9 Best Accounting Software for Small Businesses 2020

The best small business accounting software is affordable, easy to use, and allows you to track income and expenses. The accounting software should also include detailed financial statements to give you insight into the financial health of your business. We looked at over three dozen products and narrowed it down to our top nine.

Top 9 Accounting Software Options for Small Businesses

How to Choose Bookkeeping Software

The key to choosing the right bookkeeping software is to make sure the software includes features you need to manage your business finances. At a minimum, bookkeeping software should track income and expenses, give multiple users access, generate detailed reports to file your taxes, and give you access to your data any time you need it.

The seven primary features that should be included in the bookkeeping software you choose are the ability to:

• Invoice customers: The software allows you to create custom invoices and email them to your customers.
• Pay bills: You can enter bills and pay them easily with a check or credit card.
• Integrate with bank and credit card accounts: The solution has the capability of connecting all your bank and credit card accounts so transactions automatically download into your bookkeeping software.
• Review detailed reports: The software gives you access to detailed reports, such as profit and loss and balance sheet reports, to give you the information you need when you need it.
• Accessibility: The program supports the ability to access your financial information any time you need to from anywhere you have internet access.
• Sales tax tracking: Provides a way to set up and track your sales tax, making reporting time easy and efficient.
• Organize receipts: The package lets you scan and organize your receipts and attach them to your financial transactions in the software.

In addition to the features listed above, your bookkeeping software should be scalable so you can add features or modules as your business grows. You might need to add additional users (like your accountant), add payroll services, and accept credit card payments from customers when your business is ready.

Why Online Bookkeeping Software Is Recommended

The majority of software companies only offer online bookkeeping software, and desktop software is becoming obsolete. While you can still purchase desktop software, you cannot use it to access your data from any device and you have to pay an additional fee to access new features or update to the new version of the software. Online bookkeeping software offers more flexibility, saves you time, and gives you access to the most recent product updates.

Some key benefits of using online bookkeeping software over desktop versions are:

• Provides access to data on any device: Since there is no software to install, you can access your data using any mobile device, computer, or laptop with an internet connection.
• Allows for increased automation: Having the ability to connect your bank and credit card accounts eliminates the need to manually enter transactions.
• Simplifies communication with tax and accounting professionals: You can give your tax preparer or accountant access to your data so they can pull the reports needed to file your taxes without having to use your valuable time.
• Allows for frequent and automatic updates: Unlike desktop software, online versions automatically give you access to these improvements without having to pay additional fees
• Integrations: Because the software is online and operates from an internet browser, you can add applications to your software to automate entries, save money, or maintain a customer relationship management (CRM) database.
• Backup features: Backups of your data and company files are kept off-site with the provider of the software. You don’t have to worry about backing up your software on external media and taking it with you.

The accounting software products that made our list include online options that allow you to do basic bookkeeping, such as invoicing customers and paying bills. In addition, you, your accountant, and tax preparer can access your data from anywhere at any time.

Here are the nine best small business accounting software options that made our list.

QuickBooks Online: Best Overall Small Business Accounting Software

QuickBooks Online (QBO) is ideal for businesses of all shapes and sizes. If you’re looking for an accounting software that can grow with you from a sole proprietor to an S corporation (S-corp) or C corporation (C-corp), choose QBO. While QBO can be more expensive than its competitors, between $15 and $150 per month, the time and resources it can save your small business are priceless.

QuickBooks Online Pricing & Features

QuickBooks Online offers five pricing tiers (Self-Employed, Simple Start, Essentials, Plus, and Advanced). Pricing starts at $15 per month for Self-Employed and $25 for Simple Start. While these two plans are the most affordable, they also have limited features.

All five QuickBooks Online plans include the following features:

• Ability to connect bank and credit card accounts
• Unlimited tech support via telephone or chat
• Ability to accept online payments from customers
• Access to key financial statements such as profit and loss and balance sheet

When deciding which accounting software package is right for your small business, it’s important to compare the offered features as well as consider growth. A QuickBooks Online Comparison guide can help answer many of your questions.

QuickBooks Online Accounting Software Plans Comparison & Summary

QuickBooks Self-Employed (QBSE) TurboTax Bundle

QuickBooks Self-Employed is ideal for an individual or a business that files a Schedule C and pays most of their expenses with a debit or credit card. QBSE does not have payroll processing or the ability to manage and pay bills. Unlike other QBO plans, it includes the ability to transfer your data to TurboTax and file both your federal and state tax returns.

QuickBooks Online Simple Start

QBO Simple Start is an ideal QuickBooks software for small businesses that want to give other users access to their data and also need the ability to pay employees. Unlike QBSE, you can add payroll processing to QBO Simple Start for an additional fee. QBO Simple Start also includes more than 20 reports, like profit and loss, balance sheet, and statement of cash flows.

QuickBooks Online Essentials Plan

QBO Essentials is ideal for small to medium-sized businesses that need to give other users access to its data and has a lot of accounts payable to manage. Unlike QBSE and QBO Simple Start, QBO Essentials allows you to manage the full accounts payable cycle, including entering bills, managing due dates, and printing checks to pay bills. It also includes double the amount of reports that QBO Simple Start has (40 versus 20).

QuickBooks Online Plus Plan

QBO Plus Plan is ideal for product-based businesses that need to keep track of inventory purchases and sales. Unlike the other three QBO plans, QBO Plus includes the ability to track inventory and create budgets and forecasts, plus it has more than 65 reports.

QuickBooks Online Advanced Plan

The best small business accounting software for fast-growing businesses is QBO Advanced. QBO Advanced allows up to 25 users with customized access permissions. QBO Advanced also includes Fathom, a reporting tool that allows you to generate customized reports for key performance indicators (KPI). You also get a dedicated account manager and free self-paced training for your staff.

Based on our minimum criteria, here is how QBO stacks up against its competitors:

Cost

Compared to its competitors, QBO gives you the best deal for your money. The QuickBooks Self-Employed plan starts at $15 per month, which is almost double the cost of the starter plans for Xero and Zoho Books. However, it includes the following features that you won’t find in any of its competitors on our list:

• Separate personal and business expenses
• Quarterly estimated tax calculations
• Mobile mileage tracker
• Integration with TurboTax

Setup & Ease of Use

QBO is more complex to set up compared to FreshBooks, Zoho Books, and Wave. This is because, like Xero, it is much more robust than other accounting software solutions. However, navigating the program is very easy.

Like other software packages on our list, QBO doesn’t require a bookkeeping background to set up. Anyone familiar with online software applications will be able to pick up QBO quickly. However, if you need some guidance or have questions, you can look for a free QuickBooks course.

Manage Accounts Receivable

Similar to all of the other solutions we have listed, QBO allows you to create customized invoices to bill your customers for the products and services you have provided. In addition, you can keep track of unpaid invoices by running an accounts receivable aging report. Staying on top of your accounts receivable balances helps you avoid the need to send collection letters.

Manage Accounts Payable

The Essentials, Plus, and Advanced QBO plans allow you to track your outstanding balances with suppliers. QBO Essentials, Plus, and Advanced also include the ability to enter bills, pay bills, and run an accounts payable report to review open balances. These features are not available in Wave, Zoho Books, or FreshBooks.

Connect Bank & Credit Card Accounts

The beauty of using cloud accounting software like QuickBooks Online is that you can connect your bank and credit card accounts to the software. Similar to the Xero Early plan, QBO Self-Employed and Simple Start limit the number of transactions you can download. However, QBO Essentials, Plus, and Advanced allow you to connect an unlimited number of bank and credit card accounts.

Payroll Processing

Unlike FreshBooks and Zoho Books, which do not have a payroll add-on, four of the five QBO plans let you add payroll services. The two QBO payroll plans are self-service and full-service.

Self-service Payroll:

• Cost: $35 per month plus $4 per employee, per month.
• Services included: The employer can process payroll for all employees and contractors (including 24-hour direct deposit and check payments), file and pay all payroll taxes directly from QuickBooks, and print and mail W-2 forms.

Full-service Payroll:

• Cost: $80 per month plus $4 per employee, per month.
• Services included: The employer provides hours worked during each pay period and the system processes payroll for all employees and contractors, including same day direct deposit and check payments. Depending on your subscription level, QBO Full-service Payroll also files and pays payroll taxes on your behalf, and prints and mails W2 forms.

Accept Online Payments

Like all of its competitors, QBO lets you get paid faster by adding online payments to your account. Unlike similar small business accounting software, QuickBooks is the only product that has its own online payments processor, QuickBooks Payments.

Below are the fees associated with adding online payments to any QBO plan:

Prepare Key Financial Statements

QBO Simple Start, Essentials, Plus, and Advanced include more reports than its competitors, with more than 20 in the Simple Start plan and over 100 in the QBO Advanced plan.

