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 small business accounting software is not a one-size-fits-all solution, so we’ve given you our top nine choices for accounting software.
Top 9 Small Business Accounting Software Options
- QuickBooks Online: Best overall small business accounting software
- Sage Accounting: Best for microbusinesses that need financial statements
- FreshBooks: Best for professional-looking invoices
- QuickBooks Self Employed: Best for freelancers
- Zoho Books: Best integrated business management solution
- Xero: Best for inventory management
- QuickBooks Desktop: Best desktop accounting software
- Wave: Best free accounting software
- Sunrise: Best free software with the option for online bookkeeping assistance
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QuickBooks Online: Best Overall Small Business Accounting Software
QuickBooks Online is a great 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.
 | Features We Like | What’s Missing |
Extensive list of customizable reports | More expensive than most competitors | |
Easy to find a local QuickBooks ProAdvisor for help | Limited users | |
More features than other cloud-based programs | No industry-specific tools | |
Pricing New users can choose between 50% off for three months or a free 30-day trial.
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Our Expert Opinion
QuickBooks Online is our best overall pick and our best easy-to-use accounting software. It has industry-leading features such as online bank connections, receipt scanning, inventory tracking, remote time entry, GPS mileage tracking, free online bill payments, class and location tracking, and comprehensive reporting. QuickBooks Online also offers hundreds of third-party integrations to provide even additional features.
Because QuickBooks Online dominates the small business accounting market, it is easy to find bookkeeping help. You can select an accountant from their worldwide network of more than 200,000 certified QuickBooks ProAdvisors or use Intuit’s virtual bookkeeping service, QuickBooks Live. There is also plenty of help online, including our Free QuickBooks Online Tutorial.
Sage Accounting: Best for Microbusinesses That Need Financial Statements
Sage (formerly Peachtree Accounting) is a major player in the small to medium business (SMB) accounting software market and has been around even longer than QuickBooks. We particularly like its Sage Business Cloud Accounting product as it is a full-function bookkeeping software with a user-friendly, online interface that even the smallest business can afford. You can start your free 30-day trial with no credit card and have access to your online account in just a few minutes.
| Features We Like | What’s Missing |
Unlimited users | Limited advanced features | |
Very affordable | Limited customization of business forms | |
Great list of reports | Cannot customize financial reports | |
Pricing New users can choose between three months at a 50% discount or a 30-day free trial.
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Our Expert Opinion
Sage Business Cloud Accounting is great for users that don’t want to pay for advanced features they don’t want or need. Sage Accounting provides great basic bookkeeping software for a low price. You can send invoices, collect payments, track unpaid bills, and print checks. You can even connect your bank account to import transactions automatically. When it’s time to provide your bank, CPA, or others your financial information, there is a great list of reports to choose from, including a profit and loss and balance sheet.
In addition to missing advanced features like receipt capture and GPS mileage tracking, Sage Accounting does not offer the same level of detailed reporting as some more expensive options. For instance, you can’t track income and expenses by class or location.
FreshBooks: Best for Professional-looking Invoices
FreshBooks was started as a way to produce great-looking, professional invoices and earns our top ranking for best invoicing software. While 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.
| Features We Like | What’s Missing |
Professional invoices | Unpaid bills cannot be tracked | |
Time tracking features | Limited number of clients | |
Project tracking features | Fee for additional users | |
Pricing New users have the choice between a 30-day free trial or 50% off the monthly price for three months.
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Our Expert Opinion
FreshBooks has terrific-looking invoices. Beyond that, their 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 the accrual basis.
QuickBooks Self-Employed: Best Accounting Software for Freelancers
QuickBooks Self-Employed is a scaled-down version of QuickBooks Online that we rank as the best accounting software for freelancers. When purchased in a bundle with TurboTax Self-Employed, your business income and expenses automatically transfer to Schedule C on your personal tax return. As with other QuickBooks Online products, there is no credit card required for the 30-day free trial.
| Features We Like | What’s Missing |
Separate business and personal expenses paid from same the account | Does not track assets and liabilities | |
Calculate and pay quarterly estimated tax payments | Only one user, plus an accountant | |
Transfer income and expense to Schedule C | No add-on for employee payroll | |
Pricing New users can choose between 50% off for three months or a free 30-day trial.
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Our Expert Opinion
QuickBooks Self-Employed offers a simple way for freelancers and other self-employed people to track and categorize their income and expenses without having to track assets and liabilities. While the bookkeeping is simplified, QuickBooks Self-Employed still offers advanced features like receipt scanning, bank connections, and GPS mileage tracking.
Since QuickBooks Self-Employed doesn’t track assets and liabilities, you cannot upgrade a self-employed company file to other versions of QuickBooks Online. So if you plan on incorporating or hiring employees, you’ll be better off using QuickBooks Online from the beginning.
