Best Small Business Accounting Software in 2023
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.
Eric is a staff writer at Fit Small Business and CPA focusing on accounting content. He spends most of his time researching and studying to give the best answer to everyone.
This article is part of a larger series on Accounting Software.
The best accounting software for your small business are QuickBooks Online and Zoho Books. These two software products provide a wide range of accounting features at an affordable price. But if you’re looking for simplicity and ease of use, FreshBooks and Wave are our top picks. Xero is our choice for large accounting teams, while QuickBooks Desktop is our pick for managing multiple companies.
Here are the eight best accounting software for small businesses:
- QuickBooks Online: Best overall industry-customizable small business accounting software with project, class, and location tracking
- Zoho Books: Best for mobile app accounting
- QuickBooks Desktop: Best desktop accounting software for managing multiple companies
- FreshBooks: Best for small service-based businesses
- Xero: Best for unlimited users
- Wave Accounting: Best free solution for tracking income and expenses
- Bench: Best online bookkeeping service as an alternative to do-it-yourself (DIY) accounting software
- Bill: Best accounts payable (A/P) software for advanced bill pay features and approval workflows
Comparison of Best Small Business Accounting Software
Provider | Pricing | Users Included | Cost per Additional User | Track Locations & Classes | View Inventory Units & Cost | Compute Cost of Goods Sold (COGS) | Assign Costs to Projects | Manage Fixed Assets |
|---|---|---|---|---|---|---|---|---|
 | $30 to $200 per month | 1 to 25 | ✕ | ✓ | ✓ | ✓ | ✓ | Record asset purchase |
 | $0 to $275 per month | 1 to 15 | $3 per month | ✓ | ✓ | ✓ | ✓ | Record asset purchase |
 | $799 to $1,999 per year | 1 to 5 | ✕ | Class Only | ✓ | ✓ | ✓ | Record asset purchase |
 | $17 to $55 or custom priced | 1 only | $11 per month | ✕ | ✕ | ✕ | ✓ | ✕ |
 | $13 to $70 per month | Unlimited | ✕ | ✓ | ✓ | ✓ | ✓ | Dedicated Fixed Asset Manager |
 | Free | Unlimited | ✕ | ✕ | ✕ | ✕ | ✕ | Record asset purchase |
 | $299 or $499 per month | ✕ | ✕ | ✕ | ✕ | ✕ | ✕ | ✕ |
 | $45 to $79 per user, per month | Unlimited | ✕ | ✕ | ✕ | ✕ | ✕ | ✕ |
QuickBooks Online: Best Overall Small Business Accounting Software
QuickBooks Online is our best small business accounting software because of its strong feature set, including the ability to create classes and locations for tracking income and expenses. It’s a versatile program that you can customize to specific industries, such as churches, restaurants, and nonprofits. QuickBooks Online is also easy to use and allows you to share data and files effortlessly with employees, certified public accountants (CPAs), and tax professionals.
With tiered subscription levels, it can scale as your business grows or your needs change—making it the top accounting choice for 5.5 million small business subscribers.
QuickBooks Online now provides new subscribers a one-on-one meeting with a QuickBooks ProAdvisor to set up your company file at no additional charge.
Overall Score:
4.40 / 5
Pros
- Track income and expenses by classes and location
- Excellent inventory tracking with automatic calculation of COGS
- Easy access to local independent QuickBooks ProAdvisors
- Excellent bank reconciliation features
Cons
- A bit expensive compared to other similar software
- Requires Plus subscription to track inventory and project profitability
- Unable to enter bills or record time worked from the mobile app
- Requires one subscription per organization
Pricing & Plans
You can try QuickBooks Online for 30 days or get 50% off for three months if you subscribe immediately:
- Simple Start: $30 per month for one user
- Essentials: $55 per month for up to three users
- Plus: $85 per month for up to five users
- Advanced: $200 per month for up to 25 users
Zoho Books: Best Accounting Software for Mobile Accounting
Zoho Books stands out from the other accounting software with its powerful mobile app. We recognized it as the best mobile accounting app because it can perform advanced accounting tasks in the mobile app, 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.