In addition to the standard profit and loss, balance sheet, and statement of cash flows, QBO allows you to prepare:

• Accounts receivable aging report
• Accounts payable aging report
• Sales by customer report
• Sales by product report
• Budget versus actuals report (QBO Plus only)
• Key performance reporting (QBO Advanced only)

What QuickBooks Online Is Missing

At this time, QBO includes all of the features a small business needs to start, run, and grow their business. However, they do not offer a free version of the software like you get with Wave.

QuickBooks Reviews

QBO user reviews often mention how easy the accounting software is to navigate and how much they enjoy being able to access their data from any mobile device using the QBO app. A few users feel that QBO is expensive, but quickly admit that it is more than capable of handling all aspects of their business.

FreshBooks: Best Accounting Software for Solopreneurs & Freelancers

FreshBooks is perfect for freelancers looking to streamline their billing process to get paid faster. FreshBooks makes it easy to track hours you work and your contractors work, transfer those hours to an invoice, and email invoices to your customers. Pricing plans start at $15 per month for the Lite plan and $50 per month for the Premium plan. The Select plan is a custom pricing tier.

FreshBooks Pricing & Features

Similar to Xero and Zoho Books, FreshBooks has three pricing plans that start at $15 per month. Besides cost, there is only one primary difference between the three plans, and that is the number of clients who can be invoiced monthly. The Lite plan allows you to invoice up to five clients and the Select plan includes more than 500 clients.

All FreshBooks plans include the following additional features:

• Ability to track time
• Supports project tracking
• Access to over 100 custom invoice templates

FreshBooks Accounting Software Plans Comparison & Summary

FreshBooks Lite Plan

FreshBooks Lite is perfect for a startup business with no more than five clients who need invoicing each month. This plan is the most economical out of the four plans at $15 per month. Similar to Wave, FreshBooks does not allow you to track your accounts payable balances. FreshBooks doesn’t include payroll processing either, but it does integrate with Gusto payroll.

FreshBooks Plus Plan

FreshBooks Plus is ideal for a freelancer with no more than 50 clients who need to be invoiced monthly. At $25 per month, this plan is less expensive than QBO Essentials, which is $40 per month. However, QBO allows you to bill unlimited clients versus only 50 with FreshBooks Plus.

Unlike QBO Essentials, this FreshBooks plan does not have accounts payable (A/P) management. You can add the Gusto payroll app that can process paychecks, payroll tax payments, and tax filings.

FreshBooks Premium Plan

FreshBooks Premium is great for small to medium-sized businesses with up to 500 clients who need to be invoiced monthly. This plan is $50 per month versus $70 per month for QBO Plus. FreshBooks Premium does not have accounts payable, the ability to track your mileage, or a way to capture and organize receipts, all of which are available in QBO Plus.

FreshBooks Select Plan

FreshBooks Select is a fitting choice for a business that has a large volume of credit card transactions. With this plan, you can qualify for a lower credit card transaction rate based on your transaction volume. Similar to QBO Advanced, FreshBooks Select includes a personal account manager and custom training for you and your team.

Based on our minimum criteria, here is how FreshBooks compares to its opposition:

Cost

When it comes to cost, FreshBooks plans start at the same price as QBO’s Self-Employed plan, $15 per month. However, FreshBooks is missing a few features and is limited in some of the others. For example, most of the FreshBooks plans put a limit on the number of customers you are able to bill on a monthly basis.

All FreshBooks plans are missing or limited in the following features:

• Accounts payable tracking: None of the FreshBooks plans allow you to track accounts payable.
• Client invoicing: The Lite, Plus, and Premium plans limit the number of clients you can invoice each month.
• User access: All plans include one user. Each additional user costs $10 per month.

Setup & Ease of Use

As mentioned previously, FreshBooks is easier to set up than QuickBooks because it is not quite as robust. The average internet user should have no problems setting up their business in FreshBooks. Similar to all of the competitors on our list, it’s very easy to navigate around the FreshBooks program.

Manage Accounts Receivable

Out of all the small business software discussed here, FreshBooks allows you the most flexibility to create invoices that suit your brand. With FreshBooks, you can choose the style, font, and colors that match your brand. You can also set up automatic payment reminders and automatically charge late fees for overdue customer invoices. Additionally, you can stay on top of open balances by running an accounts receivable aging report.

