Small business owners are busy and need accounting software to pay their bills, collect money from customers, and track income and expenses. However, the best accounting software for small businesses is not a one-size-fits-all solution and will vary greatly by industry and your personal preferences. We’ve given you our top accounting software picks as well as a discussion of the industries in which they are best.
Best 6 Accounting Software for Small Business
- QuickBooks Online: Best overall small business accounting software with project, class, and location tracking that can be customized for any industry
- QuickBooks Desktop Pro: Best desktop accounting software for users without a constant internet connection and those who want to manage the books of multiple companies
- Zoho Books: Best for freelancers, gig workers, solopreneurs, sole proprietorships, and other self-employed business owners
- Sage 50Cloud Accounting: Best for consolidating financial statements of multiple companies
- FreshBooks: Best for small businesses needing professional-looking invoices and great invoicing features
- Wave: Best free accounting software for businesses needing only basic tracking of income and expenses
QuickBooks Online: Best Overall Small Business Accounting Software
QuickBooks Online
What We Like
- Extensive list of customizable reports
- Easy to find a local QuickBooks ProAdvisor for help
- More features than other cloud-based programs
What's Missing
- More expensive than most competitors
- Limited users
- No industry-specific tools
Plans & Pricing
New users can choose between 50% off for three months or a free 30-day trial.
- Simple Start: $25 per month for one user
- Essentials: $40 per month for three users
- Plus: $70 per month for five users
- Advanced: $150 per month for 25 users
Compare the features of each plan in our QuickBooks Online comparison guide.
QuickBooks Online is a superb choice for most small businesses. It is easy-to-use accounting software that you can share effortlessly with employees, certified public accountants (CPAs), and tax professionals. With tiered subscription levels, QuickBooks Online can scale as your business grows or your needs change. You can try QuickBooks Online for free with a 30-day trial with no credit card required.
Who QuickBooks Online Is Best For
QuickBooks Online earned our top ranking for each of the following industries and features:
- Construction: QuickBooks Online, when integrated with Buildertrend, provides excellent project accounting as well as construction management tools like employee time and location tracking, customer relationship management (CRM), and customer portal.
- Ecommerce retailers: QuickBooks Commerce can be added to QuickBooks Online to provide direct integrations with most ecommerce platforms, reducing the need for expensive third-party connectors.
- Real estate businesses: The ability to separate activity by both class and location makes QuickBooks Online a viable option for property management companies that need to track income and expenses for various segments and locations.
- Time tracking: QuickBooks Time, formerly TSheets, integrates with QuickBooks Online to provide outstanding time tracking for both billing and payroll purposes.
- Online bookkeeping assistance: Intuit provides an online bookkeeping service, QuickBooks Live, that pairs companies with a dedicated team of ProAdvisors to provide bookkeeping services tailored to your QuickBooks Online needs.
- Mobile app: QuickBooks Online has an incredible mobile app that allows you to perform nearly any accounting task on the go, including invoicing.
Our Expert Opinion
It’s hard to go wrong with QuickBooks Online if you can afford the price. It is very flexible and powerful software that can be customized for nearly any business. We offer 46 free QuickBooks Online tutorials to help you learn QuickBooks Online. If your business is in a niche with distinct needs, such as trucking or nonprofits, you might consider other accounting software that provides management features in addition to accounting.
QuickBooks Desktop Pro: Best Desktop Accounting Software
QuickBooks Pro
What We Like
- No internet connection required
- Industry-specific editions available with an upgrade to Premier
- Bookkeeping for an unlimited number of companies
What's Missing
- Not as user-friendly as QuickBooks Online
- Must purchase annual subscription to have unlimited customer support
- Requires additional licenses for each concurrent user
Pricing
- Pro 2021: $399.99 for one user, plus $250 for each additional user up to three maximum users
- Pro Plus 2021 Subscription: $299.99 per year for one user, plus $200 per year for each additional user up to three maximum users.
- Premier 2021: $649.99 for one user, $350 for the second user, plus $400 each for users three through five
- Premier Plus 2021 Subscription: $499.99 per year for one user, plus $300 per year for each additional user up to five maximum users
The Plus subscriptions are required for unlimited customer support, off-site backups, and annual upgrades to the latest editions.
