Small Business Accounting Software Review
How Do I Find the Best Small Business 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 detail on how we arrived at our ranking of these 10 small business accounting solutions.
The way you keep your books and track your accounting is one of the most important processes of running a business. As such, one of the most crucial decisions you make is how you track your finances. Small business accounting software is an essential business product that does much more than just track your financial information. With accounting software, you can create invoices, track sales and even show taxes you’ve collected. Some solutions can also manage vendors, inventory and customer information. The best accounting solutions allow you to run financial reports that give you a clearer view on your financial situation and provide that information to your accountant.
Most companies allow you to build custom solutions that fit your individual business needs, and at least one of the products we tested and reviewed should fit your business, regardless of size. All of the software we reviewed is available as cloud software, accessible from anywhere, with monthly subscription costs instead of software with a one-time purchase fee.
As most small businesses move toward web-based solutions, the accounting industry is following suit. Cloud-based accounting allows you to access your information on the go and includes low upfront costs and free lifetime upgrades to the latest version of the software. However, while most companies are moving to the cloud, you can still find traditional software solutions in both Sage and QuickBooks. For more on this software check out our articles on small business accounting software.
Choosing the Best Online Accounting Software
Each business has its own needs, and finding the right bookkeeping software is dependent on those needs. Most accounting software providers offer different pricing depending on how many users you want to access the software as well as the number of clients you have and the number of invoices you want to send. Some companies offer unlimited options, where you don’t have to worry about the number of clients or invoices you need to support. If you employ freelancers and contract workers, you may need a simple solution, but larger companies may need support for advanced features like payroll.
Freelance, Contractors or Self-Employed
Micro businesses that are made up of one employee typically only need access to tools like simple customer management, time-tracking and invoicing. If you are a business like this, you may find that comprehensive solutions like QuickBooks are simply too overwhelming. Instead, you might find software like FreeAgent and Xero to work better, or you might turn to the introductory packages that FreshBooks and Zoho offer.
Small Business or Startup; No Employees
Introductory versions typically don’t offer the tools or functionality that small businesses need. As you start to look for accounting software for a small business, think about how much volume your business processes and if you need additional services, like payment processing and payroll. Growth is also an essential consideration, as adding these additional services often costs more and can get complicated. Companies like FreshBooks, Xero and LessAccounting easily allow you to grow while using their services.
Small Business With Employees
Most software companies charge extra for payroll functionality, and if you choose to add this feature, you typically pay based on how many employees you have and how often you pay them. Aside from payroll, you might want to consider adding time-tracking features so you can track how much time your employees are working. Take into consideration what kind of sales you make, and if your employees make commission from those sales, because you might want to purchase a product that can track that information. Software like QuickBooks, FreshBooks, Sage and Xero can all help you manage specific employee information like this.
Small Business Accounting Software Mini Buyer’s Guide
While you may want to purchase your software right away, it’s a good idea to sit down and figure out some numbers first. Before you make a purchase, consider how much monthly volume you handle and how many invoices you think you need to be able to send to your clients. After you have a good estimate of these numbers, you start to see which accounting solutions might work for your company.
When you add a payment processor to your accounting software, you can accept credit and debit card payments online or through mobile devices. This typically isn’t included for free, but it can be a great convenience for both you and your customers. Having a payment processor in place helps you get paid faster.
Employees & Payroll
While you may not have a ton of employees – most small businesses don’t – it’s still helpful to have some kind of employee-management function as a part of the cloud accounting software you purchase. Most of the software we tested can help you manage employee specifics like hours worked and employee profiles. However, if you want payroll services, you typically need to pay extra. These features are nice in that they manage employee tax payments, check printing and direct deposits.
Time & Expense Tracking
All online accounting software tracks your normal business expenses. However, not all track your expenses on the go. Mobile tracking for expenses is a useful feature that uses your phone or tablet to take pictures of receipts and upload them to your account. Some software even lets you track customer information on your mobile devices, so you can save new client information on the go.
Manage & Pay Bills
Some software helps you track and pay the bills you owe, to vendors and other companies, but it is often a paid extra. You can also set up recurring schedules with these tools, and some companies like QuickBooks can even print checks for you.
Estimate & Quotes
Most small business accounting software can create estimates and quotes for your clients. However, some business models require complex quotes, so you may want to consider a product that can generate quotes with more customizable options. Any software you choose should also be able to convert quotes into estimates with ease.
Managing inventory is an important part of any business, but many accounting software products don’t help you manage complex inventories. This leads to you having to purchase third-party software or add-ons. Also, if you run a POS system, you may need to find out which accounting software it supports for inventory management before purchasing.