Manage Accounts Payable

Similar to Wave and Zoho Books, FreshBooks does not have the ability to manage and pay bills. You also can’t run reports in FreshBooks to see balances owed to your suppliers, and you can’t print checks through the accounting software to pay your bills like you can in QuickBooks. However, if you pay most of your expenses through your bank account or credit card, FreshBooks may work for you.

Connect Bank & Credit Card Accounts

Unlike QuickBooks Self-Employed and Simple Start, FreshBooks does not limit the number of transactions or bank and credit card accounts you can connect. You can connect all your bank and credit card accounts to all three FreshBooks plans. This will save you a lot of time that you would have spent entering banking and credit card transactions manually.

Payroll Processing

QBO has a built-in payroll processing tool that you can turn on after paying an additional fee, but FreshBooks does not. However, the good news is that you can visit the FreshBooks Apps page to sign up for Gusto Payroll, which integrates with FreshBooks.

Accept Online Payments

Like QuickBooks, FreshBooks allows you to accept online payments for an additional fee. FreshBooks does not have its own credit card processing system like QBO does, so you will need to visit the FreshBooks Apps page to select a payment processor to start receiving online customer payments.

Prepare Key Financial Statements

FreshBooks can only produce one out of the three primary financial statements. You can create a profit and loss report, but you cannot run a balance sheet or a statement of cash flow report in FreshBooks. A profit and loss report only shows the income and expenses of your business during a specific time frame, typically a month. However, without the balance sheet and the cash flow statement, it is difficult to see the whole financial picture for your business.

The balance sheet not only shows the current position of the business, it also shows assets owned by the business, long-term debt such as loans, and the amount the owner has invested into the business. A cash flow statement shows patterns and trends in regard to money flowing in and out of the business. This information allows for forecasting and accounts payable management in current and future months. Without these integral reports to guide your business decisions, your business is almost running with blinders on.

What FreshBooks Is Missing

As mentioned previously, FreshBooks can only generate one out of the three key financial statements required. Additionally, you have to create a manual bank reconciliation report to ensure all bank and credit card balances match up with your bank and credit card statements. Bank reconciliations are mostly automated in QuickBooks Online. Transactions from your bank feed are matched with expenses and revenue, making most bank reconciliations as easy as clicking a button. With QBO, you can also generate all three of the primary financial statements in just a few minutes.

FreshBooks Reviews

According to FreshBooks reviews, users like how easy it is to do the customer billing, how much time they save by using the automatic invoice reminders, and how they can apply late fees to past due invoices. On the negative side, customers don’t like that FreshBooks is missing key financial reports, like the balance sheet and the statement of cash flows.

Xero: Best QuickBooks Alternative Small Business Accounting Software

If you’re looking for an alternative to QuickBooks, Xero may be your best choice. Out of all the competitors we included, Xero comes closest to offering the features found in QuickBooks. Xero does not charge a fee per user or limit the number of users you can have. Pricing runs between $9 and $60 per month.

Xero Pricing & Features

Xero has three pricing plans, Early, Growing, and Established, and it costs between $9 to $60 per month. All Xero plans allow you to give any number of users access to your data, connect unlimited bank and credit card accounts, and run key financial statements.

Below are the features included in all Xero pricing plans:

• Grants an unlimited number of users
• Supports connecting bank and credit card accounts
• Provides unlimited email tech support
• Empowers you with access to key financial statements

Xero Accounting Software Plans Comparison & Summary

Xero Early Plan

Xero Early plan is ideal for a startup business that has not generated many transactions. While the Early plan does have accounts payable and accounts receivable, you are limited to only five transactions per month. This means you can manage and pay up to five bills and send no more than five invoices or quotes to customers each month.

Xero Growing Plan

Xero Growing plan is optimal for a small business that needs to track accounts payable, accounts receivable, and multiple bank and credit card accounts. Unlike the Xero Early plan, you can process unlimited bills, invoice an unlimited number of customers, and connect all of your bank and credit card accounts.

Xero Established

Xero Established plan is excellent for small to medium-sized businesses that have expanded or plan to expand globally. Unlike the Early and Growing plans, the Established plan includes multicurrency accounting so you can create invoices, pay bills, and track bank accounts in more than one currency. This plan also lets you track expenses as well as project time and costs.

