Accounting Software Review
How to Choose Accounting Software
The top performers in our review are FreshBooks, the Gold Award winner; Sage, the Silver Award winner; and QuickBooks, the Bronze Award winner. Here’s more on choosing software to meet your needs, along with details on how we arrived at our ranking of these 10 online accounting solutions.
One of the most important decisions you will ever make for your business is choosing an accounting software solution. Accounting software not only tracks your financial information, including invoices, sales, and tax collected, but it also tracks inventory, vendors, and customer information. The best accounting software runs useful financial reports and provides the data your accountant requires. While you may not need every feature that accounting software offers, you can build custom solutions to suit your specific needs.
Whether you're an entrepreneur, small business or growing company, we've evaluated and ranked the top accounting software to help you find the best product for your size of business and specific needs. The bookkeeping software we reviewed are available as cloud versions with monthly subscription fees, versus those that require a yearly software purchase.
Most small businesses are moving toward online accounting systems, and the industry is accommodating that change. The advantages to cloud-based accounting software include low upfront cost, supported upgrades, everywhere access and online data backup. However, if you are interested in traditional software or network-hosted options, these versions are available too. Both QuickBooks and Sage offer offline versions. Learn more by reading our articles on accounting software.
Choosing the Best Online Accounting Software
As with any software application, finding the right accounting product for you depends on your business' specific needs. Online accounting software's rates often vary depending on the number of users and customers and the number of invoices your business generates. Some offer versions that support unlimited invoicing, customers and items for a higher monthly fee. Also, if you employ contract workers, you may only need simple time tracking and invoicing features, but if you are a larger organization, you might need more complex features like advanced payroll, reporting and ERP functions.
Freelance, Contractors or Self-Employed
If your business consists of just you, time-tracking, invoicing and simple customer management may be the only tools you need. In this situation, full-fledged accounting solutions, such as QuickBooks, may be too overwhelming. Instead, you may be satisfied with services such as Harvest, Hiveage, FreeAgent, Xero or Square, or introductory functions of FreshBooks or Zoho.
Small Business or Startup, No Employees
Small businesses need more features beyond what an introductory version provides. When considering what solutions will be a good fit, consider the volume of your business and if you require additional services such as point-of-sale, payroll or credit-card processing. You'll also want to consider whether you plan on growing your business or keeping it small. In most cases, adding advanced payroll or inventory features costs extra, so you may want a software solution you can easily add functions to. Some programs to consider include Xero, FreshBooks, LessAccounting or Zoho.
Small Business with Employees
As mentioned above, most software manufacturers charge an additional fee for processing payroll, and most base their rates on the number of employees and payroll periods you have. Other items you should consider include whether you need features for tracking schedules and hours worked. If you have commission-paid employees, you'll want a product that tracks employee sales. The payroll system you add should also help you with your federal, state and local employee tax obligations. Some systems that can help you manage employees include QuickBooks, Sage, Xero and FreshBooks.
Online Accounting Software Mini Buyer's Guide
Before purchasing accounting software, first you'll want to quantify your monthly business volume, including number of invoices typically processed, the average number of customers and users. Once you know these numbers, you begin to see which popular accounting solutions may work best for you.
All basic accounting solutions are going to provide rudimentary functions like invoicing, expense tracking, estimate creation and reporting, but you may also want to consider additional features such as:
With a good payment processor, you can accept credit or debit card payments online or via a mobile device. This is not a free or included feature, but it is one that is convenient for your customers and you. Many businesses report a decrease in accounts receivable once a quick payment method is implemented.
Employees & Payroll
Many small business do not have a lot of employees, but if you do, you may want to consider helpful employee-management tools. Many accounting solutions help you manage employee profiles, track hours worked and assist with payroll. Payroll services are often an additional feature, but they can help you with employee tax payments, direct deposits and check printing.
Time & Expense Tracking
All accounting software tracks expenses. However, mobile time and expense tracking can be useful for those who bill by the hour or who travel extensively. Mobile expense-tracking tools utilize smartphones or tablets to load images of receipts and track expenses on the road. You may also be interested in applications that track customer information via mobile devices as well.
Manage & Pay Bills
These tools track, record and pay bills, but they cost extra. You may also be able to schedule recurring payments. Some, such as QuickBooks, can be configured to print checks.
Estimates & Quotes
While most accounting applications create simple quotes, if you offer services that require more complex quotes, you may consider a product that generates complex estimates and quotes easily. It should also be able to easily convert those quotes to invoices when needed.
Most accounting systems do not include complex inventory-management features, which means you'll either have to upgrade or find a compatible third-party product that works with the software. Also, if you have a point-of-sale system, you'll want to find out what accounting software your POS system is compatible with to help you with inventory management.
