6 Best Small Business Accounting Software: Ranked & Reviewed

After vigorously researching the top accounting software, we concluded that QuickBooks is currently the best option for most small businesses. Not only is the platform unrivaled when it comes to bookkeeping and reporting features, but it also offers tons of useful third-party integrations and a straightforward user interface.

Xero is another top accounting software – especially for online businesses – with strong accounting features and integrations with website builders like Shopify and Squarespace. Thanks to Xero’s current deal, its pricing undercuts QuickBooks too, while Wave offers users a stripped-back way to balance their books for absolutely free.

Accounting software saves businesses money by automating processes and improving financial management. We’ve researched and reviewed the best options out there, to help you understand which will be able to match your needs the most. Take a look at the table below for a summary of our best options, and read on for more in-depth reviews.

In this guide:

• The Best Small Business Accounting Software
• What Is the Easiest Small Business Accounting Software to Use?
• Accounting Software Benefits
• Top Considerations To Make When Buying Accounting Software 
• Methodology: How We Test Small Business Accounting Software
• Verdict: Moving Forward With Accounting Software

Best Small Business Accounting Software

Here at Tech.co, we take the guesswork out of choosing. We’ve independently reviewed every major accounting software to help make business owners’ lives easier.

Let’s take a closer look at each of the providers:

1. QuickBooks Online – Best overall accounting software for small businesses
2. Xero – Best for online businesses
3. Wave Financial – Best free software
4. Zoho Books – Best automation
5. FreshBooks – Best for usability
6. Kashoo – Easiest setup

Crossed out prices above refer to the ongoing software cost, while the lower prices refer to the limited-time deal available to new users.

1. QuickBooks Online

• Best overall accounting software for small businesses
• Prices from: $10 per month – Get 90% off for 7 months

According to our research and testing, QuickBooks is the best accounting software for small businesses due to its excellent feature offering and reasonably priced packages. The service offers all the software attributes you’d expect – including bookkeeping, accounts payable, accounts receivable, and financial reporting. However, what separates it from the competition is its user-friendly software – which is a lot more intuitive than its rivals like FreshBooks and Zoho Books – and its seemingly endless library of integrations.

If your business needs to handle complex accounting tasks, QuickBooks should be able to rise to the challenge with ease. Our research found that the provider offers more advanced features than any other accounting software we reviewed. Some highlights include multi-user collaboration capabilities, which allow users to access the same file simultaneously, and customizable reporting options which let users tailor the format to match their specific needs.

See how both accounting software compare on features and pricing in our Xero vs QuickBooks guide.

While QuickBooks offers some pretty unique features, the platform is fundamentally built around tracking all your expenses. It sorts all your transactions into tax categories and links photos of receipts to the transactions they represent. QuickBooks offers personalizable invoice templates, with automatically added biddable hours and automated reminders. It’ll also let you know when your invoices have been viewed or paid.

Check out our guide to the best expense management software to learn more

When it comes to expense tracking, QuickBooks once again has all the features you’d need. For example, it integrates with users’ accounts across platforms including bank accounts, credit cards, PayPal, Square (see our Square pricing guide), and more. Users can create custom categories to make expenses easier to understand and can run reports for added visibility. The QuickBooks app will also let users track miles they have driven, which can be useful for tracking business trip deductions.

QuickBooks users can manage a range of processes – including payroll – directly through the dashboard. Source: QuickBooks

In addition to QuickBook’s impressive in-house features, the provider lets you extend its service with over 200 third-party integrations. Its app store is home to a range of diverse categories, ranging from ecommerce to CRM. While QuickBook’s app store is impressive, if you’re looking to integrate specific software with your accounting platform Xero may be more of a safe bet as the provider’s app store gives you access to over 1,000 integrations.

QuickBooks is suitable for…

• Small businesses looking to manage advanced accounting processes – like project accounting and profit tracking – in-house
• Freelancers, as the software, gives you access to client invoicing and time-tracking tools, and the Solopreneur plan lets you get started for $10 per month for the first three months
• Newbies to accounting software, due to QuickBooks low learning curve and useful support options

QuickBooks is less suitable for…

• Budget-conscious businesses after the best value possible, as QuickBooks isn’t as affordable as a lot of competitors
• Enterprize-level businesses, as QuickBooks has more stringent user limitations than other accounting software
• Businesses with multiple entities, as the software doesn’t excel at handling inter-company transactions

QuickBooks pricing

QuickBooks isn’t the cheapest accounting software on the market, but its current deal – which gives you 90% off packages for your first seven months – lets you get started for a competitive price.

