Best Accounting Software For Small Business

Make the most out of their features and try to get to grips with the user dashboards to find the best fit for your small business.

That could be some help with your payroll, the easy production of financial statements, or a mobile application to let you keep track of cash flow.

In this post, we will detail the best accounting software for small business.

This will include what you should expect from your accounting software and detail the best overall as well as the best for ease of use, for micro-businesses, for freelancers, for tracking your inventory, and the best free accounting software.

How Accounting Software Works

The first thing that you need to do with an accounting software program is to sync it up with your business bank account and credit cards.

Once that’s done, the transactions will flow into a queue and then be classified into various categories.

One by one, these transactions will populate your financial statements which can then be run in a matter of seconds to display balances, review your profitability, and compare your revenue with costs.

With that detailed information at hand, a small business owner can make important choices about how to go forward.

Third-party integrations are also important as they allow for a point-of-sale system to capture real data as it comes in as a sales transaction.

This is great news if you have an outlet or a physical shop and want to capture those sales as they come in.

The point-of-sale system can integrate with your accounting software to record those immediate transactions, work out sales tax liabilities, and put each sale into a subcategory for easy categorization.

You can even use a time tracking app with the accounting software so you know how long you have spent on a task and count it as labor to be included on a client invoice.

What You Should Expect From Your Accounting Software

With so much accounting software being readily available, it can be difficult to choose which one to go for.

Several features may, or may not, work for you and your small business so make a note of what you need.

For instance, it may be the case that your small business has employees or contractors and that you need help with payroll.

You may need accounting software that allows you to check your financial data on the move, in which case you will need some accounting software that provides a mobile application.

Judge the accounting software program on how it should reduce the amount of time you spend manually inputting figures and data.

The software should also sync your credit cards with your business bank accounts so you do not have to strike up a relationship every time you want to perform a task for your accounting.

Once your credit cards and business bank accounts are synced up, the software will note down the transactions and categorize them properly so you do not have to. 

While the accounting software should make the tasks easier, you still need to know what to look out for.

Read up about accounting so that if a financial report looks a bit off, you can work out why and rectify it using the software.

If you already have a bookkeeper or an accountant, make sure that they are doing their job by reviewing and maintaining the books.

However, the accounting software should work with them if it is cloud-based so they can access the books when they need to.

Basic functionality that you should expect from your accounting software for a small business includes invoicing, accounts payable, accounts receivable, credit card and business bank account syncing, and online payment collection from your customers.

You should also be able to prepare basic financial statements. These financial statements should make space for balance sheets, profit and loss statements, as well as mention cash flow. 

QuickBooks

Every plan comes with some worthwhile support when you need it and there are over 700 app integrations.

The mobile application is intuitive which is saying something compared to the other offerings.

You can even file CIS returns on their lowest-tiered price plan, but do not take our word for it, over 4.5 million businesses rely on QuickBooks for their accounting.  

The accounting software program comes with a thirty-day trial but you only have to realize how popular it is to know you are onto a winner.

The cloud-based software can be used on a mobile device or via a web browser. QuickBooks can also be seen as an investment as you can upgrade your plan as the small business grows.

The next plan up should allow for further users and more features to better manage your business accounts.

Pros 

• Range Of Plans – Choose from a self-employed plan or their Simple Start for help with pay-enabled invoices and income tax estimates. Then there is the Essentials plan for multi-currency support, multiple users, as well as bill/payment management, or Advanced which allows for full reporting if you want to scale up your accounting.
• Third-party Application Integration – QuickBooks works really well on its own but can be used with third-party applications easily too.

Cons

• Temperamental Syncing – Occasionally, the software does get in trouble when it needs to be used with credit cards and banks.

FreshBooks

From customizable professional invoices to payment options, and automated late payment reminders.

This is a piece of software that takes so much effort out of accounting that you will wonder how you did it before. It also takes card payments and you can see for yourself with a 30-day trial. 

What was originally some invoicing software is now used for accounting and has been used by over 30 million people.

FreshBooks offers individually priced plans such as Lite, Plus, Premium, and Select (which comes with its own custom pricing).

A different number of clients can be billed each month through the differently priced plans so it helps to know the scale of your small business to match it with the right plan. 

Pros 

• Tailored For Business Sizes – The software is adaptable so can be made ideal for self-employed professionals, freelancers, businesses with contractors, or those with employees. 
• Intuitive – A lot of the features like time tracking and invoice creation are done so easily that the software becomes intuitive in nature.
• Affordable Price Points – Depending on your business size, you should be able to find a price point that suits your budget.

Cons

• Limited Mobile Application – Compared to the full software, the mobile application does look to have its limitations.

Wave

An independent contractor, or a freelancer that operates with a limited budget.

The dashboard is designed for the user so it should be easy to maneuver so you can keep a track of your tax affairs way before they are due.

If you want some detail then the app can provide you with a full overview of your financials or help with invoice creation and transaction tracking.

There is also support available if you need help with accounting and bookkeeping.

As free accounting software, you can expect a more basic offering to suit a small business.