Based on our minimum criteria, here is how Xero stacks up against its competitors:

Setup & Ease of Use

Xero is similar to QuickBooks when it comes to setup and ease of use. Because Xero is a much more robust small business accounting software than FreshBooks, Zoho Books, and Wave, it takes some additional time to set up certain areas like the chart of accounts and multicurrency accounting. However, it is very easy to navigate Xero, in part because the company uses simple language rather than accounting jargon throughout the program.

Manage Accounts Receivable

Like its competitors, Xero plans include the ability to invoice customers, track payments, and stay on top of open accounts receivable balances. However, as with most tiered pricing plans, features are limited in the lower tiers. For example, the Xero Early plan limits invoicing to five customers per month.

Manage Accounts Payable

All three Xero plans include the ability to manage accounts payable. However, like its accounts receivable features, Xero’s accounts payable module limits the number of transactions you can process. You are only allowed to manage up to five bills per month with the Early plan. Upgrading to the Xero Growing and Established plans allows you to manage an unlimited number of bills.

Connect Bank & Credit Card Accounts

All three Xero plans include the ability to connect bank and credit card accounts. Much like QuickBooks Self-Employed and Simple Start, Xero limits the number of transactions you can reconcile in the Xero Early plan. The Growing and Established plans allow you to connect an unlimited number of bank and credit card accounts.

Payroll Processing

Like its competitors, payroll processing is not included in any of the Xero pricing plans, but it can easily be added for an additional cost. You can visit the Xero App marketplace to add Gusto Payroll to your Xero account. Gusto can handle all paycheck processing as well as payroll tax payments and filings.

Accept Online Payments

Similar to other accounting software, Xero allows users to offer online payment processing to customers through PayPal, Stripe, or Apple Pay. Just visit the Xero app store to select a payment app and follow the instructions to get started.

Prepare Key Financial Statements

Much like its opposition, Xero has detailed reports, like the profit and loss statement and aging reports, to help you keep track of open customer invoices and outstanding bills. You can also run bank reconciliation reports to ensure that your accounts agree with the actual bank account balances.

What Xero Is Missing

When it comes to product features, Xero is not missing any key feature that a small business needs. However, there are a couple of areas where QuickBooks beats Xero. First, all QBO plans include live telephone support while Xero only offers support via email. Because of their customer support processes, many people find a free Xero course to be extremely educational.

Xero Reviews

Xero user reviews indicate most consumers like how intuitive the user interface is and how easy it is to navigate within the program. Users also feel that the program lacks modern features, like cloud storage and tax software integration. Taking a moment to read over accounting software user reviews can be extremely helpful when considering which software package is best for your business.

Wave: Best Free Small Business Accounting Software

Wave is our choice for best free small business accounting software overall, making it ideal for businesses on a tight budget. Wave meets seven out of the eight criteria we used to evaluate software. The one area where it falls short is the inability to track and pay vendor bills.

Wave Pricing

Wave is free, so it is the most affordable bookkeeping software on our list. Even though it is free, it is fairly robust and has much of the functionality you’d expect from a small business software for bookkeeping.

Wave Features

Compared to its competition, Wave includes most of the features needed to run a small business. However, it falls short when it comes to managing accounts payable. You can enter unpaid bills into Wave, but you will have to manually mark them as paid.

Setup & Ease of Use

Like other software of its kind, including FreshBooks and Zoho Books, Wave is very user-friendly. Setup doesn’t take long and you don’t need an accounting or bookkeeping background to complete the setup for your business.

Manage Accounts Receivable

Wave allows you to create custom invoices to send to your customers. You can also manage open invoice balances using the accounts receivable aging report and follow up with customers before invoices are due or immediately after.

Manage Accounts Payable

Wave accounting software does not include accounts payable functionality. You can enter your bills and manually mark them as paid. You cannot print checks directly from Wave to pay your bills like you can with QBO.

Connect Bank & Credit Card Accounts

You can connect all your bank and credit card accounts to Wave, just like you can with QuickBooks. Wave does not limit you to a certain number of transactions or accounts like QBO Self-Employed and Simple Start do.

Payroll Processing

Similar to FreshBooks, Xero, and QBO, Wave makes it easy to add payroll processing, but there is an additional cost. Wave Payroll allows you to process paychecks as well as calculate and file payroll taxes and forms.

Wave Payroll Fees

Accept Online Payments

Wave allows you to accept online payments from customers. Similar to QuickBooks Payments, Wave Payments integrates seamlessly with Wave accounting software. Once you activate Wave Payments, you can send invoices to your customers that include a pay button they can use to make payments via ACH, debit card, or credit card.