Overall Score:
4.40 / 5
What We Like
- Fee plan has many features
- Excellent inventory and COGS accounting
- Mobile app can perform almost any accounting function
- Integrates with other Zoho apps easily
What's Missing
- Free and Standard plans limit the number of invoices that can be sent
- Can’t track unpaid bills in the Free and Standard plans
- Could be difficult to find third-party bookkeeping assistance using Zoho Books in the United States
Plans & Pricing
You can try any paid plan for 14 days with no credit card requirement:
- Free: For businesses that make less than $50,000 in annual revenues—includes one user plus one accountant and up to 1,000 invoices per year
- Standard: $20 per month—limited to three users and 5,000 invoices
- Professional: $50 per month—limited to five users with unlimited invoices
- Premium: $70 per month—limited to 10 users
- Elite: $150 per month—limited to 10 users—includes advanced inventory
- Ultimate: $275 per month—limited to 15 users
Add-ons:
- Additional users: $3 per user, per month
- Receipts scanning: $10 for 50 scans per month
- Snail mail credits for sending invoices: $2 per credit
QuickBooks Desktop: Best Desktop Accounting Software for Managing Multiple Companies
QuickBooks Desktop is our desktop accounting solution if you don’t prefer QuickBooks Online. As our best multicompany accounting software, you can manage the books of an unlimited number of companies for a single subscription price. QuickBooks Pro and Premier are the most popular desktop versions of QuickBooks for Windows. For Mac users check out our list of the best accounting software for Mac.
Overall Score:
4.10 / 5
Pros
- 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
Cons
- Desktop software requires installation and setup
- Not as easy to use as a cloud-based accounting software
- Additional users require a separate subscription fee
- Difficult to share books with an external accountant
Plans & Pricing
- QuickBooks Pro: From $37 per month for one user to $122 per month for three users
- QuickBooks Premier Plus: From $799 per year for one user to $1,999 per year for five users
- QuickBooks Enterprise: $1,740 per year for one user, $9,528 per year for 11 to 30 users; customized pricing for 31 to 40 users.
- QuickBooks Accountant: Included with $499 annual QuickBooks’ ProAdvisor membership
QuickBooks Desktop plans don’t include a free trial.
Read our detailed reviews of QuickBooks Desktop versions:
FreshBooks: Best for Small Service-based Businesses
FreshBooks has many project management features beneficial for service-based businesses, such as the ability to create estimates and convert those estimates to invoices once approved, track time spent by team members on a project, and communicate with members through its built-in collaboration tool. Another useful feature is the ability to compare estimated and actual project costs, which isn’t possible with QuickBooks Online.
Overall Score:
3.20 / 5
Pros
- Can compare estimated costs against actual costs
- Track time and expenses and easily add them to customer invoices
- Can send unlimited invoices in all plans
- Has a mobile app for invoicing and accounting
Cons
- Requires an additional fee for an extra user
- Can’t reconcile accounts without bank feeds
- Can’t track activity by class
- Lacks inventory management
Plans & Pricing
- Lite: $17 per month; up to five billable clients
- Plus: $30 per month; up to 50 billable clients
- Premium: $55 per month; unlimited billable clients
- Select: Custom pricing for unlimited billable clients and specialized features
FreshBooks is now available at 70% off for three months.
Add-ons available:
- Additional team members: $11 per person, per month, in all plans
- Gusto Payroll (separately billed from Gusto)
- Advanced payments at $20 per month (for Plus, Premium, and Select plans only)
You might enjoy our free FreshBooks tutorials for an in-depth view of how to use the platform.
Xero: Best Accounting Software for Unlimited Users
Xero is a cloud-based accounting software with features similar to QuickBooks and Zoho Books. However, unlike those two, all Xero plans include unlimited users. If you need multiple seats to access and work on your accounting software, then this provider is an ideal choice. Its features are comparable to QuickBooks, and it’s considerably less expensive, making it one of our best alternatives to QuickBooks.
Overall Score:
4.00 / 5
Pros
- All plans include unlimited users
- Can manage and track fixed assets
- Strong project accounting features
- Excellent inventory management
Cons
- Limited invoices and bills in the Early plan
- Cannot keep the books for multiple companies
- No customer service via telephone
- Features in the mobile app are limited compared to Zoho Books
Pricing & Plans
You can try any Xero plan for 30 days.
- Early: $13 per month for up to 20 invoices and five bills
- Growing: $37 per month for unlimited invoices and bills
- Established: $70 per month for unlimited invoices and bills plus project accounting
Check out our free Xero courses to learn how to make the program more useful for your business.
Wave Accounting: Best Free Solution for Tracking Income & Expenses
Wave is our best free solution for small business accounting and our overall best free accounting software. The plan includes free bookkeeping, invoicing, and expense tracking. Wave is suitable for freelancers and very small businesses that don’t need to track inventory.
