Accounting software helps small businesses keep track of their income and expenses so they can stay on top of their operations and file accurate tax returns. We looked at a range of options and found the top five best small business accounting software products. Read this guide to see what’s best for you.

Top 5 Accounting Software Options for Small Businesses

How We Determined Which Accounting Software Is Best

The best small business accounting software products are functional as well as easy to use. Typically, good accounting software can help you track all of your business income and expenses, including running detailed financial reports. Further, the best accounting software for small businesses should be both easy to use as well as have a wide network of qualified individuals who can help you if needed.

We therefore assessed our top five picks in the following key features:

• Create customer invoices
• Pay bills
• Connect bank/credit card accounts
• Prepare key financial statements (e.g., Profit and Loss, Balance Sheet, Statement of Cash Flows)

Overall, we believe that QuickBooks Online is the best option for small businesses. They have as many as four tiers of products, including a self-employed option. QuickBooks Online also has a robust option at $60 per month and is great for any organization, from single-member businesses to larger corporations.

Best Overall Small Business Accounting Software: QuickBooks Online

QuickBooks Online is great for businesses of all shapes and sizes, especially for businesses that are quickly growing and expanding (or expect to do so in the future). This is because QuickBooks Online has a product for anyone, from a sole proprietor to an LLC, S- or C-corporation.

For example, in addition to basic capabilities like invoicing customers, paying bills, and running financial statements, QuickBooks Online has advanced features like inventory tracking and the ability to create budgets. Further, once you hire that first employee, turning on the payroll feature is as simple as going to the “Employees” tab and clicking the “Add Payroll” button to get started.

When you’re ready to accept credit card payments from your customers, you can sign up for an Intuit Merchant Services account by clicking on the “Add Payments” button. These services do come with an additional cost, but the good news is that you can add them without upgrading to a new version.

QuickBooks Online Pricing

Listed below are the four QuickBooks Online pricing plans:

• QuickBooks Self-Employed – $10 per month
• QuickBooks Simple Start – $15 per month
• QuickBooks Essentials – $40 per month
• QuickBooks Plus – $60 per month

We recommend using QuickBooks Online Plus, which is the most popular version. However, if you don’t need to track inventory, create budgets or pay 1099 contractors, then you can save a few bucks and sign up for the Essentials or Simple Start subscription.

QuickBooks Online Features

Core features of QuickBooks Online Plus include:

• Track income and expenses
• Import bank/credit card transactions
• Manage accounts receivable (money due from customers)
• Manage accounts payable (money owed to suppliers)
• Track inventory
• Prepare and issue 1099s
• Prepare key reports, including Profit and Loss, Balance Sheet and Cash Flow Statement

What Sets QuickBooks Online Apart from Its Competitors

QuickBooks is like the McDonald’s of the accounting industry. QuickBooks serves more than 42 million customers in North America, Europe, Australia and Brazil. With that said, it would be hard to find a bookkeeper, CPA or tax professional who has never heard of QuickBooks. (Tip: If you do….run the other way.)

Accounting software is different from other types of software because you’ll be giving your bookkeeper or accountant access to your information. It’s important that you use software that these people will be familiar with, and that’s almost guaranteed with QuickBooks. As your business grows, you can be confident that QuickBooks will grow with your business.

To get up and running on QuickBooks, check out our free QuickBooks Course. It includes 39 video tutorials on how to setup and run your business with QuickBooks. If you’d like to read reviews on the software, check out our QuickBooks review page.

Where to Get QuickBooks Online

QuickBooks Online offers a free 30-day trial or up to 50% off the purchase directly on their website. Simply head over, sign up, and take the product for a test drive.

Visit QuickBooks Online

Best for Solopreneurs & Freelancers: FreshBooks

FreshBooks is perfect for solopreneurs and freelancers, especially those who invoice their customers or who need to keep track of hours worked by project. FreshBooks makes it easy to create customizable invoices and allow customers to pay them online. In addition, their project tracking system makes it easy to track the hours you work, including any employees and contractors you may have now or in the future.

FreshBooks Pricing

Below are the FreshBooks pricing plans available:

• FreshBooks Lite – $15 per month
• FreshBooks Plus – $25 per month
• FreshBooks Premium – $50 per month

We recommend using the Plus version of FreshBooks, which allows you to bill up to 50 clients per month. If you have more than 50 clients, then you should go with the Premium edition, which allows you to bill up to 500 clients.

FreshBooks Features

Core features of FreshBooks include:

• Create custom invoices
• Import bank/credit card transactions
• Manage accounts receivable (money due from customers)
• Manage accounts payable (money owed to suppliers)
• Track time and expenses
• Project tracking
• Schedule recurring invoices
• Prepare key reports – Profit and Loss (Balance Sheet and Cash Flow Statement are not available)

What Sets FreshBooks Apart from Its Competitors

Out of all of its competitors, FreshBooks allows you the most flexibility to create invoices that suit your brand. With FreshBooks, you can adjust invoice templates, font and colors. In addition, you can set up automatic payment reminders and automatically charge late fees for overdue customer invoices.

Where to Get FreshBooks

FreshBooks offers a free trial that you can sign up for directly on its website. If you’re looking for a good way to invoice your customers, FreshBooks lets you “create your first invoice for free.”

Visit FreshBooks

Great Alternative to QuickBooks Online: Xero

Xero is an accounting software that offers many, if not all, of the same functionality of QuickBooks Online. If you’re looking for a QuickBooks alternative, this might be the right software for you. Further, if you run a business with five or fewer employees, this might also be a great option.

