8 Best Accounting Software for Small Businesses in 2024 + How to Choose

Using accounting software is an excellent way to safeguard your small business’ finances. However, there are so many small business accounting software available today, and they have a significant overlap in terms of functionality, making it harder to decide.

To make an informed decision, you must look at which functionalities you need and consider which software offers the most support. This guide to the best accounting software for small businesses can help you, introducing you to the best options available today and helping you choose the one that fits your needs.

What is accounting software?

Before you can start comparing accounting software for small businesses, you need to understand what it is. A bookkeeping or accounting app for small businesses is a tool designed to help small businesses track their income and expenses.

Small business bookkeeping software allows entrepreneurs and small business owners to handle their company’s finances themselves instead of having to hire an accountant. For others, it simply reduces their reliance on an accountant, as they can handle more of the daily accounting needs themselves.

As a small business owner, you will have to assess your needs and then shop for the best accounting software for your company.

What are the benefits of accounting software?

An accounting app for small businesses can be an alternative to hiring an accountant or outsourcing accounting tasks. The software can also be useful for streamlining the workflows of in-house accounting teams. These are just some of the benefits of this type of small business bookkeeping software.

You will also get the following advantages:

1. Save time.

One of the biggest advantages of accounting software is its ability to save you time. The software automates various processes, saving you time that you would have spent reconciling statements, creating journal entries, and handling other repetitive or time-consuming tasks. In addition to all the time you will save, there is also a lower risk of manual errors. This helps you avoid more serious problems down the road.  

2. Lower costs.

The major appeal of small business accounting software is the ability to save money. To start, it is much more affordable than hiring an accountant.

But it can also save you money by ensuring that your company is compliant. The best accounting software for small businesses will handle reporting and tax preparation, letting your company remain compliant. That prevents you from facing fines or penalties from the IRS or other government agencies.

Small business bookkeeping software will also help prevent mistakes, thanks to its automation capabilities. After all, automated systems aren’t prone to mistakes, even when processing bulk amounts of data. This reduces the need to correct those mistakes or the time and money spent doing so.

3. Improve efficiency.

Given that accounting software saves time, it should go without saying that it also improves efficiency. But it can also improve efficiency in ways other than providing automation.

Some efficiency comes from the organization that the software gives you. The software will help you keep your transactions and financial records in a single platform and make them easy to find when you need them.

You will also get improved efficiency from cloud-based accounting software for small businesses. The ability to access your accounting data from anywhere and at any time saves the need to drive to your office to check or retrieve files. It also lets you check your financials while traveling or even on vacation.

Additionally, accounting software makes it easy to share your financial details with professionals such as creditors, loan officers, investors, and others. Having everything conveniently in one platform makes it easier to share relevant financial data with advisors as well.

It is important to remember that you will probably spend some time setting the software up and getting your business information on it. From there, all you have to do is continue updating the data on the platform.

8 Best Accounting Software for Small Business

Now that you know why you should be using accounting software for small businesses, it’s time to take a closer look at some top options. This will give you a starting point for your comparison, making it easier to choose the best accounting app for small businesses.

1. Xero

Xero is a popular option for growing businesses and those who want mobile functionality. The software emphasizes mobile utility and ease of use. You can use it on multiple devices and get real-time updates. As a business owner, you’ll be able to access real-time information no matter where you are.

Xero is also fully featured, with native and integrated capabilities for billing, invoicing, sales tax calculations, fixed asset management, expense tracking, and payroll. Conveniently, all plans get unlimited users and Hubdoc to automatically capture bills and receipts.

On the other hand, there is no phone support, and you can’t set up automatic reminders for your unpaid invoices. Additionally, if you use PayPal transactions, you may notice a payment processing lag. Xero has a 30-day free trial and then costs $12 a month.

2. QuickBooks

QuickBooks is possibly one of the best-known accounting software today, and it is also a favorite. In particular, QuickBooks Online is very accessible, as you can access your account from anywhere. You will appreciate the simple, clean interface, along with the intuitive reporting.

Every single subscription plan for QuickBooks Online will give you the ability to track expenses, income, and mileage. You will also get sales and tax reporting plus the ability to manage 1099 contractors. You can choose a plan with inventory tracking, a dedicated customer support manager, or up to 25 users. QuickBooks also comes with third-party app integration and double-entry accounting reports.

The only caveat is that some advanced features may take a little bit of practice to get the hang of. That being said, there are plenty of tutorials and resources online. QuickBooks Online starts at $15 a month, so it is also one of the more expensive options.

3. FreshBooks

FreshBooks has excellent customer support, perhaps the best support that you will get from any similar program. But that is just one way that the program stands out, as it also has an extensive selection of features that small business owners will find useful.

You will appreciate the back-office automation and smart technologies to reduce manual, repetitive tasks and the risk of human error. One example of this automatic tech is the ability to automatically reconcile the amounts in credit and debit. Another is the ability to import financial data automatically.