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 customer. 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.
As we tested, we primarily looked at how easy each software was to use. We tested this by introducing each software to users who had no previous experiences using accounting software in order to simulate an experience a brand new user might have. After testing, we found that most of the products were relatively simple and easy to use, even without any kind of training. Each of our testers walked through basic tasks, like setting up a new business profile, creating new invoices, tracking expenses and running financial reports.
Most of the products we tested are available to the general public as free trials for either 14 or 30 days. Taking advantage of these free trials can help you better determine which software might work best for you. The accounting software that ranked highest are those that provide clean interfaces with up-to-date support options.
Our Verdict & Recommendations
For the most part, you don’t have to worry about cost when it comes to purchasing online accounting software. Most of the applications are affordable and easy to use, which helps you make the leap without hesitation. However, there is enough variance in pricing that we recommend you set a budget first, then narrow your search based on that budget.
Our other recommendations include asking the software provider about implementation assistance and migration of existing data to your new software. You might also want to talk to your accountant to see if he or she has any clarifying opinions about which software would work best for your company in specific.
Our top three picks include the following:
FreshBooks is one of the simplest software applications we tested. Its clean, simple interface is compatible with a variety of other business applications, and the company’s support team is excellent. FreshBooks works well for businesses that are service oriented, providing things like consulting services, since inventory tools are limited. You have the choice of one of four different plans with different features, but each plan offers unlimited invoicing, time tracking and expense tracking.
Sage offers a variety of different versions of its popular accounting software, but we found the versions suited for small business to be the easiest to use. This is especially true for companies that are growing. Sage is one of the largest companies on our lineup, with operations in over 24 countries. With over 30 years of experience under its belt, Sage has created a streamlined and efficient product that provides solutions for all sizes of businesses.
Intuit is one of the most popular solutions we tested, and the company is almost a household name in the business world due to the sheer number of business products it has created, such as Mint and TurboTax. In fact, over 300,000 accountants use Intuit’s accounting software, QuickBooks. As such, your accountant is probably experienced with the software. The online version of QuickBooks has improved greatly in the past few years, and it has become an easy-to-use product for all kinds of business models.
Other Accounting Solutions
During your search for the best accounting software for small business, you might run into some companies that aren’t represented here. Some of these software options are intended for larger organizations, or perhaps they are new or not based in the U.S. We aren’t able to review every product we encounter, but here’s some additional information about some of the other common software you might see:
There are a few free accounting software options floating around, and one popular option is Wave. This product distinguishes itself from other free options because of its unlimited invoicing, which many free software don’t include. You can also add advanced functionality, such as credit card processing, payroll services and premium support, for an extra price. Wave is great for companies with fewer than nine employees.
Billy is another popular free application. It is cloud based and, like Wave, offers plenty of features you can pay extra for, if you so choose. You can pay extra for accounting features, like quotes, estimates, invoice customization and recurring invoice options. If you prefer to customize your solution entirely, you can pay a small fee to access Billy’s open API.
Small business accounting software typically can’t handle organizations with more than 100 employees, but there are plenty of enterprise solutions available. Some of these include products like QuickBooks Enterprise, Intacct and NetSuite. NetSuite, for example, is compatible with a variety of additional business services like CRM and eCommerce. QuickBooks Enterprise allows you to give access to up to 30 users and includes services like payroll, advanced reporting and inventory management. Intacct is designed for companies that are preparing for their IPO.
One Up was initially designed as an accounting software for mobile devices, and it works great for small businesses. This solution offers plenty of basic accounting features, like invoicing and quotes, and it can also import existing bank transactions and manage inventory. One Up, as a mobile-centric product, is compatible with Square Register and other mobile, third-party apps.
inDinero is another great choice for smaller business models, and it even helps you file your corporate taxes required every year. You pay a flat, monthly fee to use inDinero, but your rates vary depending on what features you want to pay for. The company has only been around since 2009, but its users report that they can manage all of their finances using this software.
Non-U.S.-Based Accounting Solutions
Some popular accounting software providers are based outside of the U.S., such as Saasu, ClearBooks and Reckon. You can still use these software options if you are based in the U.S., but you may need to play around with configuration for a little longer than normal. You may also want to think about support options and if these companies offer U.S.-based support. If not, you might be hit with high international calling charges. One non-U.S. solution we were able to test was KashFlow, and our testers found it simple to configure the dashboard to U.S. dollars.
Running a company can be complicated, so anywhere you can improve efficiency and decrease how much time you spend doing a routine task is important. The best small business accounting software does this for you, which leaves you plenty of time to run and grow your business in the way only you know how to do.