Wave Payments Processing Fees

Prepare Key Financial Statements

When it comes to financial reports, Wave has a number of detailed reports to help you stay on top of your business’ health. Similar to QuickBooks and Xero, Wave lets you run a profit and loss statement, balance sheet, and a statement of cash flow report.

What Wave Is Missing

Like FreshBooks, Wave falls short when it comes to managing unpaid vendor bills. Because you cannot pay your bills directly from Wave, entering and paying bills is a completely manual process.

Wave Reviews

Wave online reviews show that users like the fact that this is a free bookkeeping software. However, they also feel that a significant improvement is needed when it comes to customer service, as live customer support isn’t available. To get help, you need to send an email to the support team and wait for a response.

Zoho Books: Best Accounting Software for Zoho Users

Zoho Books is ideal for existing Zoho users because it integrates with a suite of Zoho products, setting it apart from other accounting software solutions. Instead of using several products to manage your business (e.g., CRM, inventory), you can connect a Zoho app and it automatically syncs with Zoho Books. Pricing plans are $9 to $29 per month.

Zoho Books Pricing & Features

Zoho Books is the most economical paid bookkeeping software on our list. The plans cost between $9 and $29 per month versus the QuickBooks plans, which run between $15 and $150 per month.

All Zoho Books plans include:

• Ability to give multiple users access to the financial records
• Allows for bank and credit card account feeds
• Provides the capability to accept online payments
• Supports key financial reports (e.g., profit and loss, balance sheet)

Zoho Books Accounting Software Plans Comparison & Summary

Zoho Books Basic Plan

Zoho Books Basic is excellent for a small business that has no more than 50 customer, vendor, and employee contacts to manage. Because the plan doesn’t have accounts payable functionality, it works best for those businesses that pay most of their bills using a debit card, credit card, or automated clearing house (ACH) payments.

Zoho Books Standard Plan

Zoho Books Standard is perfect for a growing business that has fewer than 500 customer, vendor, and employee contacts to manage. Unlike the Zoho Basic plan, the Standard plan lets you manage your open accounts payable balances by entering bills, paying bills, and running an accounts payable aging report to see open balances.

Zoho Books Professional Plan

Zoho Books Professional is optimal for small businesses with more than 500 customer, vendor, and employee contacts. In addition to allowing an unlimited number of contacts, Professionals also allows ten users access to your data versus one user (Zoho Basic) and two users (Zoho Standard).

Based on our minimum criteria, here is how Zoho Books compares to its competition:

Number of Contacts

Similar to FreshBooks, which limits the number of customers you can invoice in two of their four plans, Zoho Books limits not only the number of customers but also vendors and employees that can be managed in two out of their three plans. QuickBooks, on the other hand, allows you to manage an unlimited number of customers, vendors, and employees in all their plans.

Setup & Ease of Use

Zoho Books is very easy to set up and navigate. Because it doesn’t have all the bells and whistles that QuickBooks has, you can setup your chart of accounts, products, and services lists pretty quickly.

Manage Accounts Receivable

All Zoho Books plans allow you to manage full-cycle accounts receivable. This includes creating custom invoices, managing customer payments, and staying on top of balances due with the accounts receivable aging report.

Manage Accounts Payable

Zoho Books Basic is similar to QBO Self-Employed and Simple Start in that it does not include accounts payable functionality. This means that you cannot enter and pay your bills with the Zoho Books Basic plan. However, you can with the Zoho Books Standard and Professional plans.

Connect Bank & Credit Card Accounts

You can easily connect all of your bank and credit card accounts to Zoho Books. Unlike QuickBooks Self-Employed and Simple Start, none of the Zoho Books plans limit the number of accounts or transactions you can process.

Payroll Processing

Payroll processing is another area where Zoho Books falls short. Currently, it is only able to process payroll for employers in California, Texas, and India. Unlike their other possibilities, Zoho Books is not compatible at this time with any other payroll apps.

Accept Online Payments

All Zoho Books plans allow you to offer your customers the ability to pay their invoices online. Similar to other accounting software, Zoho Books has an apps center where you can find a payment app to connect to your Zoho Books account.

Prepare Key Financial Statements

You can prepare the three key financial statements in Zoho Books: profit and loss, balance sheet, and statement of cash flows. Additionally, you can run detailed sales reports and expense reports.

