This article is part of a larger series on Accounting Software.
ZipBooks is a cloud-based accounting software that helps you balance your books effectively, get paid faster, and make informed business decisions through actionable insights. Its features include cash and accrual accounting, invoicing and billing, and financial reporting. It’s an ideal software for businesses that have no inventory and only need simple accounting software. It offers a free plan and three paid subscriptions with prices that start at $15 per month.
Are you looking for something different? Check out our list of the best small business accounting software.
ZipBooks Deciding Factors
Supported Business Types
Small businesses with no inventory needing an extremely simple and affordable accounting solution
Chatbot and live chat
Best for: Businesses that need inventory tracking features and COGS
Best for: Businesses that want an outstanding mobile app
Best for: Businesses looking for a free software with unlimited users
Starts at: $30 per month
Starts at: $0 for one user and less than $50,000 in revenue
Read our QuickBooks Online review
Read our ZipBooks vs QuickBooks comparison
Read our Zoho Books review
Read our Wave review
Read our ZipBooks vs Wave comparison
ZipBooks Case Study
We used the case study method to evaluate the fitness of ZipBooks in small business accounting. We emphasized 11 key areas in small business accounting and included other factors, like pricing and user reviews, in the case study. Here are the results of our ZipBooks case study as compared to its direct competitors, QuickBooks Online Essentials and Sage Business Cloud:
ZipBooks vs Competitors FSB Case Study
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ZipBooks Sophisticated $35 per month
QuickBooks Online Essentials $60 per month
Sage Business Cloud Accounting $25 per month
We compared ZipBooks Sophisticated with QuickBooks Online Essentials (a more basic plan than QuickBooks Online Plus) and Sage Business Cloud Accounting (Sage Business Cloud’s highest plan). ZipBooks leads at a price advantage over QuickBooks but is on par with Sage Accounting. ZipBooks’ strongest points in accounting features are reporting and accounts receivable (A/R).
Overall, we see ZipBooks’ highest plan lagging behind the comparably priced QuickBooks Online Essentials, especially in Banking, A/P, and A/R. However, while QuickBooks Online Essentials is limited to three users, ZipBooks Sophisticated allows unlimited users.
ZipBooks has three plans for business use and one plan for accountants. The Accountant plan has everything in the Sophisticated plan but is intended only for accountants who handle many clients.
Pricing & Features
Connected Bank Accounts
Customized Chart of Accounts (COA)
ZipBooks offers competitive features that can be seen in other accounting software products. In this review, we’ll examine ZipBooks Sophisticated’s features to help you determine if it’s a good fit for your business.
ZipBooks offers a fresh and clean look right out of the box. The dashboard is clean and informative. On the right side, you can see a quick access menu. If you want to see the complete list of actions, you can click “More” on the top right portion of the dashboard beside the bell icon:
Setting up your company in ZipBooks is easy. The settings aren’t too technical, and you can adjust your company name, details, and other information in the Company settings module. In the Accounting Preferences section, you set crucial accounting settings, such as accounting basis and closing date of the books.
What’s missing in the company setup process included recording a fiscal year-end, setting an entity type, and importing beginning account balances. The only way to record a beginning balance in an account is with journal entries:
ZipBooks has a default COA set up once you purchase the software. However, users of the Sophisticated plan can add more accounts, like valuation accounts for depreciation, amortization, and bad debts. We found out that the COA lacks an Accumulated Depreciation account, so we created an account for it with Fixed Assets as its parent account.
The equity section of the COA is built for a sole proprietorship. However, you can adjust the section by adding corporation accounts like Common Stock, Additional Paid-in Capital, and Retained Earnings.
The accounts payable (A/P) module is under the Transaction tab. Creating vendors in ZipBooks is straightforward, and there’s an option where you can designate the vendor as a 1099 Contractor. When creating bills, you can include items and assign which expense account is debited.
However, we find it inefficient that we can’t tag bills for custom grouping during bill creation. It would be a time saver if we could tag departments or projects all together while creating a bill. Instead, you can only tag bills in the Expense tab:
In the image above, we created a bill for the purchase of widgets. Ideally, the software should ask us to input the quantity of the goods purchased. But in the case of ZipBooks, it only asks for the total cost of the widgets. This makes it impossible for the software to track inventory unit costs and COGS. If you have inventory, then ZipBooks isn’t the right software for you—try QuickBooks Online, which has great inventory accounting.
Creating an invoice in ZipBooks is limited. There are no templates available to choose from, and there’s no way to change invoice colors. However, you can add your logo and create a personalized message below the invoice:
What we like about ZipBooks is that users can add unbilled expenses to customer invoices, which is a feature usually reserved for higher-priced plans like QuickBooks Online Plus. But in ZipBooks Sophisticated, priced at $35 per month, this feature is a competitive advantage over similarly priced software.
Partial payment of invoices is allowed in ZipBooks. When a customer partially pays an invoice, ZipBooks will mark the invoice as “Partial” and it’ll show the amount paid side-by-side with the total invoice amount on the invoice screen. Unfortunately, ZipBooks can’t record credit memos to customers.