QuickBooks’s package for one-man shows – Solopreneur – costs just $2 per month with the deal and includes basic bookkeeping features, financial reporting tools, account receivable features, and more. For small to medium-sized businesses that require slightly more sophisticated features like accounts payable and financial forecasting, QuickBooks’ Simple Start, Essentials, and Plus plans will be ideal.

QuickBooks Advanced plan offers every feature in the provider catalog, and boats a much more lenient user limit of 25. However, for $23.50 per month – or $235 per month after the seven months – the tier may exceed the budgets of certain businesses.

QuickBooks doesn’t offer time tracking as standard, but will sell you QuickBooks Time from $8 per month per user, after a monthly $20 base fee. It’s packed with features including task and shift scheduling, real-time reports, time-off management, alerts – but if you don’t need granular time-tracking abilities we don’t recommend paying for the add-on.

We do have an entire page on QuickBooks pricing, but the table below can get you up to speed with a glance.

2. Xero

• Best for online businesses
• Prices from: $15 per month

Our research team found Xero offers all the features you’d expect of an accounting platform. Its features match QuickBooks eye-to-eye, offering all the software attributes you need to balance books effectively, including bookkeeping, accounts payable, accounts receivable, and financial reporting.

Moreover, unlike alternatives like QuickBooks and Zoho Books, its cheaper plans don’t have stingy user limits, making the software a pretty good deal for small businesses.

With Xero, you can generate invoices quickly, and check whether recipients have seen them and paid them. It’s also a stand-out choice for online businesses – especially those retailing products. This is because it helps you track your inventory, and sync with Amazon, Shopify (see our Shopify pricing guide), Etsy, and more. Similarly, users can download the Xero Projects app on iOS and Android to record time and costs, with the data seamlessly integrating with invoices and reports.

So why did we rank QuickBooks above Xero? First, because QuickBooks has a better selection of advanced features: Xero doesn’t cover expenses on all of its plans, instead only offering the service on the $80-per-month Established plan, while Xero’s invoicing templates can’t be modified as well as QuickBook’s templates.

All told, however, Xero is second only to QuickBooks and remains a very competitive package, especially given its online-first attitude: Xero integrates with some of the biggest website builder platforms on the market, including some we’ve reviewed (see our Squarespace review and Square Online review), making it an attractive pick for a business that relies on one of these platforms. If your business makes a lot of online, direct-to-customer sales, we’d recommend Xero.

Read more in our full QuickBooks vs Xero guide.

Xero offers a richer feature set and better integrations than options like Sage and FreshBooks too, with over 1,000 apps to choose from in total. Read our Xero vs FreshBooks vs Sage guide to see how these solutions weigh up side by side.

Xero is suitable for…

• Online businesses, due to its wealth of ecommerce and CRM integrations
• Restaurants and hospitality businesses, due to its industry-specific capabilities like labor cost analysis and food and beverage cost monitoring
• Small businesses with smaller budgets, as Xero is currently running a competitive discount, and its cheaper plans have generous user limits

Xero is less suitable for…

• Businesses that undertake project-based work, as Xero’s project accounting capability is reserved for its highest tier
• Businesses serious about improving profit margins, as the software lacks a cash flow projection tool
• Large corporations, as Xero’s performance decreases when it’s processing over 1,000 transactions per month

Xero pricing

Xero offers three pricing packages for its accounting software: Early, Growing, and Established. While the Early plan is ideal for businesses just starting out, if you need to send more than 20 invoices per month, you’ll need to opt for one of the provider’s advanced tiers.

The price of Xero’s plans has risen slightly over the years, but the provider is currently letting businesses secure plans for 95% off the asking price, for the first three months of the service. This major discount lets businesses get started with the accounting software for as little as $0.75 per user, per month, and then $15 per user, per month after this deal comes to an end.

Learn more about Xero pricing here, or see how its plans compare at a glance below:

3. Wave Financial

• Best free accounting software
• Price from: Free

That’s right – you don’t need to pay a penny to use Wave, so there are no price plans for us to share with you. In fact, you don’t even need a credit card to sign up to its accounting, receipt-scanning, and invoicing apps – they’re all free and ready to use.

However, while Wave makes it easy for a tiny business to track its expenses at no cost, its lack of pretty basic stock management and budgeting features will make unsuitable for businesses with specific requirements.