What We Tested, What We Found
Top Ten Reviews seeks, whenever possible, to evaluate all products and services in hands-on tests that simulate as closely as possible the experiences of a typical consumer. We obtained the units in our comparison via a free demo or directly from the software provider. The software companies had no input or influence over our test methodology, nor was the methodology provided to any of them in more detail than is available through reading our reviews. Results of our evaluations were not provided to the companies in advance of publication.
We tested the products on our lineup for ease of use, and we had testers without any previous accounting experience test the software to simulate the new user experience. Overall, we learned that most of the applications were rather simple to use, even without training. Our testers performed basic functions, such as setting up a business, creating invoices, tracking expenses and running reports.
For the most part, the products we tested all offer free demos for 14 or even 30 days. We recommend taking advantage of the free-trial offers to find the software that best suits your needs. Those accounting applications that scored the highest overall were also those that provided a clean, easy-to-navigate interface and up-to-date, ongoing support resources.
Our Verdict & Recommendations
Fortunately for small business owners or entrepreneurs concerned about the cost of online accounting software, many applications are affordable and simple to use. We recommend narrowing your search to the programs that suit your budget, provide the features you need and then trying them out.
Other recommendations: Ask whether the software manufacturer will help you install the new system, including whether they will help you migrate all of your existing data into the new system. And talk to your accountant about any other questions to ask to ensure you choose the right system and that it's installed correctly.
Our top three picks include:
FreshBooks is simple to use. It includes a clean, easy-to-navigate interface and is compatible with other business applications. We also found FreshBook's support responsive and helpful. It is well-suited for service-oriented businesses that sell services, like consulting, since the inventory tools are limited. You can even add the ability for clients to pay using their credit card directly from FreshBook invoices. The company offers four plans, and all four plans support unlimited invoicing, expenses and time tracking.
Sage One is, as its name implies, for small businesses, even freelancers or contract workers. It is streamlined and simple to use. Sage has been around for over 30 years and operates in over 24 countries. Sage Accounting provides software solutions for all business sizes and is a good option if you plan on growing your company and want a product that grows with you. While we tested Sage One, Sage offers numerous other versions for different types of businesses, including international companies.
Nearly everyone has heard of Intuit's QuickBooks. Over 130,000 accountants use QuickBooks to help manage their client's books and taxes, which means your accountant is likely experienced with QuickBooks. It supports an active user community to help business owners maximize the use of the software and interact with other business owners. This online version has been greatly improved over the past few years and is easy to use for such a full-service product. This is the same company that provides TurboTax and Mint.
Other Accounting Solutions
While searching for the best business accounting software, you may encounter some solutions not on our lineup. Some are new products, some are intended for large organizations, some are non-U.S based. While we cannot review every product, here are a few you may be curious about:
One popular free accounting solution is Wave. Unlike many "free" online applications, this one includes unlimited invoicing. You can add paid services, such as payroll, credit card processing and advanced support options. Wave is intended for businesses with nine employees or less and those who do contract and freelance work. Billy is another free accounting solution offered as a cross-platform online option. Like Wave, you can add paid options like quotes and estimates, custom invoices and recurring invoices. If you want to build your own integrations, you can access Billy's open API for a small monthly fee.
Popular accounting systems for larger companies include NetSuite, QuickBooks Enterprise and Intacct. NetSuite provides a full range of accounting solutions with compatible ERP, CRM, eCommerce and professional services automation (PSA) options. QuickBooks Enterprise supports up to 30 users and offers payroll, payment, inventory and advanced reporting options. If you are already satisfied with QuickBooks, upgrading might be easiest if you are planning on expanding. Intacct is used by nearly 11,000 customers to manage their financials. It is advertised as an accounting tool to help lead your business towards your IPO.
This accounting solution was first created for mobile devices and is most suitable for small businesses. It's designed for those who are not formally trained accountants but rather small business owners or entrepreneurs. One Up can import bank statements, track bills that are due, create invoices and quotes, and manage basic inventory. It is compatible with Square Register and other third-party apps. A subscription for one user costs under $10, and you can add unlimited users for an extra fee.
InDinero provides accounting software for small businesses as well as the ability to help you file your corporate taxes. Access is based on a monthly, flat-rate fee, and rates vary depending on your needs. inDinero has been around since 2009, and some business owners report being able to manage their small company's finances using only this software.
Non-U.S. Based Accounting Solutions
You may come across some accounting solutions such as Reckon, ClearBooks or Saasu, which are not based in the U.S. In most cases, you can easily change the currency. You'll need to configure your unique tax situation and, if applicable, include value-added (VAT) tax. We also recommend checking with the software manufacturer to ensure it provides the level of customer service you're expecting. One solution to consider is KashFlow. Our testers found it simple to adjust the currency option to U.S. dollars.
As a small business owner, you know that time is money. The best accounting software increases your efficiency by reducing the amount of time you spend on time-consuming accounting and HR tasks, leaving you with more time to grow your business.