Reconciling your checking account is also easy—just don’t forget to turn on “Reconciliation” in the account settings. The way ZipBooks presents bank reconciliation is different from what we usually see in other accounting software products. ZipBooks doesn’t show the typical line items in bank reconciliation, like deposits in transit and outstanding checks. Instead, it’ll only show the difference between the book and the bank balance.
To reconcile the balances, just uncheck the items presented by ZipBooks or create an adjustment entry for charges found in the bank statement that haven’t yet made their way to the books.
The downsides to ZipBooks’ banking features are that it cannot produce a reconciliation report and print checks. If you issue checks regularly for vendor payments, we don’t recommend ZipBooks, as it would be inefficient to manually write checks. Instead, check out QuickBooks Online for check printing and outstanding bank reconciliation features.
Project accounting in ZipBooks is commendable and convenient because it has a built-in time tracker. You can create projects, assign a contractor for the project, and tag income and expenses to the project. Billable expenses can be converted into invoices during invoice creation. If your clients need estimates, you can create these in the Invoice tab, and the interface of the estimates form is similar to invoicing.
Unfortunately, you can’t compare estimates to actual project costs in ZipBooks. Xero is our best alternative if you need project accounting features that include a comparison of estimated and actual project costs.
You can create a sales tax item to track sales taxes collected by jurisdiction. However, the program doesn’t provide a very detailed report of your sales tax liability. ZipBooks is also missing any features to help pay your sales tax or file your sales tax return. There will be no separate video for this area since it was already discussed in the A/R and A/P video.
Unfortunately, ZipBooks doesn’t have inventory tracking features. There’s no way to keep track of inventory units ordered and sold, and the software doesn’t record COGS and determine the cost of ending inventory automatically. We recommend choosing QuickBooks Online for its outstanding inventory stock and cost tracking features. Since inventory was discussed in the A/R and A/P video, there’s no dedicated video.
Reporting is one of ZipBooks’ strong points. It can generate the reports that we believe should be available in small business accounting software. Here’s the summary of reports:
Profit and Loss (P&L) Statement
Statement of Cash Flows
Income/Loss by Month
Income/Loss by Customer
Income/Loss by Class
Income/Loss by Location
Income/Loss by Project
Transaction List by Customer
Expenses by Vendor
ZipBooks is generally easy to use. However, it scored low in this category because of its weak customer support options and lack of a support network of independent accountants familiar with ZipBooks.
Also, its customer service isn’t as accessible as that of other accounting software products. It doesn’t offer customer service through phone calls, though you can use the chatbot or chat with a live representative. The live chat feature can be found at the bottom right corner of the screen, and ZipBooks provides an estimate of how long it’ll take to accommodate your inquiries. While waiting for a reply, you can browse through its Help Center to look for a quick fix for your problem.
In terms of overall user experience, ZipBooks is easy for business owners without experience in accounting software, as the interface is clean and not overwhelming. Navigating around the software is a breeze since the interface layout and white background emphasizes the text and buttons within the app.
ZipBooks doesn’t have a mobile app. If you need one, we recommend Zoho Books because it has an outstanding and full-featured mobile app that can send invoices, receive payments, assign expenses, enter bill payments, categorize bank expenses, record time, and view reports.
Those who left ZipBooks reviews rated it highly because they found the software easy to use. However, negative comments mention problems with connecting banks and missing reports.
- Software Advice: 4.49 out of 5 stars based on around 100 reviews
- G2: 4.7 out of 5 stars based on around 80 reviews
Assisted Bookkeeping Options
ZipBooks offers bookkeeping and tax support services. If you have complex bookkeeping needs, ZipBooks can build a custom plan for you.
- Simple Bookkeeping: $125 per month
- A personal bookkeeper
- A ZipBooks plan
- Monthly bookkeeping assistance and financial statements
- Up to five bank or credit accounts
- Expert bookkeeping advice
- Online bookkeeping support
- Multi-classifications Bookkeeping: $145 per month
- All services in Simple Bookkeeping
- Tagging and tracking multiple locations, business units, or classes
- Individual and consolidated financial statements
- Comparison financial statements across all classes
- Vendor and 1099 Preparation: $175 per month
- All services in Simple Bookkeeping
- Tagging or tracking of vendor payments
- 1099 reporting and preparation
ZipBooks can integrate with Slack, Google Workspace, Square, Zapier, Pepperi, Zoho Flow, Gusto, and PayPal. It doesn’t have many integration opportunities with third-party apps unless you subscribe to Zapier.
Frequently Asked Questions (FAQs)
Does ZipBooks do payroll?
No, ZipBooks has no payroll features, but you can track time on ZipBooks and sync it with Gusto, a payroll provider.
Is ZipBooks secure?
Yes, it uses 256-bit TLS encryption, which is similar to the encryption used by banks and entities handling sensitive information.
Is ZipBooks legitimate?
ZipBooks is made in Utah. Aside from accounting software, it also offers bookkeeping and tax assistance for a separate fee. It competes with QuickBooks in providing accounting software services to service-based businesses.
ZipBooks offers the basic accounting functions you need for your business, as long as you don’t have significant inventory. The software is easy to use, even for do-it-yourself (DIY) accounting. However, it lacks some advanced features even with its highest plan. We wish we could’ve seen more advanced functions like inventory tracking, purchase orders, and vendor credits—so we recommend ZipBooks for the simple accounting needs of service-based businesses.