What Zoho Books Is Missing

The biggest drawback to using Zoho Books is the fact that the payroll processing is limited to California, Texas, and India. As a result, if you decide to use Zoho Books, you will need to use a payroll service like Gusto to pay your employees.

Zoho Books Reviews

Zoho Books user reviews show that consumers like how easy and affordable the product is for small businesses. However, Zoho Books users don’t like that they cannot process payroll for their employees through Zoho Books.

QuickBooks Premier: Accounting Software for Niche Industries

QuickBooks Premier is a desktop software that meets all eight of our criteria and is ideal for nonprofits, manufacturers, professional service businesses, contractors, and retailers that make less than $1,000,000 in annual sales and have no more than 20 employees. For a one-time fee of $499.95, QuickBooks Premier comes with a customized chart of accounts and custom reports for the above-mentioned industries.

ZipBooks: Bookkeeping Software for Startup Businesses

ZipBooks is best for startup businesses that are currently using an Excel spreadsheet or other antiquated methods to keep track of its income and expenses. The ZipBooks Starter plan is free, and their paid plans run between $15 and $35 per month. Their top-tier plan, ZipBooks Accountant, is a custom pricing tier for accountants with multiple clients. ZipBooks meets all but two of our criteria—it does not track accounts payable and you cannot process payroll for employees.

ZipBooks’ features helped it earn a spot on our list of best free accounting software. ZipBooks Online Reviews show most users regard ZipBooks positively.

Bonsai: Alternative Accounting Software for Freelancers

Bonsai is best for freelancers who submit proposals to prospective clients and write contracts. Bonsai’s contract functions go a step further by allowing you to customize contracts from within the software, have them signed electronically by your client, and then store them online.

Bonsai offers plans starting at $16 per month. It does not include payroll functions because it was specifically designed for freelancers, but it does offer unlimited clients and proposals as well as time tracking tools.

Bonsai is another QuickBooks Alternative to consider if you’re a busy freelancer.

GoDaddy Online Bookkeeping: Bookkeeping Software for Online Retailers

GoDaddy Online Bookkeeping (GOB) is best for online retailers and ecommerce sellers. Plans start at $4.99 per month with their Get Paid plan and tops out at $14.99 per month with their Premium plan.

As an online seller, you probably sell on multiple platforms. GOB comes out of the box with Amazon, Etsy, eBay, and PayPal sync capabilities, allowing you to consolidate your online sales in one place for a high-level overview of your business’ financial health. Although it is capable of syncing with multiple online platforms, GOB works particularly well for Amazon Sellers.

GoDaddy Online Bookkeeping user reviews offer insight into the pros and cons of the software. Most users found the package useful, while some users found its customer support to be lacking.

How We Evaluated Accounting Software for Small Businesses

We looked at over three dozen accounting software products and compared them based on cost and user friendliness as well as their ability to pay bills, invoice customers, pay employees, accept online payments from customers, connect bank and credit card accounts, and run key financial statements.

Listed below are eight areas we used to evaluate the best small business accounting software:

• Cost: The software should be affordable for small to large-size businesses.
• Setup and ease of use: Anyone without bookkeeping knowledge should be able to set up and use the program.
• Manage accounts receivable: The solution has the ability to create invoices and track payments.
• Manage accounts payable: The package allows you to enter and pay bills.
• Connect bank and credit card accounts: You can download transactions from your bank or financial institution.
• Payroll processing: The system includes payroll processing or the ability to add it when you are ready to hire employees.
• Accept online payments: The software allows customers to pay their invoices online.
• Prepare key financial statements: Supports generating profit and loss, balance sheet, and statement of cash flow reports.

Based on the above criteria, we recommend QuickBooks Online as the best small business accounting software. QuickBooks has a pricing plan that fits most small to medium-sized business (SMB) budgets and can meet its business needs whether it is a freelance business or a large corporation.

Bottom Line

Now that we have presented you with our nine best small business accounting software options, it’s time for you to choose one. If you’re looking for an accounting software that you won’t outgrow anytime soon and one that your tax professional or accountant will most likely be familiar with, go with QuickBooks Online.

QBO allows you to manage all aspects of your business, including accounts receivable, accounts payable, payroll, and online customer payments. Don’t just take our word for it; visit our accounting software reviews page to see what users are saying about QBO. As a Fit Small Business reader, you may qualify for a discount of up to 50% off a paid subscription.

Visit QuickBooks Online