Zoho Books: Best Integrated Business Management Solution
If you already use Zoho apps, such as Zoho CRM, Zoho Inventory, or Zoho Projects, then you’ll love Zoho Books. All of Zoho’s apps integrate 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 Zoho One, which includes all of Zoho’s apps. You can evaluate Zoho Books with a 14-day free trial.
| Features We Like | What’s Missing |
Integrates seamlessly with other Zoho Apps | Cannot track unpaid bills with the Basic edition | |
Includes budgeting module | Receipt scanning requires an additional fee | |
Professional edition includes Vendor portal | Zoho One, which includes all Zoho Apps, is expensive | |
Pricing
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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. Zoho Books is one app that almost every Zoho user should include. It is a very capable bookkeeping system that includes all the standard and advanced features found in most software, plus it fits perfectly with your other Zoho apps.
Xero: Best for Inventory Management
Xero is a comprehensive bookkeeping solution that we rated as the best QuickBooks alternative. Unlike QuickBooks, Xero offers inventory management in all plans, including its Early plan, which is available for only $9 per month with unlimited users. There are other limitations to its lower-priced plans, so you may still need to spend a little more to meet your needs. Xero offers a 30-day free trial without providing a credit card.
| Features We Like | What’s Missing |
Calculate profitability by product line | Tracking inventory by location requires a third-party app | |
Track daily stock levels and values | Available inventory is not reduced by outstanding sales orders | |
All inventory features included with any plan level | Receipt scanning and expense management requires the Established plan | |
Pricing All plans include unlimited users.
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Our Expert Opinion
Xero provides a great, low-priced option for managing inventory. It calculates the cost of inventory using the average-cost method, which is commonly used by taxpayers, but unavailable in QuickBooks Online without an expensive add-on. In addition to inventory features, Xero has all the basic functionality of a good bookkeeping system. Unfortunately, some of the more advanced features included with other software, such as receipt scanning and expense categorization, project tracking, and issuing invoices in multiple currencies, are only available in the highest-priced plan.
QuickBooks Desktop: Best Desktop Accounting Software
There are a dwindling number of desktop accounting programs available today, but QuickBooks Desktop is still going strong and should continue for the foreseeable future. While it has all the limitations of being installed on a single computer, the program itself is probably the most powerful accounting software for small businesses. However, for most companies, the additional power is not worth the cost and losing the flexibility of cloud-based programs.
| Features We Like | What’s Missing |
No internet connection required | Not as user-friendly as QuickBooks Online | |
Industry-specific editions available | Must purchase annual Plus subscription to have unlimited customer support | |
Bookkeeping for an unlimited number of companies for no additional cost | Requires a separate license at full price for each concurrent user | |
Pricing
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Our Expert Opinion
QuickBooks Desktop is powerful software that doesn’t require a constant internet connection, although it does require a connection to install updates and service patches. It takes time to learn, but once you’ve mastered the program, you’ll find that it is much faster to operate than a cloud-based system. Because you can use one license to account for an unlimited number of companies, we awarded QuickBooks Desktop our top ranking for multi-company accounting software.
One area where QuickBooks Desktop is distinct from QuickBooks Online is its support for niche industries. QuickBooks Desktop Premier offers industry-specific software editions for contractors, wholesalers and retailers, nonprofits, professional service firms, and manufacturers. If you’re wondering whether QuickBooks Online or QuickBooks Desktop is better for your business, read our in-depth comparison.
Wave: Best Free Small Business Accounting Software
Wave is a good choice for service-based small businesses. Although Wave is free, its bookkeeping functions and features are good and provide a solid solution for small businesses on a tight budget.
| Features We Like | What’s Missing |
Free forever | No inventory cost tracking | |
Unlimited users | No mileage tracking | |
Run multiple businesses in one account | No time tracking | |
Pricing Free forever with unlimited users | ||
Our Expert Opinion
Wave is absolutely free yet offers many of the same features as paid software. It includes bank connections, receipt scanning, invoicing, and a reasonable selection of reports. It makes money by users adding on payroll or merchant services to their account, but paid software providers also charge extra for these services.
Sunrise: Best Free Accounting Software With an Option for Online Bookkeeping Assistance
Sunrise by Lendio offers a unique approach to bookkeeping by providing a good online accounting software free for any business to use. However, businesses also have the option of purchasing a plan where Sunrise will assist with your bookkeeping by matching bank transactions to categories and reconciling accounts. You can use the software free forever and give the bookkeeping service a try with no contract.
| Features We Like | What’s Missing |
Software is available for free | Virtual bookkeepers provide limited services | |
Ability to outsource bookkeeping | Software is not very well known | |
Run multiple businesses in one account | Only function in mobile app is receipt scanning | |
Pricing
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Our Expert Opinion
Sunrise provides a free option for microbusinesses while providing a service to help eliminate the bookkeeping headache as the firm grows. Switching bookkeeping software is time-consuming and expensive, so it’s best to pick software that will grow with your company.