Pro and its upgrade, Premier, are desktop versions of QuickBooks that can be used to keep the books of an unlimited number of companies for a single price. This makes them much more affordable than cloud-based accounting software, which almost always charges for each individual company. QuickBooks Pro and Premier are the programs that built QuickBooks into the dominating leader in small business accounting software, and they are still terrific options for many companies.
Who QuickBooks Desktop is Best For
- Farmers & ranchers: QuickBooks Pro is a great option for farmers and ranchers that may not have continuous internet access. It allows users to track income and expenses by class like corn, wheat, or livestock.
- Bookkeeping for multiple companies: Users can keep track of an unlimited number of companies with the purchase of a single QuickBooks Pro license.
- Nonprofit organizations: By upgrading to QuickBooks Premier, users can select the Nonprofit Edition, which is designed specifically to be used by nonprofits and includes specialized workflows and reports. Read our full review of Quickbooks Premier, or visit QuickBooks Premier to try the software with a 60-day money-back guarantee.
Our Expert Opinion
QuickBooks Desktop Pro and Premier editions are very powerful accounting software, perhaps even more powerful than QuickBooks Online. However, they are more difficult to master and don’t provide the advantages of mobile accounting. Read our in-depth comparison of the platforms in QuickBooks Online vs Desktop to choose the best software for your business.
Zoho Books: Best for Self-employed Businesses
Zoho Books
What We Like
- Customer service by telephone
- Affordable for even the smallest businesses
- Track time and expenses and add to an invoice
What's Missing
- Doesn’t integrate with tax preparation software
- Receipt scanning requires an additional fee
- The Standard edition doesn’t track unpaid bills
Pricing
- Standard: $20 per month for three users
- Professional: $50 per month for five users and includes managing bills, sales orders, and purchase orders
- Premium: $70 per month for 10 users and includes a vendor portal and budgeting
Zoho Books is an affordable accounting solution that is easy to use. It’s one of many Zoho apps, such as Zoho CRM, Zoho Inventory, and Zoho Projects, that can be integrated to give you a comprehensive solution to all your business needs. Zoho Books can be purchased separately, as part of the Zoho Finance bundle, or as part of Zoho One, which includes all of Zoho’s apps. You can evaluate Zoho Books with a 14-day free trial.
Who Zoho Books Is Best For
Zoho Books is our top pick for freelancer accounting software because it’s easy to use, very affordable, and has a great mobile app for business owners that are rarely in the office.
Our Expert Opinion
Zoho is unique in its approach to business management software. It offers a large selection of very narrowly focused business apps. You buy only the apps that fit your particular needs to arrive at a custom-made whole-business software solution. Most businesses will start with Zoho Books but might want to add Zoho Projects eventually for project management or Zoho Inventory to manage inventory better.
Sage 50Cloud Accounting: Best Accounting Software to Consolidate Financial Statements
Sage 50Cloud Accounting
What We Like
- Manage multiple companies for one fee
- Produce consolidated financial statements
- Employees and accountants can access data through Sage Drive
What's Missing
- Only one remote user at a time can make changes to the file
- No option to purchase the software without a subscription
- Subscription is more expensive than similar QuickBooks Premier Plus
Pricing
- Pro: $56.08 per month for one user
- Premium: $84.58 per month for one user to $194.75 per month for five users
- Quantum: $139.58 per month for one user to $356.83 per month for five users, with custom pricing available for more than 10 users
Sage 50Cloud, generally referred to as simply Sage 50, is a unique bookkeeping software that is a desktop program but can store your data in the cloud to be accessed from anywhere. Formerly known as Peachtree, Sage has been in the accounting software industry since 1978 and is a reliable alternative to QuickBooks. Sage 50 is very powerful and allows you to produce consolidated financial statements for parent-subsidiary entities, a very rare feature for small business software.
Who Sage 50Cloud Accounting Is Best For
Sage 50Cloud Premium and Quantum editions are very affordable software that can consolidate the financial statements of multiple companies as required by Generally Accepted Accounting Principles (GAAP) when one entity owns 50% or more of another.
Our Expert Opinion
Sage 50Cloud is a good software that is easy to use but more expensive than other options. While popular, it will be harder to find support from third-party bookkeepers than the more popular QuickBooks products. If you need to produce consolidated financial statements, Sage 50 is one of your few choices in small business accounting software.
FreshBooks: Best for Professional-looking Invoices
FreshBooks
What We Like
- Produce professional-looking invoices
- Track time and add to invoices
- Track project profitability
What's Missing
- Cannot track unpaid bills
- Subscriptions limit the number of clients
- Additional users require a fee
Pricing
- Lite: $15 per month for one user and five billable clients
- Plus: $25 per month for one user and 50 billable clients
- Premium: $50 per month for one user and unlimited billable clients
- Select: Custom pricing for two users, a dedicated FreshBooks account manager, custom onboarding assistance
Additional users can be added to any plan for $10 per user per month.
FreshBooks was started as a way to produce great-looking, professional invoices. While still emphasizing its invoices, FreshBooks has grown into a complete bookkeeping system where you can track revenue and expense and print financial statements. There’s no credit card required to start a 30-day free trial.
Who FreshBooks Is Best For
FreshBooks is our top-rated invoicing software and is ideal for tracking employee time and expenses and adding them easily to great-looking invoices.
Our Expert Opinion
Beyond its professional-looking invoices, FreshBooks’ bookkeeping is solid and offers many advanced features like bank connections, receipt scanning, time tracking, and project budgeting and tracking. Because FreshBooks does not track unpaid bills, it cannot be used to calculate net income on an accrual basis.
Wave: Best Free Small Business Accounting Software
Wave
What We Like
- Free forever
- Unlimited users
- Run multiple businesses in one account
What's Missing
- No inventory cost tracking
- No mileage tracking
- No time tracking
Pricing
Wage is free forever with unlimited users.
Wave is a good choice for service-based small businesses. Although Wave is free, its bookkeeping functions and features are useful and provide a solid solution for small businesses on a tight budget.
Who Wave Is Best For
Wave is terrific software for very small businesses that don’t have inventory and are willing to give up features to use free accounting software.
Our Expert Opinion
Wave is absolutely free yet offers some of the same features as paid software. It includes bank connections, receipt scanning, and invoicing. It makes money by users adding on payroll or merchant services to their account, but paid software providers also charge extra for these services. Wave falls short of paid software in several areas such as reports, inventory management, and mobile accounting.
Honorable Mentions for Best Small Business Accounting Software
While not rated as best for any particular industry or function, these accounting software programs provide quality options that should be considered.
Xero
No list of accounting software is complete without mentioning Xero. While we consistently rate QuickBooks Online better than Xero across all industries, Xero is still very good software with excellent inventory accounting. Xero is less expensive than QuickBooks Online and rated as our best alternative to QuickBooks.
Sunrise
Sunrise by Lendio offers free accounting software for do-it-yourself (DIY) bookkeeping or provides assisted bookkeeping for a fee. The main weakness of the DIY software is the inability to reconcile your bank accounts to your bank statements, which isn’t a major problem unless you issue a lot of paper checks.
Additional Accounting Software for Niche Industries
Some industries have specialized accounting needs that require specialized software. Here are our top picks for specialized industries:
Niche Accounting Software | Description |
|---|---|
Triple reconciliations between bank statements, client ledgers, and client trust accounts makes this the best law firm accounting software. | |
Our pick for best church accounting software, it combines great church management software with accounting software at a low price. | |
This software is our best restaurant accounting software with great restaurant management tools in addition to solid accounting. | |
Our best trucking accounting software manages accounting, dispatch, fuel, inventory, mileage, employees, and vehicles, all in one program. |
Why You Need Small Business Accounting Software
Researchers from Griffith University found that 82% of experts believe a small business owner’s financial literacy, including their knowledge of accounting software, is an important factor in the survival of their business. You need to take an active interest in the financial aspect of your business to avoid being a part of the 50% of small businesses that fail within their first five years. Financial literacy starts with using bookkeeping software to compile the information you need to make informed decisions. You can read my nine bookkeeping tips to help simplify your bookkeeping and use it effectively.
In addition to helping you understand and manage your business’s finances, good accounting software can save you time.
