Most small businesses need accounting software to track their finances efficiently. Spreadsheet accounting can be cumbersome and time-consuming.
Below are the top solutions for small businesses, selected after analyzing more than 30 data points for each contender to ensure they have critical features such as:
1. Free trial or free plan: It’s essential to test accounting software before committing to it. Take advantage of free trials and plans to familiarize yourself with the product’s user interface.
2. Reconciliation tools: Reconciliation is crucial in accounting, and all the picks help match bank transactions to accounting entries.
3. Invoicing: All picks allow for easy invoicing and online payment options for clients.
4. Key financial reports: Essential financial reports like the balance sheet and profit and loss statement are included in all choices.
5. Mobile app: Accessing your books from anywhere can provide peace of mind, as most accounting apps offer business insights, invoicing, and expense receipt tracking.
While these capabilities are critical for most small businesses, the best choice depends on factors like business size, complexity, and industry. Consider cost, integrations, and user interface when making a decision. It’s also advisable to consult with your accountant or bookkeeper before finalizing a choice.
Here are some of the best accounting software products for small businesses and their standout features:
1. Xero: Best for ease of use
2. Zoho Books: Best for all-in-one business software suite
3. Wave: Best for free, unlimited invoicing
For most small businesses, QuickBooks Online is the top choice due to its industry-standard status and versatility. It can support various business sizes and types, making it a popular choice among accountants and bookkeepers. QuickBooks Online offers scalability and depth of features, ensuring it can meet the needs of solopreneurs and multi-location businesses alike. Additionally, its reporting capabilities and transaction tracking are robust, allowing for detailed business analysis.
Overall, QuickBooks Online is a reliable and user-friendly option for small businesses looking for efficient accounting software. The information provided is about the pricing and key details of QuickBooks Online and Xero, two popular accounting software options. It includes details on the monthly pricing, key features, and what users may not like about each software. Additionally, it highlights the differences in pricing, user experience, and integrations between QuickBooks Online and Xero, giving readers a comprehensive overview of both options. However, it still seems like an unnecessary restriction to impose on a paid subscription.
👉 See our overview of FreshBooks’ fees and other key details
Monthly pricing:
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$23 per month for the Lite plan.
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$43 per month for the Plus plan.
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$70 per month for the Premium plan.
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Custom pricing for the Select plan.
Key details:
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Accountant access: You must subscribe to FreshBooks’ $43-per-month Plus plan or up.
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Automated bank feeds: You can automatically import bank transactions in all plans. But you’ll need the Plus plan to access reconciliation tools.
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Integrations: FreshBooks integrates with SurePayroll and Gusto for payroll. But POS integrations are limited.
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Support: All plans include phone support from 8 a.m. to 7 p.m. ET on weekdays. There’s email and live chat support as well.
What I don’t like about FreshBooks
Entry-level plan is missing key features. FreshBooks’ least expensive plan lacks features most competitors include — sometimes even for a lower price. For example, the Lite plan is missing reconciliation tools, double-entry accounting reports and accountant access. Zoho Books provides all of these capabilities in its free plan.
Billable client limits. I understand FreshBooks putting a limit on billable clients in its Lite plan. But even the $43-per-month Plus plan caps clients at 50. If you have more billable clients than that, spending $70 per month for the Premium plan is a tough sell.
Like FreshBooks, Xero’s least expensive plan limits how many invoices you can send. But it only costs $55 for a plan that allows for unlimited invoicing (and billable clients).
Wave: The best for free, unlimited invoicing
Wave Wave Accounting
Wave stands out for its simplicity. It doesn’t have a giant list of features like more robust competitors do. That’s OK — and perhaps even preferable — for solopreneurs and very small businesses or side hustles.
You can use its free plan to track income and expenses, send unlimited invoices and run basic reports. If you’re using its online payment processing services, you can also automatically send out invoice payment reminders.
However, you’ll need to subscribe to its paid plan for automated bank feeds, transaction categorization and accountant access. And unlike its competitors, it doesn’t have audit trails in any of its plans. This could be problematic if you’re giving employees access to the software.
What I like about Wave
Low barrier to entry. Wave’s free plan and simple set of features don’t require much of a commitment. If you only handle a few transactions each week, you might give it a try. And if you decide it isn’t for you, you can move onto a more suitable alternative. Just make sure you make the decision relatively quickly so you don’t need to migrate pages and pages of transactions.
Easy invoicing. I tested out Wave’s invoicing system, and it doesn’t get much simpler. You can choose from three different templates and upload your own logo. After choosing your brand colors, you just fill out the fields for item name, price, quantity and tax.
👉 See our overview of Wave’s fees and other key details
Monthly pricing:
Key details:
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Accountant access: You must subscribe to Wave’s paid plan to add additional users, including accountants.
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Automated bank feeds: Only available in the $19-per-month Pro plan.
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Integrations: Wave has its own bookkeeping services and payroll. Otherwise you need to pay for Zapier to integrate with third-party products.
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Support: You must pay for a service (like online payment processing or the Pro plan) to access live support. Chat and email support is available from 9 a.m. to 4:45 p.m. ET on weekdays.
What I don’t like about Wave
It put a paywall on formerly free features. If you read customer reviews of Wave, you’ll notice they’re pretty unhappy about its pricing. It doesn’t make much sense when you consider its paid plan is only $19 per month. You start to put the pieces together when you realize it used to offer some features, like automated bank feeds, for free.
To be fair, competitors like Zoho Books also save automated bank feeds for paid plans. I don’t fault Wave for making that adjustment. Putting a paywall on receipt scans doesn’t make as much sense to me. Zoho Books, for example, includes 50 receipt autoscans per month in its free plan.
No inventory tracking or report filters. Wave has a low barrier to entry, but that doesn’t mean all businesses should give it a try. Its use case is limited to side hustles and very small businesses that only need the basics.
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