Use FreshBooks to access income statements, balance sheets, cash flow statements, and more. You can even adjust who can access which documents. You will have your choice of nearly every cloud accounting feature you may want, as well as mileage tracking and time-tracking on every single plan. Just keep in mind that you won’t get accountant access or bank reconciliation on every plan.

You can get a 30-day free trial of FreshBooks. From there, the most affordable plan is $4.50 a month.

4. Sage

Small businesses that want to customize their accounting software should consider Sage 50cloud. As the name implies, this software is cloud-based. In addition to the high level of customization, Sage also offers numerous advanced features, especially on higher-tier plans. It also integrates with Microsoft Office.

The least expensive plan, Pro Accounting, is specifically designed for small businesses. Use it for inventory tracking, invoicing, and expense management. Depending on the plan you choose, you can also add account management of multiple companies and role-based security privileges.

Keep in mind that there is no mobile app, the user interface is reportedly clunkier than others, and you can’t get time tracking. Pricing starts at $346 a year and there is no free trial, although demos are available.

5. Wave

If you are on a very tight budget and want free accounting software, consider Wave. Its free features make the app incredibly popular for startups and other small businesses.

Despite being free, Wave can do nearly everything paid programs can. You can use it for invoicing, payroll, banking reconciliation, and expense management. Additionally, you can create unlimited invoices and have unlimited users, complete with user permissions.

Just keep in mind that because it is free, there are no advanced accounting features. There are also no planned updates and minimal support. There is no phone support and the live chat is only available if you pay for Payroll or Payments.

6. Zoho Books

Zoho Books is a highly appealing option for those in search of mobile accounting. This is one of the few programs that give you almost full functionality via the mobile app. Overall, Zoho Books can facilitate inventory management, accounts payable, and accounts receivable processes. If you choose the top-tier plan, it can even handle multiple currencies.

Zoho Books is one of the more affordable options for small business accounting software, and there is even a free version available. However, you will have to pay if you want more users, project tracking, workflow automation, and other advanced features. You also won’t be able to track fixed assets such as equipment, real estate, or land.

Plans start at $15 per month and there is a 14-day free trial.

7. Kashoo

Consider Kashoo for accounting software that incorporates workflow automation. That is because this software helps you automate a lot of the behind-the-scenes administrative work. Additionally, it uses machine learning algorithms to better understand your business with increased use.

Kashoo will categorize receipts, track sales, and more. It will also analyze all the information you provide, and then make individualized recommendations so you can improve efficiency, minimize waste, and save money.

This software is also user-friendly, has great customer support, and supports unlimited users. However, you won’t find inventory management, time tracking, or many integrations.

Expect to pay $20 a month for Kashoo after the first year. The first year costs just $1 and you can get a 14-day free trial.

8. OneUp

When it comes to accounting software with a strong inventory management component, OneUp stands out from the competition. It automates routine tasks to improve your efficiency. One example of these tasks is how the program matches overdue invoices to individual bank transactions.

It also learns your accounting processes, thanks to its ability to analyze information like bank account transactions. OneUp suggests reconciliations and lets you validate them with a swipe. The app continues to learn as you validate reconciliations, so it gives you even more accurate suggestions next time.

OneUp is also simple to set up and has CRM functionality built in. However, you won’t find payroll or time-tracking. There is a 30-day free trial and plans start at $9 a month.

As your small business grows, you might want to consider moving up the platform’s pricing tiers. The OneUp subscription plan with unlimited users starts at $169 a month.

How to Choose the Best Accounting Software

With a better idea of the top accounting software, it’s time to look at how to choose the best one for your needs. Keep the following considerations in mind as you compare the software suggestions.

Integrations

You want to make sure the software you decide to work with can integrate with other platforms easily. The more integrations the software allows, the more flexible it will be. This will help you work through your accounting needs easily.

Cloud-Based

As a small business owner, you want to have ready access to your business’ accounting data. This is easily achieved with a cloud-based system. Accounting software that offers cloud-based tools allows you to access your data from any computer with an internet connection. This is especially useful for businesses with remote team members.

Mobile Access

The right accounting software provides you with mobile access to your accounting information, so you can access this on the go. When you run a small business, you need to be able to access your information even at home. This makes mobile access a critical factor in your decision process.

Usability

Is the software easy to use? If you have questions, can you find support quickly? These are factors you should consider as you decide which accounting software to use for your small business.

Most software will have the option for you to test the system out at no charge. Make sure to get a good idea of the kind of support the software offers. Move through as many tools as you can to find out if the application’s features meet your business needs.

Use Accounting Software for Your Small Businesses

Use a text-to-pay solution, such as Podium, that allows you to provide estimates and collect payment all via text, without ever leaving the platform. Integrate Podium with accounting software including QuickBooks Online so all customer communication, payments, and book-keeping happens in a single platform.