Keeping track of payments, wages and other money matters can seem overwhelming, particularly to smaller businesses and independent contractors. Small-business accounting software can help you manage these essential tasks. This type of software ranges from introductory products that cover basic accounting tasks such as QuickBooks Pro and Sage 50 to comprehensive, scalable solutions that do nearly everything, like QuickBooks Enterprise or Sage 50 Premium. While we concentrated on the introductory products, most offer upgrades or add-ons to increase the functionality of the solution.
To help you make a decision, we show you which modules are included in each bundled bookkeeping software package, all displayed in a side-by-side comparison. We also list other available services such as electronic payment processing, general payment processing and payroll services, should you need to integrate those services with your software.
For this small-business accounting software roundup, we selected products based on their availability as downloadable software rather than only as online, subscription-based accounting services. As well, most of the products reviewed here can be networked within your company’s network to support more than one user. The top three products also have online versions. If you are looking for an online subscription-based accounting solution for managing your freelancing projects or startup, see our accounting software reviews.
Before you decide which accounting software is best for your company, read reviews of our top selections: QuickBooks Pro, Sage 50 and AccountEdge. These three accounting solutions offer the widest range of features in one package. Check for the software with the highest ratings in the areas that matter most to you. And read our articles related to small-business accounting for accounting tips, along with profiles of different accounting tools.
To find the best accounting software for your company, you need to have a basic idea of what you want the software to do. That depends on the nature of your business. All companies, from independent contractors to large businesses, require a way to track invoices, expenses, customer interactions and payments. Smaller companies and individual freelancers probably won't need to manage employees or inventory, provided that product and service variety is limited. However, companies that need to manage a diverse inventory will need an advanced inventory module. Some companies will maintain their current size for years, while others are on a path of growth. When choosing software, consider what level of scalability will best suit your long-term goals.
Other considerations include how many people in the company need to work with the software at the same time, whether you need to access the software from outside the office, and what types of reporting capabilities you need to satisfy compliance or investor requirements. We considered all these factors in ranking the best accounting systems.
The best software provides all the modules you need in order to manage a small business, includes tools such as time tracking and employee management to make your life easier, offers extensive reporting, and can accommodate you as your business grows. For our accounting software reviews, we rated the top products according to general accounting tools; reporting and analytic capabilities; and added features such as payroll, inventory and automation.
All accounting software gives you basic accounting tools such as accounts receivable, accounts payable, invoicing, billing and general ledger capabilities. The difference comes in how well the products handle those functions and how much you can customize their modules. For example, some software provides accounts payable and accounts receivable as individual modules, and other applications provide them both in an integrated package.
Reporting & Analytics
Accountability – the ability to report to a board of directors, tax preparers, managers or investors – is for many a prime reason for relying on accounting software. The best accounting software provides a wide range of preconfigured reports and also helps users create custom reports. In addition, some accounting software provides small businesses with analytics features including budget and sales forecasting tools. We also considered how easy it is to share reports, change formatting options and create forecasted budget reports using the software.
Payroll & Employees
For those businesses that need to manage employees, we evaluated payroll and HR tools such as time sheet management, vacation and sick-time tracking, commission management and the ability to print tax forms. Our reviews assess the variety of information that you can store, such as multiple pay levels or skill sets, as well as automatic features, such as the ability to calculate payroll tax, make automatic deposits, pay into 401(k) accounts and track hours worked.
Inventory & Services
This criterion includes sellable items such as physical inventory, services and projects. Inventory modules track a variety of items in addition to inventory, including vendor information, re-order points, stock locations, barcodes and costs. With job- and time-billing modules, you can bill and track services by time or by job (including a mix of time-billed services and physical products). Depending on the accounting system you choose, you may have to purchase inventory, time-billing or job-costing modules separately. Some products limit the number of inventory items you can manage; we note the limits, if specified by the provider.
Productivity & Integration Features
Good accounting software should simplify your life by handling tedious work for you to help you increase your productivity. Tools in this category make routine tasks simpler or even automatic. Software packages may offer remote access, automatic backup, search tools, batch processing and other convenience features. Other productivity tools include mobile apps for time and expense tracking. The software may also provide integration features, such as the ability to work with payroll services, add POS workstations and process credit cards.
The ability to integrate with your bank feeds and payment methods can also help you increase your productivity. Most can import your bank transactions but we also considered whether it can support electronic and direct deposits. The best also can facilitate bill and vendor payments as well as print traditional paper checks. These banking integrations can help you keep your books more accurately and bills paid on time.
As companies grow, their accounting software packages need to adapt. Software should be able to incorporate new modules, adjust to more and different types of users, and accommodate a company's dispersion over multiple locations. If your company forecasts growth, check our scalability ratings, which note how easily, if at all, the software can support a growing company. We considered how simple it is to add modules or users, whether the software makes it easy to migrate data to an upgraded version, and whether the product can support more than one currency.
Whichever accounting solution you choose, it should simplify your bookkeeping and accounting tasks and grow with your company. All that adds up to quite a few considerations when selecting an accounting solution, but choosing the right software will be time well invested.