Overall Score:
2.60 / 5
Pros
- Easy to setup and use
- Tracks invoices and expenses
- Receipt scanning
- Unlimited users with different roles
Cons
- No inventory accounting
- Not scalable in the long run
- Can’t reconcile bank statements when timing differences exist
Plans & Pricing
Wave is free for accounting and invoicing. However, they may charge you transaction fees when processing payments within the app.
Bench: Best Online Bookkeeping Service as an Alternative to DIY Accounting Software
Bench, our best online bookkeeping service, enables you to focus on more important business tasks. It can be customized to different industries, including real estate. For only $299 monthly, Bench costs far less than you would pay a local independent bookkeeper, and you can even add on tax filing and advisory services.
Pros
- Very affordable bookkeeping service
- Add customized reporting starting at $100 per month
- All plans include tax-ready financial statements
- Tax filing will be very simple using its Premium plan
Cons
- You’ll still have to issue your own invoices
- Proprietary software could make it hard to switch to another provider
- Software doesn’t sync with QuickBooks for invoicing
Plans & Pricing
Annual contract:
- Essential: $299 per month
- Premium: $499.99 per month; includes income tax advice and return filing
Pay-as-you-go:
- Essential: $349 per month
Add-ons:
- Historical bookkeeping: Catch up prior bookkeeping periods for $299 per month
- Specialized bookkeeping: Track A/R, A/P, or segments starting at $100 per month
For freelancers, you may want to read our best online bookkeeping services for freelancers to know which service provider can cater to your bookkeeping needs as a freelancer.
Bill: Best A/P Software for Advanced Bill Pay Features & Approval Workflows
Bill (formerly known as Bill.com) makes it easy for businesses to track and pay large numbers of bills quickly and easily by importing bills from email automatically and allowing for a customized approval process—which is why it’s our top-recommended A/P software. Bill also integrates easily with QuickBooks Online and Xero.
Pros
- Auto-import of bills saves hours of data entry
- Great approval process
- Affordable pricing for a few users
- Direct connection with vendors and customers that also use bill.com
Cons
- Can be expensive if you need many users
- A/R functions are pretty basic
- Not a full accounting software
Plans & Pricing
- Pay Bills: From $45 per user, per month
- Get Paid: From $45 per user, per month
- Pay Bills & Get Paid: $79 per user, per month; customize for enterprises
Accounting Software for Niche Industries
Some industries have accounting needs that require specialized software. Here are our top picks for niche industries:
Niche Accounting Software | Description |
|---|---|
Triple reconciliations between bank statements, client ledgers, and client trust accounts make it our best law firm accounting software. | |
Our pick for the leading church accounting software combines great church management software with accounting software at a low price. | |
It’s our top-recommended restaurant accounting software because of its great restaurant management and solid accounting tools. | |
While it’s fairly expensive for small businesses, it’s incredibly powerful and is even our best cryptocurrency accounting software. | |
This is our top accounting practice management software for its robust feature set and strong integration with programs like QuickBooks, Lacerte, and Microsoft 365. | |
This is our best hotel accounting software because of its extensive features in hotel management and accounting. The mix of real-time reporting and hotel management makes this software a two-in-one solution for hotel accounting and management needs. |
How We Evaluated Small Business Accounting Software
5%
Pricing
7%
General Features
7%
Banking
7%
A/P
7%
A/R
10%
Inventory
10%
Project Accounting
4%
Tax
4%
Reporting
30%
Ease of Use
5%
Mobile App
4%
User Reviews
5% of Overall Score
In evaluating pricing, we considered the billing cycle (monthly or annual) and number of users.
7% of Overall Score
This section focuses more on first-time setup and software settings. The software must be quick and easy to set up for new users. Even after initial setup, the software must also let users modify information like company name, address, entity type, fiscal year-end, and other company information.
7% of Overall Score
The banking section of this case study focuses on cash management, bank reconciliation, and bank feed connections. The software must have bank integrations to automatically feed bank or card transactions. The bank reconciliation module must also let users reconcile accounts with or without bank feeds for optimal ease of use. Lastly, the software must generate useful reports related to cash.
7% of Overall Score
The A/P section focuses on vendor management, bill management, bill payments, and other payable-related transactions. A/P features include creating vendors and bills, recording purchase orders and converting them to bills, creating service items, and recording full or partial bill payments.
