Best Small Business Accounting Software for 2022
Tim is a Certified QuickBooks Time (formerly TSheets) Pro, QuickBooks ProAdvisor, and CPA with 25 years of experience. He brings his expertise to Fit Small Business’s accounting content.
Mark has researched and reviewed accounting software at Fit Small Business since 2019 and has developed an extensive knowledge of accounting software features and how unique business needs determine the best accounting software.
This article is part of a larger series on Accounting Software.
The best accounting software for small businesses isn’t a one-size-fits-all solution, and your choice will vary greatly by industry and your personal preferences, which we’ll cover in our guide. We selected our top accounting software for small businesses based on pricing, ease of use, and how they perform across various accounting tasks, such as invoicing, project management, and inventory accounting.
Our experts developed an internal case study to evaluate each software application and compare them head-to-head. The results of our case study contributed to the selection of our top six accounting software programs, which are as follows:
- QuickBooks Online: Best overall small business accounting software with project, class, and location tracking that can be customized for any industry (8.8 out of 10)
- Zoho Books: Best accounting software for use on a mobile app (8.7 out of 10)
- QuickBooks Desktop: Best accounting software to manage the books of multiple companies (8.5 out of 10)
- Xero: Best accounting software for unlimited users (8 out of 10)
- Sage 50Cloud Accounting: Best for consolidating financial statements of multiple companies (6.8 out of 10)
- Sunrise: Best free accounting software for businesses needing only basic tracking of income and expenses (5.7 out of 10)
Comparison of Best Small Business Accounting Software
Software | Pricing | Users Included | Excellent Invoicing | Strong Inventory | Solid Project Accounting | Powerful Mobile App |
|---|---|---|---|---|---|---|
 | $25 to $180 per month | One to 25 | ✔ | ✔ | ✔ | ✔ |
 | $0 to $70 per month | One to 10 | ✔ | ✔ | ✔ | ✔ |
 | $349.99 to $1,275 per year | One user per subscription | ✔ | ✔ | ✔ | ✖ |
 | $12 to $65 per month | Unlimited | ✔ | ✔ | ✔ | ✔ |
 | $145.15 to $371.08 (custom pricing for 11 to 40 users) | One to 40 | ✔ | ✔ | ✔ | ✖ |
 | $0 to $19.99 per month | Unlimited (one for Free plan) | ✔ | ✖ | ✔ | ✔ |
Which Small Business Accounting Software is Right for You?
Answer a few simple questions to receive a customized suggestion for the best accounting software for your business.
QuickBooks Online: Best Overall Small Business Accounting Software
QuickBooks Online is our choice for best small business accounting software because of its strong feature set, including the ability to create classes and locations for tracking income and expenses. In our case study analysis, QuickBooks Online also excelled in inventory accounting, bank account management, invoicing, bill management, and reporting.
Despite its sophisticated feature set, it’s easy to use, and you can share effortlessly with employees, certified public accountants (CPAs), and tax professionals. QuickBooks Online is a versatile program that you can customize to industries, such as churches, restaurants, and nonprofits. 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.
QuickBooks Online
Overall Score: 8.80
OUT OF 5
What We Like
- Can track income and expenses by classes and location
- Offers more features than most other cloud-based accounting software
- Easy access to local independent QuickBooks ProAdvisors
- Excellent bank reconciliation features
- Generates a wide range of accounting reports
What's Missing
- A bit expensive compared to other similar software
- Requires Plus subscription to track inventory and project profitability
- Unable to enter bills and record time worked from the mobile app
Pricing & Plans
- Simple Start: $25 per month for one user
- Essentials: $50 per month for up to three users
- Plus: $80 per month for up to five users
- Advanced: $180 per month for up to 25 users
Compare the features of each plan in our QuickBooks Online comparison guide.
Who QuickBooks Online Is Best For
- 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 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.
- 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.
- Invoicing: QuickBooks Online calculates sales tax rates automatically based on the customer address or transaction location.
- Farmers and ranchers: QuickBooks Online’s class and location tracking helps farm managers classify groups of assets or expenses by crop or livestock.
- Mac users: QuickBooks Online’s intuitive design and navigation are optimized for Mac users.
- Accounts payable (A/P): With QuickBooks Online, you can enter new bills easily and track how much you owe your vendors and when bills are due.
- Bank reconciliation: QuickBooks Online has the most comprehensive bank reconciliation of all the leading accounting software programs on the market. You can reconcile transactions by connecting your bank accounts or manually uploading your files of statements.