How to Choose Your Small Business Accounting Software
While most accounting software will provide the basic functions of categorizing revenue and expenses and tracking account balances, there are many things that can vary between programs that you should consider when choosing what’s best for your business.
- Cost: The cost of software will generally increase with the number of features available, so be careful not to pay for features you don’t need. Many of the software choices have a trial period that doesn’t require a credit card, so you can take several programs for a test drive before making your decision.
- User-friendly: Most small business accounting software is user-friendly, but it’s a good idea to take advantage of free trial offers to decide if you like how it operates.
- Invoices: If invoices are important to you, choose a software that will allow you to customize and email invoices that give your business a professional look.
- Online customer payments: Customers will pay much quicker if they can do so online rather than mail a check. Choose software that will integrate with your choice for payment processing.
- Bill tracking and payment: Some software will track unpaid bills, also called accounts payable, and even allow you to initiate an online payment from within the software.
- Payroll: Payroll is a headache that can be outsourced easily at pretty affordable rates. If you have employees, choose software that will integrate with your choice of payroll providers.
- Financial statements: All accounting software will provide a profit and loss (P&L) statement, but some software doesn’t track assets and liabilities and, therefore, cannot provide a balance sheet. Unless you’re organized as a sole proprietorship, you should have a balance sheet compiled at least annually.
- Advanced features: Beyond the basics, some software provides advanced features that can make your life easier, such as receipt scanning, GPS mileage tracking, time tracking, and online bookkeeping services.
- User reviews: It may be helpful to read user reviews of the software you are considering to see strengths and weaknesses other businesses are reporting.
What Small Business Accounting Software Costs
Small business accounting software subscriptions cost about $10 per month for simple accounting software for freelancers up to $150 per month for larger businesses. However, be sure to read our guide to the best free accounting software for some great alternatives for free-forever accounting software.
Some software companies offered special COVID-19 pricing on their accounting software in the spring of 2020, but those deals have now expired. However, all the software reviewed here (except QuickBooks Desktop) offers a free trial. I encourage you to take advantage of the free trials to explore several options before making your final decision. A credit card is not required for any of the trials, so there’s no worry about getting charged when the trial period ends.
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’ finances, good accounting software can save you time.
Consider Industry-specific Accounting Software
Many industries have unique bookkeeping needs and can benefit from industry-specific accounting software. Click on your industry in the list below to find out more about the accounting software options made for your industry:
- Churches: Church accounting software should allow for tracking donor contributions as well as preparing annual giving statements for members’ tax records. Some software options also include church management features that help stay in touch with the congregation and organize events.
- Real estate: A good real estate accounting software solution should allow for mileage tracking, income and expense reporting by property, and include property management features.
- Restaurants: Restaurant accounting software should track sales and expenses for multiple locations or segments, integrate with point-of-sale (POS) software, and allow for tip reporting.
- Construction/contractors: Contractors must be able to track income and expenses by project or job. It’s also helpful to have features to manage subcontractors and track payments to be reported on Form 1099.
- Farmers/agriculture: Farming is a very unique industry, and there are several great specialty software for small farms that include not only accounting but farm management features.
- Nonprofits: Nonprofit accounting software packages should allow for grant fund tracking, detailed reporting, and donor contributions.
- Trucking: Trucking software for accounting should include features for tracking loads, running trip reports, invoicing customers, mileage tracking and reporting, and tracking income and expenses.
- Law firms: Law firms must track billable hours, manage client billing, manage general accounting, and handle trust (IOLTA) accounting, including the required three-way reconciliation between books, banks, and trust accounts.
- Online retailers: The best accounting software for e-commerce has built-in integration capabilities for online sales platforms like eBay, Amazon, and Etsy.
Online Bookkeeping Services
A big trend in small business accounting is the emergence of online or virtual bookkeeping services. Online bookkeepers generally will import your bank and credit card transactions, assign transactions to categories, and match transactions to any existing transactions in your books. At the end of each month, they will reconcile all your bank and credit card accounts and produce financial statements.
With most bookkeeping services, you’ll still be responsible for issuing invoices, receiving payments, tracking bills, and writing checks. Some online bookkeepers will offer some of these services for an additional fee. If you think online bookkeeping might be right for you, explore your alternatives with our Best Online Bookkeeping Services.
Bottom Line
As a small business owner, you must stay on top of your company’s finances, and good bookkeeping software is a major step in that direction. With the exception of QuickBooks Desktop, every software reviewed here provides a no-credit-card-required free trial to evaluate the software. This is an important decision for your company, so use the free trials to evaluate the software for yourself to choose the one that will work best for you.
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