The best retail accounting software should include the ability to track inventory and sales tax, produce basic financial reports like profit and loss and balance sheet, and monitor all income and expenses. It must also let users choose the method of costing inventory in the balance sheet.
With that, we evaluated five of the best accounting software for small retail business operations:
- QuickBooks Online: Overall best accounting software for small retail businesses and ecommerce sellers looking for excellent inventory and sales tax management
- Xero: Best low-cost software for retailers with more than $50,000 in revenue
- QuickBooks Desktop Retail Edition: Best for retailers with a single user
- Sage 50cloud: Best for retailers with an in-house professional bookkeeper
- Zoho Books Free: Best free software for retailers with less than $50,000 in revenue
Best Retail Accounting Software Compared
Provider | Monthly Pricing | Inventory Method Supported | Track Sales Tax Collected | Mobile App | Number of Users |
|---|---|---|---|---|---|
 | $35 to $235 | First-in, first-out (FIFO) | ✓ | ✓ | 1 to 25 |
 | $15 to $78 | Average cost | ✓ | ✓ | Unlimited |
 | $370 to $1,361 | Average Cost | ✓ | 1 to 5 | |
 | $57.17 to $409.17 or custom priced | FIFO, average cost, and last-in, first-out (LIFO) | ✓ | 1 to 10 or custom | |
 (Free plan) | $0 | FIFO | N/A | ✓ | 1 user plus 1 accountant |
QuickBooks Online: Overall Best Accounting Software for Small Retail Businesses and Ecommerce Sellers Looking for Excellent Inventory and Sales Tax Management
Pros
- Strong inventory management features (available in Plus and Advanced)
- Sales tax rate determined automatically
- Wide selection of customizable financial reports
- Powerful mobile app
Cons
- More expensive than comparable products
- No customer service telephone number
- Add users by upgrading plan
- Doesn’t support the average cost method of inventory accounting
Pricing & Plans
- Simple Start: $35 per month for one user
- Essentials: $65 per month for up to three users
- Plus: $99 per month for up to five users (most popular)
- Advanced: $235 per month for up to 25 users
New subscribers can choose between 50% off for the first three months or a 30-day free trial.
I placed QuickBooks Online as best overall because of its flexibility as general accounting software. It scored high in inventory and general features. Its inventory features are enough for most retail businesses since it can track inventory costs, quantities, and cost of goods sold (COGS). Its general features are also excellent, especially in the areas of banking, accounts payable (A/P), and accounts receivable (A/R).
QuickBooks Online took a hit in the score for mobile app functionality because of its limited features. The app can’t record time work, enter bills, and assign time to customers. However, it is still useful for sending invoices, receiving payments, and categorizing expenses.
Overall, I recommend QuickBooks Online’s Plus plan as the starting point if you want most of QuickBooks Online’s features. Its only limitation is the price and the number of seats available. The pricing between QuickBooks Online Plus and Advanced is quite a jump, so I recommend Xero Established instead. As Xero’s highest plan, it’s only $78 per month, contains many similar features to QuickBooks Online, and has unlimited seats.
Xero: Best Low-cost Software for Retailers With Over $50,000 in Revenue
Pros
- Unlimited users in plans
- Cheaper plans than competitors
- Customizable reports
- Robust integrations with third-party apps through the Xero App Store
Cons
- One subscription is only good for one organization; no option to add more
- No live customer support
- Mobile app has limited features
- Entry-level plan restricts the number of bills and invoices
Pricing & Plans
- Early: $15 per month for up to 20 invoices and five bills
- Growing: $42 per month for unlimited invoices and bills
- Established: $78 per month for unlimited invoices and bills plus project accounting
You can sign up for a 30-day free trial to help you decide which plan best suits your needs.
Xero is a good pick if you want all essential and advanced accounting features at a low price. For only $78 per month under the highest plan, it offers a diverse range of features also found in QuickBooks Online, its toughest competitor in the accounting software market. I recommend Xero for businesses needing to add many users without paying for additional seats or restricting themselves to limited users per plan.
However, Xero remains second to QuickBooks in terms of popularity in the United States, so my rating of its ease of use is only above average because of the software’s support network—most US accountants and certified public accountants (CPAs) are more familiar with QuickBooks and more inclined to get a QuickBooks ProAdvisor certification. This limitation is the reason why Xero’s ease of use score is average. Hence, I advise that you choose QuickBooks Online instead for access to a vast network of ProAdvisors.
Xero also scored low in mobile app functionality. lacks features like receiving payments, assigning expenses to customers or projects, and viewing reports. You can get these features in QuickBooks Online’s mobile app if those matter to your business processes.
QuickBooks Desktop Retail Edition: Best for Retailers That Need a Single User
Pros
- Ability to track inventory of up to 14,500 items
- Custom workflows and reports specifically for retailers
- More advanced reporting features than in QuickBooks Online
- Ability to manage an unlimited number of companies
Cons
- Not ideal for multiple stores or an online business because it is hosted locally
- Limited payment processing options
- Plans become pricey once you start adding additional users
- Steep learning curve
Pricing & Plans
The Premier Plus and Enterprise tiers of QuickBooks Desktop include the industry-specific retail edition:
- Premier Plus: Ranges from $799 to $1,999 per year for one to five users, respectively Each additional seat costs $300 per year.
- Enterprise Diamond: Ranges from $370 to $1,361 per month for one and up to 40 users
QuickBooks Desktop lacks a free trial.
QuickBooks Desktop is the desktop counterpart of QuickBooks Online. I gave QuickBooks Desktop Retail Edition a perfect score in inventory criterion because it offers more advanced inventory features than in QuickBooks Online.
