Tracking accounts payable and accounts receivable, keeping tabs on cash flow, and being ready for tax time are all important for your small business. But let’s be honest. Handling your bookkeeping and accounting using Excel spreadsheets isn’t ideal. At best, it’s time-consuming, and at worst, it’s frustrating and unreliable.
This is where software can save the day, cutting down on time spent on data entry and reducing errors that could negatively impact your financial health. But with so many options to choose from, how can you know which one is best for your business? We’ve compiled a list of the best bookkeeping software to help you decide.
The best bookkeeping software for small businesses
Here are the top eight bookkeeping and accounting software options to look into for your small business.
- Most comprehensive DIY software: QuickBooks
- Best free option: Wave Accounting
- Best for ecommerce businesses: GoDaddy
- Best invoicing software: FreshBooks
- Simplest software: Xero
- Best for multiple users: Sage Business Cloud Accounting
- Best for automation: Zoho Books
- Best hands-off solution: Bench
Choosing the right software for your business
What strengths of each of these eight tools make them the best? Let’s consider where they shine in terms of ease of use, features, and pricing.
Most comprehensive DIY software: QuickBooks
Intuit QuickBooks Online is used by thousands of small businesses, and for good reason. This cloud-based software has a robust set of features that can be easily accessed online or through its mobile app.
QuickBooks’ features include:
Invoicing and payments, receipt capture and expense tracking, mileage tracking, cash flow and inventory management, and more. Features vary depending on which plan you choose.
The ability to add additional users including your employees or your accountant to your account and manage their access.
Forums and online training resources to get you up to speed on the right way to use this tool.
Integrations with QuickBooks Payroll, as well as third-party apps like Square, Stripe, and PayPal.
Depending on the features you need, you’ll want one of QuickBooks’ four monthly plans:
Simple Start - $25 per month for basic features such as income and expense tracking, invoicing, general reports, and sales and sales tax tracking.
Essentials - $50 per month for everything in Simple Start, plus up to three users, time tracking, and bill pay.
Plus - $80 per month for everything in Essentials, plus up to five users, inventory tracking, and project profitability tracking.
Advanced - $180 per month for advanced features, including up to 25 users, automation, a dedicated accounts team, and exclusive premium apps.
QuickBooks Online is a great place to start if you want to streamline your bookkeeping and accounting.
Best free option: Wave Accounting
If you’re a freelancer or a service business that doesn’t need inventory management or payroll-related features, Wave Accounting may be a good option for you. You can access Wave’s free accounting software either online or on the mobile app, and give your accountant easy access to your reports at year-end.
Features of Wave Accounting include:
Income and expense tracking, financial reporting including profit and loss statements, invoicing, and receipt scanning.
Premium add-ons such as payment processing, payroll, and payroll taxes.
The ability to add unlimited partners, collaborators, or accountants.
Unlimited bank account and credit card connections.
Integrations with Stripe, Shopify, HubSpot’s CRM, and more.
Besides the free accounting features, Wave offers additional paid features as follows:
Payment Processing - 2.9% + 30¢ per transaction for Visa, Mastercard, Discover; 3.4% + 30¢ per transaction for American Express; 1% ($1 minimum fee) per ACH bank payment.
Payroll - $20 or $35 monthly base fee (depending on what state your business operates in) + $6 per active employee and $6 per independent contractor paid.
Wave offers a nice balance for those who want to keep accounting costs low while still having access to additional features if needed.
Best for ecommerce businesses: GoDaddy
Did you know that besides web hosting and website creation solutions, GoDaddy also offers accounting software? It’s incredibly user-friendly, with setup taking mere minutes and zero accounting knowledge required.
The features of GoDaddy’s online bookkeeping software include:
Estimates, one-time and recurring invoices, payment acceptance through your mobile device, mileage and time tracking, and business reports such as profit and loss statements.
Syncing to Amazon, Etsy, eBay, PayPal, and other ecommerce business accounts.
GoDaddy offers three straightforward monthly plans:
Get Paid - $4.99 per month for invoicing, estimates, payments, time tracking, mileage tracking, and the current year’s business reports.
Essentials - $9.99 per month for everything in Get Paid, plus unlimited business reports, tax worksheets, and automatic sales and transaction imports.
Premium - $14.99 per month for everything in Essential, plus the option to create and send recurring invoices.
While it doesn’t offer features such as payroll management or advanced automation, GoDaddy is a great option if you’re an ecommerce seller.
Best invoicing software: FreshBooks
If you need a simpler way to create and keep up with what seems like a million and one invoices, Freshbooks may be the tool for you. It offers a greater level of customization than most other accounting software, and it requires little to no experience to use.
Freshbooks’s customizable features make it easy to:
Send out estimates, customize unlimited invoices, send payment reminders and add late fees automatically, manage project budgets, and accept deposits and payments.
Bill clients in multiple currencies, languages, and on a subscription or retainer basis.
Integrate tax apps, filing tools, and other tools you use, such as Gusto, GSuite, and even Bench.
In addition to discounted yearly plans, Freshbooks offers a range of monthly plans:
Lite - $15 per month for basic features such as invoicing up to 5 clients, tracking unlimited expenses, and accepting credit card payments and bank transfers.
Plus - $25 per month for automatic expense tracking, invoicing up to 50 clients, recurring billing and retainers, business health reports, and the option to invite your accountant.