Features
- Location and class tracking: Set up tags to track your income and expenses across different departments, properties, or locations of your business. You can use this feature to determine which department brings the most money to your business.
- Inventory: Track the cost of inventory on hand and allocate that cost between ending inventory and the cost of goods sold (COGS).
- Project accounting: Create project estimates as well as projects to include income, expenses, and wages. A huge drawback we found in QuickBooks Online’s project accounting is that you cannot compare estimated to actual project costs.
- Invoicing: The best thing about QuickBooks Online’s invoicing feature is that it calculates the sales tax rate automatically to apply to your invoice based on the customer address.
Expert Opinion
It’s hard to go wrong with QuickBooks Online if you can afford the price. It’s very flexible and powerful software that can be customized for nearly any business. The ability to track profit and loss by class and location allows you to see how profitable your business is across different offices, locations, and properties. Another benefit of QuickBooks Online is that you can find a local QuickBooks ProAdvisor in your area easily if you need one. To get the most out of QuickBooks Online, check out our free QuickBooks Online tutorials.
Zoho Books: Best Accounting Software for Use on a Mobile App
Zoho Books stands out from the other accounting software with its powerful mobile app. We recognized Zoho Books as one of the best mobile accounting apps because it can perform almost any accounting task, including sending invoices, accepting online payments, entering bills, and viewing reports. The app also allows the creation of recurring invoices and tracking of time worked, making it our pick for the overall best accounting software for freelancers.
Zoho Books is one of the 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.
Zoho Books
Overall Score: 8.70
OUT OF 5
What We Like
- Includes a free plan with many features
- Phone support and live chat included in all paid plans
- Mobile app can perform almost any accounting function
- Less expensive than comparable QuickBooks Online plans
What's Missing
- Limited number of invoices you can send in Free and Standard plans
- Can’t track unpaid bills in the Free and Standard plans
- Cannot track fixed assets
- Could be difficult to find third-party bookkeeping assistance using Zoho Books in the United States
Plans & Pricing
- Free: $0 per month for one user plus one accountant (For businesses with less than $50,000 in annual revenue)
- Standard: $20 per month for up to three users
- Professional: $50 per month for up to five users
- Premium: $70 per month for up to 10 users
Features
- Mobile app: Mobile accounting is one of Zoho Books’ biggest strengths. The mobile app can perform plenty of accounting tasks, including invoicing, accepting online payments, recording bills and bill payments, categorizing expenses from the bank feed, and viewing financial reports.
- Inventory: Zoho Books has complete features for tracking inventory. You can track inventory on hand, track the COGS, adjust the cost of inventory, and categorize expenses based on vendor details, product details, and stock-keeping unit (SKU).
- Project accounting: Track time worked and assign it to a project or customer, create expenses from a project, and generate an invoice straight from the project.
Expert Opinion
We believe that conducting business with clients on the go is easier when you have a powerful mobile app like Zoho Books. However, that’s not the only thing it can offer, as Zoho Books is also remarkable in other aspects, like inventory and project accounting. Whether you’re a large enterprise needing inventory software or a very small business wanting a free package, Zoho Books can be a great option.
QuickBooks Desktop: Best Accounting Software to Manage Multiple Companies
If you’re hesitant to use cloud-based accounting software because of a poor internet connection or security issues, then locally installed software like QuickBooks Desktop is for you. It’s a desktop-based accounting program that has strong job costing and inventory management features. QuickBooks Pro, Premier, Enterprise, and Accountant, are desktop versions of QuickBooks for Windows. QuickBooks for Mac has similar features to Pro and is one of our best accounting software for Mac. All QuickBooks Desktop editions can be used to keep the books of an unlimited number of companies for a single price. Because of this feature, QuickBooks Desktop is our choice for the best multicompany accounting software. QuickBooks Pro and Premier are the programs that built QuickBooks into the dominating leader in small business accounting software, and they’re still terrific options for many companies.
QuickBooks Desktop
Overall Score: 8.50
OUT OF 5
What We Like
- Doesn’t require an internet connection after the initial setup
- Can manage the books for multiple companies
- Industry-specific editions available with Premier
- Eliminates security issues associated with cloud access
What's Missing
- Desktop software requires installation and setup
- Not as easy to use as a cloud-based accounting software
- Additional user requires a separate subscription fee
- Difficult to share books with an external accountant
Plans & Pricing
Starting in 2022, Quickbooks Desktop is no longer available as a one-time purchase. You must subscribe to the software annually.