How Small Business Accounting Software Works
All businesses should have accounting software that can bill customers and track their payments, help manage and track your bills, and provide reports to see how your business is performing. Beyond that, the features you need in accounting software will vary by your industry and your personal preferences.
Invoicing and Tracking Customer Payments
Your accounting software should be able to issue invoices and track them until they are paid by your customer. It’s also helpful if your software will print an accounts receivable (A/R) aging report, which shows all of your outstanding invoices grouped by how long they are past their due date. Finally, the best accounting software will track inventory, time, and expenses and allow you to easily add them to your invoices without much manual data entry.
Managing Bills and Tracking Expenses
Ideally, your accounting software should allow you to input bills when you receive them, including their due date. You can receive reminders of upcoming due dates and print an accounts payable (A/P) aging report grouping bills by how long they are overdue.
Reporting
At the very least, your accounting software should print a statement of profit and loss and a balance sheet that can be used to prepare your tax returns. It’s helpful if software prints comparative financial statements that show both current and prior year numbers side-by-side.
The best accounting software will print many more reports than just basic financial statements. For instance, if your business deals with inventory, a report summarizing the quantity and cost of current inventory on hand is essential. If your company works on large projects, such as a construction company, you’ll want reports that track the profitability of individual projects and compare the actual results to the estimated costs.
Fulfilling Industry-specific Needs
Many industries have specific requirements for their accounting software that might not apply to other industries. For example, restaurants and brick-and-mortar retail stores need a strong point-of-sale (POS) system. For these businesses, it’s important to choose an accounting system that will integrate with a POS system to transfer the data automatically without manual entries, which can cost time and create mistakes.
Other industry-specific needs include time and location tracking of employees, ecommerce platforms, CRM, and subcontractor management.
How We Evaluated Accounting Software
All the software we evaluate provides the basic functions of categorizing revenue and expenses and tracking account balances. We looked at features that vary between programs that you should consider when choosing what’s best for your business.
- Value: The cost of software naturally increases with the number of features available, so we evaluated the cost of the software relative to the features and functionality offered. We also favored software with a free trial period that doesn’t require a credit card.
- User-friendly: Most small business accounting software is designed for nonaccountant users, but we evaluated whether the software is user-friendly compared to its competitors.
- Invoices: We placed importance on the invoicing function of accounting software as this feature is important to the vast majority of businesses.
- Online customer payments: Customers pay much quicker if they can do so online rather than mail a check, so we favored software that allows online payments to be integrated with the accounting system.
- Bill tracking and payment: Most, but not all, accounting software will track unpaid bills (A/P) and even allow you to initiate an online payment from within the software. We considered the lack of an A/P function a serious shortcoming.
- Payroll: Payroll is a headache and should be outsourced whenever possible. We favored software that can integrate with payroll providers to automate the accounting entries required after each payday.
- Financial statements: While most software will provide a balance sheet and statement of profit and loss, some of the free programs fail to provide statements that compare current period figures to prior-period figures, which makes interpretation of the reports more difficult.
- Advanced features: Beyond the basics, some software provides advanced features that can make your life easier, such as receipt scanning, GPS mileage tracking, and time tracking.
Bottom Line
There are many terrific small business accounting software available, but none of them are as versatile and comprehensive as QuickBooks Online. However, QuickBooks Online is not always the best solution, especially if you only have very basic needs and wish to save money. Also, if your business operates in a very specialized industry, you may be able to find industry-specific software that won’t require as much customization as QuickBooks Online.
David Norris
First off, I am very new to the Accounting Software space, and was looking for a Small Business Accounting Package, when I found this site. Timing is perfect and your information is spot on. I have created a business Excel Workbook for our very small business (an LLC with 4 partners), during the COVID shutdown but have realized, after digesting your information, that I may be better served with an accounting package having payment tracking, receipt scan, integration with SQUARE (which we use at Farmer’s Markets), etc., as we are expecting our business to really grow, post COVID. But I have a specific need which is: Can these packages track the sales of individual product lines? We would like to track each product and assess its overall contribution to the bottom line. Can I do this with these packages? Do the packages allow me to categorize our business equipment and purchases throughout the year as Assets, Cost of Goods Sold, SG&A, Operating Expenses, etc.? Do these packages produce statements such as Income, Balance Sheets, P&L …. I expect QB does it all, but it’s expensive for our size, right now … what of the other solutions? Do these packages have CRM functionality?