Wave is a no-frills accounting solution. However, you shouldn’t let its rock-bottom price point deceive you. Its accounts receivable features are spot on, with the prover letting users create and send an unlimited number of invoices, track the status of payments, and fire off reminders with ease. You can even invoice in any currency, as well as send quick estimates before turning them into full invoices.

Wave’s bookkeeping functionality is surprisingly competitive too. The software uses a double-entry accounting system to improve compliance, and Wave can be used to track expenses, monitor profits through financial reports, and calculate sales tax.

Wave’s software is simple, yet it helps you manage payroll processes, payment activity, and much more. Source: Wave

Wave even offers an affordable payroll add-on to help make its service a bit more complete, as well as a payments plan, both of which will, in fact, cost you money.

So, what’s the catch? Well, there’s no built-in stock tracking, for a start. This means that small business owners have to make sure they stay on top of all that paperwork, especially if they manage large or complex inventories.

Aside from its free tier, it only offers one pricing plan as well, making it less scalable than accounting software with more packages. However, for all of Wave’s pitfalls, it would make a brilliant choice for small companies and freelancers who are just starting out. The free plan provides no obstacles to entry for businesses on a budget and the basic features still provide the help you need to get started.

Learn more with our Wave accounting review.

Wave is suitable for…

• Budget-conscious businesses, as Wave lets you balance your books and manage other accounting processes for absolutely free
• Freelancers and solo entrepreneurs, as Wave’s stripped-back software won’t overload you with unnecessary features
• Growing businesses, because Wave’s financial reporting tools are surprisingly impressive for a free software

Wave is less suitable for…

• Businesses with complex accounting needs, as Wave lacks advanced features like  project accounting and custom reports
• Retail and hospitality businesses, as Wave doesn’t offer a way for you to manage inventory
• Businesses looking to manage employee time, as Wave doesn’t offer time tracking features

Wave pricing

Wave lets users choose between two versions: Starter or Pro. Wave’s Starter plan is free forever, and includes everything small businesses need to get started including unlimited invoicing and estimates, basic bookkeeping tools, and online payment options. You can also bump up the package for $11 per month if you require receipt scanning capabilities.

If you can’t get by without advanced features like automatic bank transaction imports, unlimited receipt scanning, and live customer support, you can also upgrade to Wave’s Pro plan for $16 per month.

4. Zoho Books

• Best automation features
• Price from: $15 a month

Zoho Books may not offer as many third-party integrations as our frontrunners QuickBooks or Xero, but the software would be a decent fit for most small businesses, especially those processing high volumes of invoices.

Unlike QuickBooks, Zoho Books doesn’t charge extra for its time-tracking capability. Businesses can use the feature to log hours for an unlimited number of projects, ensuring that they bill clients accurately and manage their time to the best of their ability.

Its automation features are a highlight, as well as a key element behind why accounting software is so essential: Accounting makes up about 29% of all high-tech automation. Zoho can also send hard copies of invoices or estimates to customers for you. A domestic letter costs one credit, while an international letter costs two credits – credits themselves are $2 per go.

Zoho Books lets you scan an unlimited number of documents, and upload them seamlessly to the platform. Source: Zoho Books

Zoho will also auto-scan any documents you upload to its system. This means that you can save time manually re-creating or changing documents, as Zoho will already have all the details. This costs $8 per month, paid annually, and capped at 50 scans a month, but remember – time is money.

You can schedule payment reminders to be automatically emailed to customers, and even create a multitude of messages to be sent at different points during your chasing. Reports can be scheduled to generate weekly, monthly, quarterly, or annually in PDF, CSV, or XLS formats. These features, paired with reliable customer support, can help you concentrate on the fun side of your business.

Our team still found that Zoho gives you all the standard features you’d need for accounting software, with inventory tracking tools, invoice payments, and transaction tracking features. Feel free to check Zoho out if it sounds right for you — you can get a 14-day free trial of Zoho on plans, plus a limited permanently free plan that’s open to any business with an annual revenue of less than $50,000.

Zoho Books is suitable for…

• Professional service businesses, because the platform offers generous invoice limits on its lowest tier
• Businesses that rely on project-based work, as the software provides affordable project accounting features
• Businesses looking to save time, as Zoho Books offers lots of useful automation features

Zoho Books is less suitable for…

• Businesses looking to balance their books for free, as Zoho Books doesn’t currently offer a free plan
• Businesses using specific software, as Zoho Books offers much fewer software integrations than their competitors
• Businesses that scan a large number of documents, as this feature costs extra

Zoho Books pricing

Zoho Books offers five different pricing packages, with prices ranging from $15 to $240 per month. You can get a 14-day free trial of Zoho on plans, plus a limited permanently free plan that’s open to any business with an annual revenue of less than $50,000.