Yet those features may be exactly what you need, from the ability to scan receipts to invoicing, income/expense tracking, and financial reporting.

Each feature can be assessed via the mobile application or online. Be aware that payroll and customer payment processing are considered premium features which will cost extra. 

Pros 

• Supports Several Currencies – If you operate overseas then knowing that the app has multi-currency support is a bonus.
• Designed For Small Businesses – The dashboard is user-friendly and the spare selection of features is ideal for a small business that does not have payroll.

Cons

• Invoice Customization Lacking – Though invoice customization is a good feature to have, you are paying for what you are getting.

Xero

Whether it be paying the bills, claiming your expenses, or connecting with a bank.

The software is popular too which is a good sign as there are over 3.5 million subscribers, many of them accountants and bookkeepers themselves.

The mobile application also allows you to track all your business finances on the go so you can check over your numbers at the click of a button.

Xero is a rapidly growing company itself and you can make use of its various subscription plans. From the Early package to their Growing one, to their Establishment package.

You can also make use of their 30-day free trial and find the right package to fit the current size of your business then upgrade when you need to.

Pros 

• 30-Day Free Trial – If you are not sure about using Xero for your accounting software then take advantage of their 30-day free trial to access the features, use their 24/7 online support, and find out which plan is well-suited to you. 
• Business Reporting – The software excels at being able to provide the reports you need for your business and a lot of that is down to how insightful it is. 

Cons

• Doubts Over The 24/7 Support – While the software has plenty of guides and videos to show you what to do, when you do need to speak to a human there are some questions about how that is done. For instance, there is no phone number or live chat option as you would expect with other accounting software providers. 

Sage 50cloud Accounting

With this accounting software, you can enjoy advanced inventory management to effectively manage and track your stock levels.

Make sure that you have sight of the quantities of your inventory you have on hand when an invoice is raised.

As soon as stock is low, or you have run out, you will also get an alert which can prove really handy. 

Pros 

• What-If Scenarios – Knowing how much stock you have in your inventory is one thing but with cash flow features, you can work out your small business’ financial standing really easily by running various scenarios. 
• Automatic Bank Reconciliation – The days of manually typing in data are over so enjoy automatic bank reconciliation to take care of your transactions. 
• Judge Your Projects – There are some projects which will prove more profitable than others so control the cost of each job by setting up records, cost codes, and phases so you can concentrate on the revenue.

Cons

• Dated – Not only is the software only currently designed for Windows, but it is also heavy on resources and some of the UI elements tend to look a bit past their time. A mobile application would be really useful too. 

QuickBooks Self-Employed

Any freelancers, especially part-time ones, should be urged to find appropriate accounting software that works for them.

That typically means programs that do not come with huge features but just the right amount of them.

QuickBooks Self-Employed makes it easy by sorting out your expenses straight from your bank account to organize your receipts by photos you take which can then be categorized.

When it comes close to arranging your annual taxes, the software can transfer your financial data which you can check periodically when it’s due but, otherwise, on a quarterly basis. 

QuickBooks Self-Employed includes three plans; Self-Employed is the most basic, followed by Self-Employed Tax Bundle, and then Self-Employed Live Tax Bundle.

The final option can provide you with access to a CPA who can answer any questions you may have during your plan. They can also perform a tax return review before you file it.

Pros 

• Expenses Sorting – Manage what counts for your freelancing and separate it from your personal life.
• Flexible Pricing – If you only require the most basic of bookkeeping tools or help with your taxes, you can choose the right package for you.
• Mobile Application – You do not even need to use your laptop or desktop PC as you may use their mobile application.

Cons

• Difficulty Moving Data – Other accounting software programs have an easier way of transferring data across.

Final Thoughts

Finding your accounting software may mean trying out various programs to find out which provides the best fit.

That could be whether or not you need to use a payroll feature or business reporting so you can create a financial statement really easily.

Find the right plan for your budget too as you may already employ a bookkeeper or accountant. 

If you are still wondering which to buy, use one that offers a free trial then move on to the next and compare.

Several accounting software programs offer a free trial and still offer use of each feature and even their support so make sure that you test it out fully so you know what you can expect.

Work out some ‘what if’ scenarios to find out how you could really test it and make sure it fits for what may come up in your small business.

Frequently Asked Questions

Which Type Of Accounting Is Ideal For A Small Business?

Choosing the type of accounting to use is a great way of making a system work for you. The type of accounting that most small businesses use is cash basis.

This is the most common and preferred method of accounting for small businesses as it makes it easy to file tax returns as well as maintain the books.

If you have an accounting software program that uses cash basis then income can be recorded as soon as it is received.

Will I Be Able To Do My Own Accounting And Bookkeeping For My Small Business?

With just a few tutorials and some basic accounting combined with bookkeeping knowledge, you should be able to do it for your small business.

Find an accounting software program that works for you and you can make it really easy.

That should mean easy synching between your credit cards and business bank accounts to provide simple financial reports

A lot of the features in accounting software programs are automated to take the hassle and guesswork out of it.