However, the platform can be expensive for some small businesses. Plus, its mobile app is not a full app. Rather, it’s just a scanner for scanning receipts and documents. Moreover, using the software is not a walk in the park, and users without accounting experience will have a hard time using it.
If these points matter to your business processes, I recommend QuickBooks Online. It is far easier and more affordable than QuickBooks Desktop Retail Edition, and it has a great mobile app that can handle more than just receipt scanning.
Sage 50cloud: Best for Retailers With an In-house Professional Bookkeeper
Pros
- Adequate inventory features for tracking COGS and ending inventory
- Calculates COGS using LIFO, FIFO, or average cost
- Accessible customer support
Cons
- Difficult to use for non-bookkeepers
- Cannot access full software via web
- Requires desktop installation despite the “cloud” branding in its name
Pricing & Plans
- Pro Accounting: $57.17 per month for one user
- Premium Accounting: $96.58 to $222.25 per month for one to five users
- Quantum Accounting: $160 to $409.17 per month for 10 users
If you need more than 10 users, you need to ask for a custom quote from Sage.
In my evaluation, I found that Sage 50cloud is not as powerful as the other choices on this list. I gave it a high score in inventory features because it can track inventory costs, compute COGS, and report ending inventory. Its ease of use and mobile app are not Sage 50cloud’s strongest suits. I gave its mobile app a poor rating because it’s only intended for receipt scanning. Moreover, its ease of use is below average because of the software’s difficult user experience.
Also, despite the “cloud” branding in its name, Sage 50cloud is still a desktop software. The cloud features are only for the add-ons, not the whole software. If you prefer desktop over cloud accounting, our best alternative for Sage 50cloud would be QuickBooks Desktop Premier Plus. If you need a decent mobile app, I recommend QuickBooks Online.
Zoho Books Free: Best Free Software for Retailers With Less Than $50,000 in Revenue
Pros
- Robust mobile app can handle almost any accounting task
- Add multiple bank and credit card accounts
- Integrates with other Zoho apps
Cons
- Payment gateways are limited to Stripe and PayPal for free version
- Limitation on the number of invoices you can send
- Free version excludes inventory accounting
- Cannot file sales tax returns
- Only paid plans include access to phone support and live chat
Pricing & Plans
Zoho Books offers a free version for businesses with less than $50,000 in revenue. This includes one user and one accountant.
There are also five paid subscriptions. Inventory accounting is included in all tiers, save for Standard:
- Standard: $20 per organization, per month, for up to three users
- Professional: $50 per organization, per month, for up to five users
- Premium: $70 per organization, per month, for up to 10 users
- Elite: $150 per organization, per month, for up to 10 users
- Ultimate: $275 per organization, per month, for up to 15 users
Zoho Books Free scored fairly well in my evaluation. However, since it’s free software, I expected that it would fall short in inventory features because all premium inventory functions are in its paid plans.
The free plan can only view inventory units, compute inventory costs, and track inventory items. I recommend going straight to the Professional plan if you want strong inventory features. However, Zoho Books Free scored high in both ease of use and mobile app functionality.
Zoho Books has a clean user interface, extensive self-help library, and excellent customer support. The free version’s mobile app is also decent. But if you get the Professional plan, you get more features like tracking time and assigning time worked, which are not present in QuickBooks Online’s mobile app.
How We Evaluated the Best Retail Accounting Software for Small Businesses
We considered a variety of accounting software that is beneficial for small retail businesses. We evaluated these programs in terms of general features that we’d expect to find in retail accounting software and also assessed them based on whether they had the basic features we’d take for granted, such as inventory tracking and accessible customer service. Finally, we took into account ease of use, pricing, and our own expert evaluation.
20% of Overall Score
We considered the software’s general accounting features, banking, A/R, A/P, sales tax, and reporting features. Since we were evaluating retail accounting software, we awarded more points to software products that offered premium accounting features. We also evaluated whether they contained at least the basic features needed in small business accounting.
10% of Overall Score
Pricing is an important factor when determining the best software product for your business. Often, the features that are most needed are excluded from the free or lower-priced plans, so it is important to ensure what is covered with each price level.
50% of Overall Score
Inventory received a heavier weight in our scores because it is a feature that is often missing or considered a premium feature in accounting software. We evaluated the software’s ability to track inventory costs and stock levels. We also considered whether the software could track COGS and compute the cost of ending inventory automatically.
10% of Overall Score
We evaluated the user’s ability to learn the software quickly and gave higher scores to software products that are easy for nonaccountants to use. We also considered accessible customer service and support networks.
10% of Overall Score
A mobile app should be a useful tool for users on the go, assisting them with the organization of their books. The app should allow users to send invoices, receive and send payments, and enter bills. Advanced features are also a plus, such as the ability to view reports and record time worked.
Frequently Asked Questions (FAQs)
No, they aren’t the same, but they can work together to help you provide the best service to customers. Your retail accounting platform can provide information regarding account balances and dues, while a retail CRM tool can help in achieving customer needs.
Yes, especially if your retail business is growing. Retail accounting software will help you track all purchases, inventory statuses, breakages, losses, sales, and inventory returns.
Bottom Line
QuickBooks Online is the overall best accounting software for small retail business operations because of its strong inventory tracking features combined with extensive reporting. If you need more in-depth features such as the ability to track inventory assemblies, we recommend QuickBooks Desktop. Zoho Books Free has even better features than Xero but can only be used by companies with less than $50,000 in annual revenue.