For more information about costs read our full Zoho Books pricing review.

5. FreshBooks

• Best for usability
• Price from $19 per month

FreshBooks is a reliable platform that boasts one of the cleanest interfaces we reviewed, making it ideal for businesses new to accounting software after an ultra-low curve. Its accounts receivable features also match QuickBooks and Xero’s eye-to-eye – lending the service well to freelancers and contractors who rely heavily on invoices.

It may lack advanced cash flow projection capabilities, but if you’re after a dependable accounting management tool that’s able to take care of the basics, FreshBooks should definitely be on your radar.

FreshBooks’ software is based around a “Double-Entry Accounting” feature, which tracks revenue items against their related expenses, and it makes understanding your profit and loss figures a breeze. FreshBooks will also automatically check that debit and credit amounts are all in order, and it’ll even pinpoint errors as soon as they arrive. You can also use FreshBooks to track your inventory, opening up its uses to retail and hospitality businesses.

FreshBooks’ inventory management make it easy to add new items and apply relevant taxes. Source: FreshBooks

FreshBooks also makes it easy to categorize transactions, with distinct sections for equity, transfers, or refunds. FreshBooks also generates invoices, with custom templates and email integration. You can even track how much time your employees have clocked, and it integrates with Asana, Basecamp, Trello, and Teamwork – meaning you can see what everyone is working on. Thanks to these features, Tech.co research teams puts FreshBooks at the top our list of the best accounting software for restaurants. It’s a good pick for any small business that deals with meals.

If you incur any road bumps with FreshBooks, you can reach out to a member of its customer service team from 8 am to 8 pm ET, Monday through Friday. Compared to competitors like QuickBooks and Xero, FreshBooks’ customer support center is quite limited, as the provider’s channels aren’t open 24/7. While this shouldn’t pose a problem for most businesses, it could be a sticking point for businesses that operate outside of traditional hours, like those in the hospitality or healthcare sectors

FreshBooks’ profit and loss features give you a detailed breakdown of your business’s financial health. Source: FreshBooks

FreshBooks doesn’t have a native payroll processing feature, either. Instead, it integrates with Gusto (see Gusto Payroll pricing here or check out our Gusto vs ADP Payroll guide here) or PaymentEvolution. It’s not a complete deal-breaker, but it is annoying that there’s no native feature.

What’s more, without low prices to help it compete with the feature-packed likes of QuickBooks and Xero, FreshBooks has dropped to fifth place on this list. That said, the prices are still a little lower than most, and the service delivers excellent usability and solid features.

FreshBooks is suitable for…

• Retail stores, thanks to its useful ecommerce integrations and stock management features on all tiers
• Newbies to accounting software, thanks to its stripped-back and extremely intuitive software
• Businesses that operate during traditional working hours, as FreshBooks customer service isn’t open 24/7

FreshBooks is less suitable for…

• Businesses that want to use accounting software to pay their team, as FreshBooks lacks in-house payroll features
• Healthcare and hospitality businesses, as FreshBooks’ customer service isn’t available around-the-clock
• Businesses that want a free accounting software, as FreshBooks’ doesn’t currently offer a free plan

FreshBooks pricing

As you can see above, FreshBooks pricing covers a range of costs (the crossed out price above is the ongoing price, while the lower price refers to the deal you receive for the first three months). The lowest plan is a reasonable $19 per user, per month, although its Plus plan ($33 per user, per month) is more popular.

FreshBooks is also running a discount that gives businesses 50% off packages for the first six months. Take a look at how this impacts its pricing below:

6. Kashoo

• Easiest setup
• Price from: $18 per month

Kashoo is designed to make getting started as easy as possible. It only has two plans, its interface is straightforward and, while it isn’t as complex as some of the other providers on our list, it has everything you need to get going. In fact, Kashoo claims that you can get set up with full double-entry accounting in less than a minute.

The service has decent features for bookkeeping and accounts payable needs, and small businesses will enjoy the above-average score our researchers gave it for the value-to-cost ratio. Kashoo was designed to be beginner-friendly too, making it a reliable piece of software for users without much prior accounting experience.

If you just want to get set up as quickly and as easily as possible, we recommend QuickBooks or Kashoo. QuickBooks won’t be able to get you set up in less than a minute like Kashoo, but it does have more features, making it a slightly better fit for more companies.

