Best Small Business Accounting Software for 2022

• Construction: QuickBooks Online, when integrated with Buildertrend, provides excellent project accounting and construction management tools like employee time and location tracking, customer relationship management (CRM), and a 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.
• Invoicing: QuickBooks Online calculates sales tax rates automatically based on the customer address or transaction location.
• Trucking companies: TruckingOffice provides a great integration that adds fleet management, IFTA tracking, and dispatching to your QuickBooks Online software.
• Mac users: QuickBooks Online’s intuitive design and navigation are optimized for Mac users.
• 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.

• 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 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.
• Bill Pay: Pay your bill electronically directly from your QuickBooks account, powered by Melio.

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 the platform, check out our free QuickBooks Online tutorials.

• 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 and 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.

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 that want a free package, it can be a great option.

• 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.
• Class tracking: Classes can be customized to represent cost centers or enterprises, making QuickBooks Desktop our leading farm accounting software.

If you prefer locally installed software over a cloud-based program and mobile accounting app, then go with QuickBooks Desktop. Its 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.

• 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. 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.

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. A major drawback to Xero compared to QuickBooks Online is the lack of bookkeeping professionals who support Xero. While Xero has 2.3 million users, most of them are located outside of the US.

• 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: This is Sunrise’s greatest feature. You can create customized invoices, send them on a recurring basis, track sales taxes by jurisdiction, and accept short payments from customers.

Sunrise is a great choice if you’re a solo business owner or freelancer looking for a free invoicing solution without the need for professional bookkeeping assistance. It has a decent mobile accounting app and good customer service. If you’re looking for a zero-cost platform that allows more than one user, we recommend Wave. If you need the option to track inventory and project profitability, you’ll need a paid program like QuickBooks Online.

• FreshBooks partnership: Bench is FreshBooks’ largest accounting partner. It can import your invoicing activity from FreshBooks to include in your accounting records.
• Human bookkeepers: You’ll be assigned a dedicated team of bookkeepers who will produce monthly financial reports based on managing and reconciling your bank accounts.
• Tax pros: In the Premium plan, you’ll be assigned a tax pro who is available for unlimited tax consultations and will oversee the preparation of your annual income tax returns.

Bench will take care of the most crucial tasks in your bookkeeping process, which is overseeing the import and classification of your bank transactions and reconciling your bank accounts. Compare the hours of headaches this will save you each month, not to mention they will likely make far fewer mistakes than you. We firmly believe that services like Bench should replace the DIY accounting software that many small business owners wrestle with every month.

However, the service doesn’t completely eliminate your bookkeeping tasks. You’ll still need to issue invoices to your customers, collect payments, and pay your bills. These tasks are closely tied to business, and we believe most business owners like maintaining control over these activities. We recommend Zoho Invoice as a great free invoicing program to use if Bench is doing the rest of your bookkeeping.

• Invoice capture: Bills received via email are transferred to your bill list automatically, where you can modify them and then send them on for payment approval.
• Automatic bill approvers: Bill approvers can be assigned by bill, or you can allow Bill.com to choose approvers based on the settings in your Bill Approval Policies.
• Dedicated approvers page: Approvers have their own login, where they’ll see only bills that have been submitted for their approval.
• Bill payments: Once bills have been approved, you can schedule payment through e-payments, internal wire transfers, or check payments.
• Issue invoices: With the Get Paid plan, you can issue invoices and track the payment of your invoices for customers who use Bill.com.

We recommend Bill.com as it’s a great bill payment solution for managing your accounts payable. Most accounting software comes with some features to manage your bills, but Bill.com goes far beyond these built-in features. Its import process and accuracy is better, and the customized approval process is a must-have for larger organizations.

If you choose to use it for payments, you might also choose to add the Get Paid plan for accounts receivable—but we don’t view that A/R function to be any better than the invoicing features built-in to most accounting software. The only exception is if your customers also use Bill.com, in which case the payment can be collected within the platform and the tracking is done automatically.

According to the Codat Global Accounting Guide, it’s estimated that 64.4% of small businesses use accounting software to streamline their operations. Based on the US Business Bureau Index, 20% of small businesses that don’t use accounting software struggle to survive within their first year. Financial stability can be achieved by joining the 64% of business owners who do their own bookkeeping by using bookkeeping software to compile the information needed to make informed decisions.

You can read our top 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.

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 & Tracking Customer Payments

Your accounting software should be able to issue invoices and track them until they’re 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’re past their due date. Finally, the best accounting software will track inventory, time, and expenses and allow you to add them to your invoices easily 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’re 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 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.

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: