cash Flow pages that offer an instant view of income, expenses, profit margin and forecasted cash flow. Xero is a fantastic small business accounting software to get started with early on and stay with as you grow.
Popular features
- Business Snapshot reporting
- Multi-currency invoices
- Built-in payroll
- Bank reconciliation with instant feeds for many partners, including TransferWise
2. QuickBooks Online – the US market leader for cloud accounting
Pricing: starts at $25/month.
QuickBooks is the accounting software giant, especially in North America. Some people still associate the brand name with desktop versions of the software, but QuickBooks Online is cloud-based and extremely user-friendly.
It’s easy for small businesses and freelancers to quickly send out invoice links, receive payments by credit card, and tick every other box to coordinate their finances.
As it’s such a popular software, there’s a huge range of bank integrations to ensure an instant bank feed for easy reconciliation. With Quickbooks Point of Sale, ecommerce stores can also integrate their shop with contactless payments and multichannel inventory management.
Popular features
- Inventory tracking
- Mobile app
- Super simple invoicing
- Time tracking
3. FreshBooks – popular accounting software for freelancers and creatives
Pricing: starts at $15/month.
FreshBooks is another perfect fit for small businesses. It’s a great choice for entrepreneurs and small teams, especially for service and creative industries.
It’s simpler than alternatives like Xero and QuickBooks, which can be a downside if you want more customization, but positive if you want a straightforward accounting solution.
FreshBooks stands out from better-known competitors with features such as built-in time tracking that’s available with every plan, plus an engaging dashboard to give you a simple and quick glance of performance.
You also get unlimited invoices, estimates and expenses with all FreshBooks plans, starting from $15/month. This is different from alternatives like Xero that are very limited at the lowest price point.
Popular features
- Unlimited invoices, estimates and expenses on all plans
- Built-in time tracking on all plans
- Straightforward feature set and user experience
4. Sage Business Cloud Accounting – professional cloud-accounting to fit any budget
Pricing: starts at $10/month.
Sage has a reputation for being extremely reliable, especially via its ERP solutions. However, it also has a popular cloud-based accounting software that’s a perfect fit for many small businesses.
Sage Business Cloud Accounting, previously Sage One, offers everything a small business needs to stay on top of accounting.
Their product is especially popular with traditional small businesses that are choosing their first cloud-based accounting software. The brand doesn’t have the same lighthearted fun feel as FreshBooks or minimalist beauty as Xero, but it’s reliable, professional and straightforward. And there’s much to love about that.
Popular features
- Manage inventory
- Invoice in multiple currencies
- Advanced and real-time reporting
5. Wave – a free accounting platform for freelancers and small businesses
Pricing: Wave Accounting is free, although there are charges per transactions, payroll and expert support.
Wave stands out from the other accounting systems on this list with a tempting selling point: it’s free.
You can sign up without a credit card to get instant access to the accounting platform, including unlimited invoicing and receipt scanning, which is a major advantage for very small businesses and freelancers who are just starting out.
The disadvantage is that Wave lacks complexity and customization, which is fine for many freelancers and small digital agencies, but more problematic for more established small businesses.
Wave also focuses heavily on the US and Canada, so if you’re outside North America you’ll struggle to set up instant bank feeds and keep your accounting and tax reporting efficient and in line with local regulations.
Popular features
- Free and unlimited
- Free accounting, invoicing and receipts
- Run multiple businesses in one account
- Fully functional double-entry system to be tax-ready for year-end
6. Zoho Books – the straightforward accounting solution from Zoho
Pricing: starts at $9/month.
Zoho Books is another budget-friendly choice. Although it’s not free like Wave, it starts at a very accessible price.
The product is part of the Zoho family alongside other popular platforms such as Zoho CRM, Zoho Mail and Zoho Projects. Zoho offers seamless integrations between their products, which is a big benefit if you’re already using others.
Zoho Books is a bit clunkier than alternatives such as Xero and Sage, but its clear focus on small businesses comes through in its simplicity and straightforward feature set.
Popular features
- Automated workflows
- Budgeting
- Zoho Sign Integration
- Projects and timesheets
7. FreeAgent – a fast-growing accounting system that’s born and bred in Europe
Pricing: starts at $12/month for 6 months, then $24/month.
Scotland-based FreeAgent has quickly evolved into one of the most popular accounting platforms in Europe over the last few years.
FreeAgent is extremely simple to get up and running with, making it an excellent choice for new business owners or those who want to switch to a more straightforward system. There’s everything you need to manage your accounting online, and its handling of multi-currency invoices stands out from even top players like Xero and QuickBooks.
There’s only one price plan, so you get unlimited everything as soon as you sign up. Also, when you can pay upfront you get six months for half price, which is a great way to check if the software suits you before committing long-term.
Popular features
- Unlimited everything
- Multi-currency invoices
- Sales tax reporting for the US, Europe, or UK
- Award-winning support