Kashoo’s profit and loss (P&L) statement makes it easy for users to summarize their revenues, costs, and more over a specific period. Source: Kashoo

Paying invoices is straightforward, and users can choose from KashooPay – Kashoo’s own payment processor – or Stripe. Kashoo also claims that it will automatically connect any incoming transactions with the right invoice to make tracking even easier.

Kashoo is suitable for…

• Newbies to accounting software, as Kashoos software is easy to use, and won’t overwhelm new users
• Freelancers and micro-businesses, as Kashoo is designed to manage simple accounting tasks
• Users looking to get set up quickly, as Kashoo lets you get up and running in less than a minute

Kashoo is less suitable for…

• Businesses with complex accounting needs, as Kashoo lacks lots of advanced features like workflow management and time tracking
• Retail or hospitality businesses, as Kashoo’s entry-level plan doesn’t offer inventory management tools
• Android users, as Kashoo only offers an mobile app for iOS devices

Kashoo pricing

Kashoo keeps it simple when it comes to pricing. The provider offers two main plans: trulysmall ($18 per month) and Kashoo ($27 per month). While the provider’s trulysmall plan should be robust enough to meet the needs of freelancers and solo-entrepreneurs, for any other type of venture the Kashoo tier would probably be your best bet.

What Is the Easiest Small Business Accounting Software to Use?

QuickBooks is our pick for the easiest accounting software to use, since everything from uploading invoices to tracking payments and sales is a piece of cake.

QuickBooks is very intuitive, and all of its features are very clearly signposted, reducing the time it would take you to search for functions manually. Its dashboard highlights important business details too, including a clear financial overview that offers a clear, visual snapshot of your business’s health. Thanks to the platform’s automatic bank feed, you won’t need to spend too much time manually entering data, or managing transactions either.

QuickBooks is a cloud-based system. This means your records are available everywhere, on every device, all the time. Not only does this make it easier for users to manage important processes on the go, but it also ensures that company data is protected by multiple layers of security.

Accounting Software Benefits

If you start paying for an accounting software, you’ll save yourself untold hours of work and you can spend your newfound free time making far more money. Here are the top benefits that make a good accounting software the best investment a business can make:

• Reduce errors — Lost inventory, misplaced decimal points, and unpaid invoices can all slip through the cracks. With an accounting software system, it’ll be easier to spot a discrepancy. Plus, the intuitive interface will make you less likely to make a mistake in the first place.
• Automate processes — You won’t need to download files manually from your bank accounts, you can easily search for the right invoice with a keyword, and management tools can ping you when you need to send a bill or invoice. The impact? Endless time saved.
• Generate financial reports — P&L statements, balance sheets, and cash flow statements are all essential to doing business, and accounting softwares can create them immediately, store historical records, and let you download any documents you need.
• Centralize data — Bank accounts, credit card accounts, and your employee payroll service can all be accessed from the right accounting software, so you won’t need to shuffle through a ton of different accounts to figure out how they relate to each other.
• Files taxes easier — Tax season doesn’t have to be the bane of all business owners: Accounting software services can auto-populate your tax filing papers and, depending on the state, may even be able to file them on your behalf.

Finance and accounting software are useful for all businesses small and large. But different use cases will determine which type of software plan is best for you.

Top Considerations To Make When Buying Accounting Software 

Shopping for new business software can be overwhelming. With so much to consider, it can be hard to know what features and functionalities to zero in on, especially if you’re purchasing the software for the first time. 

To help you find an accounting solution that fits your needs like a glove, we’ve distilled the most important factors to consider below:

• Relevant accounting features – Every business will require something slightly different from their accounting service. To make sure your chosen solution includes everything you need, you should carefully identify which features you need – from expensive tracking to invoice processing – and only consider packages with relevant tools.
• Useful integrations – Integrated accounting software helps you streamline your operations by letting you centralize your business’s financial data across platforms.
• However, if you want to extend the use of your accounting software, you need to prioritize solutions that offer relevant integrations. 
• Scalability – Your accounting needs will evolve over time. So, to ensure your accounting software is future-proof, we’d prioritize scalable solutions that offer modular packages and can handle escalating transaction volumes. 
• Security features – Financial data can be incredibly sensitive, so to ensure company, client, or customer data is on lock, you need to invest in accounting software with a strong security profile. Key safeguards to look out for include data encryption, multi-factor authentication, and regular software backups.
• Real-time insights – Accounting software can be used to help businesses make informed, financial decisions. If you’re interested in using the tool to monitor and improve your financial health, we recommend finding one that offers real-time performance insights.

Methodology: How We Test Accounting Software for Small Business