This is because Xero is one of the only accounting software programs that includes full cycle payroll processing for up to five employees at no additional cost. It is a great alternative to QuickBooks because it includes all of the features that QuickBooks offers plus the ability to process payroll checks, submit payroll tax payments and file your payroll tax forms.

Xero Pricing

Listed below are the three Xero pricing plans:

• Xero Starter – $9 per month
• Xero Standard – $30 per month
• Xero Premium – $70 per month

We recommend using the Standard edition of Xero. However, if you need to pay more than five employees or manage multi-currency transactions, then you should upgrade to the Premium edition.

Xero Features

Core features of Xero include:

• Track income and expenses
• Import bank/credit card transactions
• Manage accounts receivable (money due from customers)
• Manage accounts payable (money owed to suppliers)
• Track inventory
• Prepare and issue 1099s
• Prepare key reports, including Profit and Loss, Balance Sheet and Cash Flow Statement

Check out our free course on How to Set Up Xero for step-by-step instructions on how to get your business up and running on Xero.

What Sets Xero Apart from Its Competitors

While Xero doesn’t offer a free version of their product, they understand that as a small business owner, you are on a budget. In addition to throwing in free payroll, they also allow you to invite an unlimited number of users to access your data, at no additional cost.

With Xero, you have the freedom to give all of your bookkeepers, accountants, contractors, and employees access to your data without your bill going up. If you want to check out what existing users are saying about Xero, check out our Xero review page.

Where to Get Xero

Like QuickBooks Online, Xero offers a free 30-day trial. If you’re interested in seeing how Xero stacks up against the competition, take it for a test drive and decide for yourself if it’s the right product for you.

Visit Xero

Best Free Small Business Accounting Software: Wave

Wave is best for businesses that are on a tight budget because it’s free. We think of it as the best free small business accounting software overall. In fact, Wave is fairly robust for its free price tag and has much of the functionality you’d expect from a small business accounting software package. While there are some limitations, it’s great for sole proprietors and single-member businesses.

Wave Pricing

There is only one edition of Wave and it’s completely free. You can invite an unlimited number of users to view your data and you can set each user up with either “View Only” or “Edit” privileges. However, you cannot grant any user access to your bank/credit card information. As the business owner, you will be the only person who has access to this confidential information.

Wave Features

Core features of Wave include the following:

• Track income and expenses
• Import bank/credit card transactions
• Manage accounts receivable (money due from customers)
• Limited ability to pay bills
• Prepare key reports – Profit and Loss, Balance Sheet (Cash Flow Statement not available)

What Sets Wave Apart from Its Competitors

Wave has easily separated themselves from the pack by offering feature-rich, online accounting software for free. By now I’m sure you are wondering, what’s the catch? OK, here it is: you will see ads on the right side of the screen. But to be honest, after working in the program for an hour, I forgot they were there.

Where to Get Wave

Like we said, Wave is a free service and therefore it doesn’t need a free trial. If you want to take it for a test drive, simply head over to the website and sign up for an account.

Visit Wave

Best Accounting Software for Zoho Users: Zoho Books

Business owners who use one or more Zoho products (e.g., Zoho CRM, Zoho Reports, Zoho Projects, Zoho Expenses, Zoho Inventory) will find this accounting software to be the perfect fit. This accounting software program integrates with the suite of Zoho products, and if that’s what you want, then Zoho Books just might work for you.

Zoho Books Pricing

Listed below are the three Zoho Books pricing plans:

• Zoho Basic – $9 per month
• Zoho Standard – $19 per month
• Zoho Professional – $29 per month

We recommend using the Professional edition of Zoho Books. However, if you don’t need to give access to 10 users, then you can save some money and opt for the Standard plan, which includes two users plus one accountant.

Zoho Books Features

Core features of Zoho Books include:

• Track income and expenses
• Import bank/credit card transactions
• Manage accounts receivable (money due from customers)
• Limited ability to pay bills
• Track inventory
• Prepare and issue 1099s
• Reconcile bank/credit card accounts
• Prepare key reports, such as Profit and Loss, Balance Sheet and Cash Flow Statement

What Sets Zoho Books Apart from Its Competitors

Having a suite of products that work together is what sets Zoho Books apart from their competitors. Instead of using four to five different products to manage various aspects of your business (e.g., CRM, inventory, reports), you can just connect one of the existing Zoho products to Zoho Books and everything syncs up nicely. This is currently something that no other competitor offers.

Where to Get Zoho Books

Zoho Books offers a free 14-day trial, where you can try out the product to see if you like it. For more information, head over to their website to learn more.

Visit Zoho Books

Other Accounting Software Options

While QuickBooks Online, FreshBooks, Xero, Wave, and Zoho Books offer a wide range of options for small to medium-size businesses, freelancers, and self-employed, we wanted to share the full list of products that we considered. Click here to see all of our accounting software reviews.

The Bottom Line

Now that we’ve done the easy part, next comes the hard part—which accounting software should you choose? We feel that QuickBooks Online outshines them all when it comes to scalability and features included for the cost. QuickBooks is also one of the few accounting software products that offers free live telephone and chat support.

Take QuickBooks for a free 30-day test drive to see how easy it is to get your business up and running. You can sign up in minutes and start using it right out of the box.

Visit QuickBooks Online