Premium - $50 per month for unlimited clients, project profitability tracking, bill payment and tracking, etc.
Freshbooks also offers a Select plan with specialized features, including a dedicated account manager, but you’ll have to request a demo if you’re interested. In any case, one of its other three paid plans should be a fit for your business needs.
Simplest software: Xero
Bookkeeping and accounting can be frustrating enough if you’re not a pro. Learning how to use complicated accounting software on top of that is most likely not your ideal solution.
Thankfully, Xero is a simple, straightforward online accounting software with enough functionality to accommodate a small business at any stage of growth.
Xero’s features include:
Invoice and quote sending, transaction reconciliation, bill and receipt capture, cash flow and business snapshots, project tracking, expense claims, and even analytics.
An optional Gusto payroll add-on to calculate pay and deductions, pay employees, and simplify compliance.
Integrations with apps and tools such as Stripe, PayPal, WooCommerce, Pipedrive, and more.
Pricing For Xero’s three plans is as follows:
Early - $11 per month for the basic plan, which includes up to 20 invoices and quotes, five bills, Hubdoc for capturing bills and receipts, bank transaction reconciliation, and short-term cash flow and business snapshots.
Growing - $32 per month for everything in Early, plus unlimited invoices, quotes, and bills, and bulk transaction reconciliation.
Established - $62 per month for everything in Growing, plus support for multiple currencies, project tracking, expense claims, and in-depth analytics.
Its simplicity and scalability make it one of the best online accounting software options available.
Best for multiple users: Sage Business Cloud Accounting
Sage Business Cloud Accounting, like the others we’ve mentioned, is cloud-based accounting software that doesn’t require any accounting knowledge to use. In fact, it recommends the best accounting solutions based on your industry, company size, and unique business needs.
Its features make it easy to:
Create and track invoices, track and forecast cash flow, accept payments, automate admin, manage inventory, track expenses, and more.
Scale with add-ons such as human resources management and estimating.
Add multiple users such as employees to your account, as well as share real-time access with your accountant at no extra cost.
Sync information from your bank and apps such as Typeform, Miro, and Gmail.
Sage Accounting offers two plans:
Sage Accounting Start - $10 per month for creating and sending invoices, tracking accounts receivable, and automatic bank reconciliation.
Sage Accounting - $25 per month for everything in Sage Accounting Start, plus automatic receipt capture, unlimited users, quotes and estimates, cash flow forecasting, and purchase invoice management.
While this tool is designed for small business owners that need to add team members, it also works well for self-employed individuals (with or without employees). And it works for a wide range of industries, so you can use Sage Accounting whether you’re a service-based or product-based business!
Best for automation: Zoho Books
Not only is Zoho Books easy to set up and use, but it’s also easier than most tools to manage due to its focus on automation.
Zoho Books’ robust set of features includes:
One-time and recurring invoicing, online and offline payments, bank transaction reconciliation, automatic tax calculations, reports, 1099 contractor management, and more.
Add-ons such as additional users and advanced autoscans.
Integrations with Zoho Apps, Zapier, Zendesk, and many more.
Zoho Books offers four monthly subscriptions with a host of features:
Basic - Free for up to $50,000 in annual revenue, up to 1,000 invoices per year, one user and one accountant, offline and online payments, expense and mileage tracking, email support, and more.
Standard - $20 per month for everything in Basic, plus up to three users, 5,000 invoices, project expense tracking, additional integrations and customer support options, recurring expenses, and so on.
Professional - $50 per month for everything in Standard, plus up to five users, 10 automated workflows, timesheet tools, project profitability, retainer invoices, and more.
Premium - $70 per month for everything in Professional, plus up to 10 users, 200 automated workflows, custom functions and scheduling, a vendor portal and custom domain, budgeting tools, additional integrations, and more.
With such a wide range of functionality, this tool provides just about everything you need to get control of your business finances now and keep control of them in the future.
Best hands-off solution: Bench
If bookkeeping software still feels like too much work and you decide that DIY accounting isn’t for you, Bench can take these tasks off of your hands. As America’s largest professional bookkeeping service for small businesses, that’s kind of what we do best.
Our Basic plan includes:
- Monthly bookkeeping
- A dedicated bookkeeping team
- Year-end tax ready financial statements
- Direct, unlimited communication with our in-house team of experts
Upgrade to our Premium plan, and you’ll also benefit from unlimited tax advisory services, tax strategy planning, and annual tax filing. Not only can you get back hours of your life with a hands-off bookkeeping and accounting solution, but you can rest easy knowing that your books are error-free.
Learn more about Bench’s pricing and discover which plan is right for you.
Before you commit to any bookkeeping and accounting software
While software can drastically reduce the time you spend keeping on top of your books, remember, they do still take time to manage. Often, this is time that would be better spent focusing on other aspects of your business.
Helpful resource: The ROI of Hiring a Bookkeeper
What’s more, even the best small business bookkeeping and accounting software is only as reliable as the information you enter. If you’re not a trained bookkeeper or accountant, inaccuracies can skew your financial data or even land you in hot water with the IRS.
In many cases, professional services may be a better option than DIY bookkeeping and accounting. A professional bookkeeper can save you even more time than software and ensure the level of accuracy you need to keep your small business running smoothly.