Or is this just the basics in all these packages and I am showing my lack of knowledge here?
Thanks so much!!
Tim Yoder
Hi David,
I’m really glad to hear you want to use accounting software to it’s full potential! While you might be new to the space, you certainly understand the potential of good accounting software!
You’ve expressed some hesitancy with QuickBooks Online (QBO) because of the price, but honestly QuickBooks Online far exceeds it’s competitors when doing the detailed tracking your requiring. First, QBO allows you to create “Classes” that could be used to separate your products into the various lines you want to track. Second, QBO allows you to further separate your accounting by “Locations”, but if you don’t actually have separate locations you could use the location tracking as essentially subclasses for more detail within your product lines. Reports can be generated by both classes and locations. Third, you’ll create an “Inventory Item” for each of your products, which enables QBO to track the profitability of each product and produce reports. The use of “Inventory Items” will also allow QBO to track the quantity of products on hand and allocate the proper cost to Cost of Goods Sold when products are sold. Finally, QBO allows you to create custom “Tags” that can be attached to transactions to allow for a huge variety of tracking options.
It’s going to be vital that you get your QBO set up properly to achieve everything you want. I recommend allowing the bookkeepers at QuickBooks Live to assist you, or finding an independent QuickBooks ProAdvisor to help you. You should be able to do the accounting yourself was you’re up and running, but set up is really important. To learn the basics of QBO, you can review our 46 Free QuickBooks Online Tutorials.
QBO does not have much CRM functionality, but there are plenty of CRM integrations for QBO that can be purchased.
I hope this helps and good luck with your new business!
Tim
Arista Consulting
Hi, Very Informative Blog!! I really appreciate your efforts of writing very deep information related to accounting software for small businesses. I am very impressed with your way of explaining each and everything very clearly. Thanks for sharing.
Eileen Maki
Thanks for stopping by! I’m glad you found the article informative.
~ Eileen
Marine Scott
Hi!
Informative blog. I appreciate the way you have described and mentioned all the terms of accounting software. In this Era, choosing the best accounting software for business is the most important part. Every business owners, CPAs, accountants want to manage their finances in easy, fast and in a secure way because nowadays solving the accounting problems with the help of paperwork is less effective. So the best software is needed to manage accounting activities and as about to choose the best one, my recommendation is QuickBooks. It is the most popular accounting software in the world which is used for small to medium-sized businesses. It is user-friendly as well as helps in tracking expenses. You can use it to pay bills, tax filing, generate reports for planning, invoice customer, and more.
Eileen Maki
Hi Marine,
Thank you for your comment. I’m glad you liked the article. You’re right, QuickBooks does hold the market share in the accounting software arena. It’s a great solution for small business owners.
Thanks for stopping by and reading the article!
~ Eileen
DINESH ARORA
Thanks for a very useful blog. Please do look at AlignBooks and evaluate. Find pretty comprehensive and being offered at dirt cheap price. Would love to hear ur valued comments, post evaluation. Regards
Amanda Norman
Glad you enjoyed the post, Dinesh. Thanks for suggesting AlignBooks. We’ll keep that in mind for a future update!
Thanks for stopping by.
Mandy, Moderator
Shreya Verma
Hi Crystalynn! Thank you for sharing such a knowledgeable blog with us. I appreciate the work you do for this site. I am also using one of the accounting software for the last 10 months named BTHAWK.
I do every task related to accounting starting from bookkeeping tasks till making financial statements like balance sheet, trading & P&L, etc. Through BTHAWK, I also able to file tax returns online.
So I would suggest you have a look at it once. Besides this, I like this blog site as it always gives me a chance to read informative content.
Keep blogging and looking for more content in the future.
bthawk.com, GST Billing Software-BTHAWK
Thank You.
Amanda Norman
Hi Shrenya,
So glad you find the articles helpful.
Thanks for sharing your experience! Best wishes.
Mandy, Moderator