7% of Overall Score
This takes into account customer management, revenue recognition, invoice management, and collections. The software must have A/R features that make it easy for users to collect payments from customers, remind customers of upcoming or overdue invoices, and manage customer obligations through analytic dashboards or reports.
10% of Overall Score
Businesses with inventory items should choose accounting software that can track inventory costs, manage COGS, and monitor inventory units.
10% of Overall Score
Service or project-based businesses should choose accounting software that can track project costs, revenues, and profits. The software must have tools to track time, record billable hours or expenses, send invoices for progress billings, or monitor project progress and performance.
4% of Overall Score
In this section, we’re looking at sales tax features. The software must have features that allow users to set sales tax rates, apply them to invoices, and enable users to pay sales tax liability.
4% of Overall Score
Reports are important for managers, owners, and decision makers. The software must have enough reports that can be generated with a few clicks. Moreover, we’d also like to see customization options to enable users to generate reports based on what they want to see.
30% of Overall Score
Ease of use gets the highest weight in this case study because we want to give more credit to easy accounting software. For this section, we considered customer service, support network, and a subjective expert opinion score. Users must have easy access to customer service channels in case of problems, questions, or assistance.
Support network refers to a community of software users that can extend professional help to businesses. Having an independent software expert perform the bookkeeping is good for overall ease of use. And lastly, our expert opinion score is our subjective rating based on our experience in trying the software.
5% of Overall Score
The software must also have a mobile app to enable users to perform accounting tasks even when away from their laptops or desktops.
4% of Overall Score
We went to user review websites to read first-hand reviews from actual software users. This user review score helps us give more credit to software products that deliver a consistent service to their customers.
*Percentages of overall score
We evaluated the best small business accounting software using a case study framework that we developed to objectively assess the products we recommend. There are 12 categories in this case study:
Why You Need Small Business Accounting Software
Approximately 64% of business owners do their own bookkeeping and 5.5 million users worldwide use QuickBooks Online to streamline their operations. To achieve financial stability, small businesses can use bookkeeping software that helps them make informed decisions.
Here are the reasons why you need to have small business accounting software:
- Automation: Small business accounting software automates accounting processes whenever you enter an invoice, expense, sale, or cash transaction. You don’t need to update ledger accounts because the software performs this already. Moreover, generating reports is faster.
- Integration: Most small business accounting software integrates with third-party apps to facilitate data transfer and enhance the experience. For example, connecting your ecommerce platform to the accounting software facilitates the faster transfer of sales and cost data for bookkeeping.
- Data security: Most accounting software has security features to protect accounting data from breaches and unauthorized access. Accounting software products have higher security than spreadsheets because data is encrypted to prevent accidental deletion or theft.
- Scalability: In case you need to transfer from one accounting software to another, most small business accounting software allows migration. For example, migrating from QuickBooks Online to QuickBooks Desktop is possible.
How Small Business Accounting Works
All businesses should have accounting software that can bill customers, help manage their bills, track their payments, and provide reports to see how a 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 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 & 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 A/P aging report, grouping bills by how long they’re overdue.
Reporting
At the very least, your accounting software should print a profit and loss (P&L) statement 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.
Frequently Asked Questions (FAQs)
What is the best small business accounting software?
QuickBooks is by far the most popular small business accounting software in the US. However, there are some less expensive alternatives to QuickBooks you should consider.
How much does small business accounting software cost?
Prices range from $0 to $200 per month for cloud-based software. Desktop accounting software can go as high as more than $1,000 per month, depending on the number of users included in the plan.
What is the difference between cloud-based and on-premise accounting software?
Cloud-based software like QuickBooks Online allows you to access your books from the internet. On-premise programs like QuickBooks Desktop can be accessed only from the computer where it’s installed. Read our comparison of QuickBooks Online vs QuickBooks Desktop to learn more.
Is free accounting software good for my business?
If you only need basic accounting features like income and expense tracking, then you may benefit from free accounting software. Some free accounting programs, such as Lendio Accounting, also offer great invoicing functions.
Do I need to be an accountant or bookkeeper to use accounting software?
No, you don’t. There is some easy-to-use accounting software that doesn’t require prior bookkeeping experience. Examples are QuickBooks Online, Lendio Accounting, and FreshBooks. However, to get the most out of accounting software, we recommend that you work closely with your accountant.
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, it 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 is more suitable. If your business needs special industry features, you choose one of QuickBooks Desktop Premier’s five industry-specific editions.