- QuickBooks for Mac: $349.99 per year for one user
- QuickBooks Pro: $349.99 per year for one user
- QuickBooks Premier: $549.99 per year for one user
- QuickBooks Enterprise: $1,275 per year for one user
- QuickBooks Accountant: $499 per year for each ProAdvisor
Check out our comparison of QuickBooks Desktop products to see which desktop program is best for you.
Read our QuickBooks Desktop Pro review and QuickBooks Desktop Premier review.
Features
- Multicompany accounting: Manage the books for an unlimited number of companies with a single subscription.
- Advanced inventory management: QuickBooks Desktop offers more advanced inventory tracking than QuickBooks Online. For instance, you can create assembly items to build and track finished goods, which can be useful for manufacturing teams.
- A/P: Know how much you owe your vendors and suppliers and when bills are due. QuickBooks Desktop lets you record new bills and track outstanding bills until they’re paid.
Expert Opinion
If you prefer locally installed software over a cloud-based program and mobile accounting app, then go with QuickBooks Desktop. The QuickBooks Desktop Pro and Premier editions are very powerful accounting software, perhaps even more powerful than QuickBooks Online. However, they’re more difficult to master and don’t provide the advantages of mobile accounting. Read our in-depth comparison of QuickBooks Online and Desktop to choose the best software for your business.
Xero: Best Accounting Software for Unlimited Users
Xero is a cloud-based accounting software application with features very similar to QuickBooks and Zoho Books. However, unlike QuickBooks and Zoho Books, all Xero plans include unlimited users. If you need multiple users to access and work on your accounting software, then Xero is an ideal choice. While its features are comparable to QuickBooks, it’s considerably less expensive, making it our pick for the best alternative to QuickBooks.
Xero
Overall Score: 8.00
OUT OF 5
What We Like
- All plans include unlimited users
- Can manage and track fixed assets
- Strong project accounting features
- Excellent inventory management
What's Missing
- Limited invoices and bills in the Early plan
- Cannot keep the books for multiple companies
- No telephone customer service
- Features in the mobile app are limited compared to Zoho Books
PricingPricing & Plans
- Early: $12 per month up to 20 invoices and five bills
- Growing: $34 per month for unlimited invoices and bills
- Established: $65 per month for unlimited invoices and bills plus project accounting
Features
- Unlimited user access: Xero offers a good value for your money, as all its plans support an unlimited number of users without any extra cost.
- Fixed asset management: What makes Xero unique from other accounting software is its fixed asset manager. With Xero, you can record and track fixed assets, like machinery, vehicles, and equipment, set up depreciation entries, and account for gain or loss from a disposal of a fixed asset.
- Inventory management: Create and track inventory, monitor inventory levels, add inventory items to invoices, and track COGS.
Expert Opinion
Xero’s unlimited user access makes it a great option for collaborative teams. Its fixed asset manager, which is unique among accounting programs, is useful for manufacturing teams that use different kinds of machinery and equipment in their production.
Sage 50cloud Accounting: Best for Consolidating Financial Statements of Multiple Companies
Sage 50cloud, generally referred to as simply Sage 50, is a unique bookkeeping software that’s 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. Sage 50cloud Premium and Quantum editions are very affordable software programs 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.
Sage 50cloud Accounting
Overall Score: 6.8
OUT OF 5
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
- Difficult to use—recommended for professional bookkeepers only
- No option to purchase the software without a subscription
- Subscription is more expensive than similar QuickBooks Premier Plus
- No mobile app
Plans & Pricing
- Pro: $56.08 per month for one user
- Premium: $87.58 per month for one user to $201.58 per month for five users
- Quantum: $145.17 per month for one user to $371.08 per month for 10 users—custom prices for 11 to 40 users.
Features
- Multicompany reports: With Sage50 Cloud’s most expensive plan, you can set up and manage as many companies as you want. Unlike QuickBooks Desktop, Sage50 allows you to consolidate financial statements across multiple companies.
- Bank reconciliation: Reconcile bank accounts by connecting your bank (live feeds) or by manually importing your files of statements.
- Job costing: Track all your projects and jobs in one place, and view budgets, costs, and income from each job to see which project is the most profitable.
Expert Opinion
Sage 50cloud is a good software application that’s easy to use but more expensive than other options. It’ll be harder to find support from third-party bookkeepers than it’s with 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.
Sunrise: Best Free Accounting Software for Basic Tracking of Income and Expenses
Sunrise by Lendio offers free accounting software for do-it-yourself (DIY) bookkeeping. 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. If you’re a small business or a freelancer wanting to know where money is going, you should do well with Sunrise. Sunrise is our pick for overall best free accounting software.
Sunrise
Overall Score: 5.7
OUT OF 5
What We Like
- Free plan contains almost all of Sunrise’s features
- Can set up and manage multiple companies
- Good invoicing feature
- Mobile app can perform many accounting tasks
What's Missing
- No inventory accounting
- Can’t track costs by project
- Cannot reconcile bank accounts
Pricing & Plans
- Free Self Service: Free forever for one user
- Sunrise Plus: $19.99 per month for unlimited users
Features
- Receipt capture: Sunrise lets you capture and store receipts from your browser or with the Sunrise mobile app, helping you organize your expense claims easily.
- Automatic expense categorization: Upgrade to Sunrise Plus to get automatic expense categorization in your bank feed.
- Invoicing: Sunrise’s greatest feature is invoicing. You can create customized invoices, send them on a recurring basis, track sales taxes by jurisdiction, and accept short payments from customers.
Expert Opinion
Sunrise is a great choice if you’re a solo business owner or freelancer looking for a free invoicing solution with basic bookkeeping features. It has a decent mobile accounting app and good customer service. Sunrise’s major shortcoming is that there’s no option to track inventory and project profitability like QuickBooks Online.
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.
Wave
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. Wave is absolutely free yet it offers some of the same features as paid software. It includes bank connections, receipt scanning, and invoicing. It makes money by users adding payroll or merchant services to their accounts, but paid software providers also charge extra for these services.
FreshBooks
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. Read our review of FreshBooks to see if it’s a good fit for your business.
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 make PCLaw the best law firm accounting software. | |
Our pick for best church accounting software combines great church management software with accounting software at a low price. | |
This software is our choice for best restaurant accounting software because of its great restaurant management tools in addition to solid accounting. | |
Our pick for best trucking accounting software manages accounting, dispatch, fuel, inventory, mileage, employees, and vehicles, all in one program. | |
Our choice for overall best accounting practice management software has a robust feature set and strong integration with programs like QuickBooks, Lacerte, and Office 365. | |
Our pick for best time tracking software lets you use its time tracking, scheduling, and basic hiring tools for free. |
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 our 10 bookkeeping and accounting 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 Works
All businesses should have accounting software that can bill customers and track their payments, help manage and track their bills, and provide reports to see how their business is performing. Beyond that, the features needed in accounting software will vary by industry and personal preference.
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 the current inventory on hand is essential. If your company works on large projects (e.g., 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 Small Business Accounting Software
We evaluated accounting software based on pricing, ease of use, and how well it performed against the ideal features we’re looking for, including project accounting, inventory management, and mobile accounting. Our evaluation was based on a rubric scoring methodology in six categories, each with designated appropriate percentages.
Our criteria for choosing our best small business accounting software are as follows:
5%
Pricing
40%
General Features
10%
Inventory
10%
Project Accounting
30%
Ease of Use
5%
Mobile App
5% of Overall Score
We evaluated pricing based on how each plan compares with the other similar software packages, as well as how many users are included in each plan and the extra costs incurred per additional user.
40% of Overall Score
The biggest percentage comes from general features, because the main reason small businesses need accounting software is to automate business processes like banking, accounts payable and receivable, sales taxes, and reporting.
10% of Overall Score
Many businesses are involved in the sales of products, so it’s essential that the best accounting software has a dedicated inventory management system.
10% of Overall Score
At the very least, a good accounting system should include features for tracking project-related costs for labor, materials, services, and inventory items.
30% of Overall Score
In addition to user interface and navigation, we also consider the available customer support options, including live chat and email and phone support.
5% of Overall Score
Mobile apps are evaluated based on their ability to perform certain tasks like invoicing, online payment processing, and expense receipt capture.
*Percentages of overall score
Bottom Line
There are many terrific small business accounting software applications available, but none of them are as versatile and comprehensive as QuickBooks Online. However, QuickBooks Online isn’t always the best solution, especially if you only have very basic needs and wish to save money. If your priority is mobile accounting, Zoho Books might be more suitable. If your business operates in a very specialized industry, you may find QuickBooks Desktop Premier a great choice.
