There are a ton of apps on the market today that are designed to help small business owners manage their businesses. There are apps for invoicing, apps for time tracking, apps for bill payment, and even apps for paying employees.
However, small business owners, particularly those who are wearing multiple hats in their business, would be better served looking for accounting software that does most of the work for you.
Sure, apps are great if you need to perform specific functions that your software currently doesn’t cover, but using only apps can confuse the situation and create a ton of busywork, which you likely have little time to complete.
If you’d rather spend more time working on your business and less time on bookkeeping basics, a good accounting tool is the way to go.
Here are our top picks for the best accounting tools for your small business:
What to consider when choosing an accounting tool
Each small business is different, with different needs and different employee skill levels. Remember, if you’re a service business, you likely don’t care whether an accounting product offers inventory management, while the gift shop down the street probably does.
Likewise, if you or your employee is still struggling to grasp the basics of accounting, the last thing you need is a complicated accounting application.
Here are a few things you may want to look for when deciding whether an application is right for you:
1. Features specific to your needs
Do you sell products? If so, you’ll want to look for an application with a good inventory module. Need to pay employees? Look for an application that includes payroll. By figuring out what features are most important to you and your business, you can more easily locate the application that is right for you.
2. Ease of use
If you’re just starting your business, or handling the bookkeeping and accounting yourself, the last thing you want is a complicated, cumbersome application that is painful to navigate through.
All of the applications in our list here offer a free trial, so spend a week or so giving an application a test run prior to purchasing in order to find the application you’re comfortable with.
If you’re always on the go, the last thing you want is an accounting application that ties you to the office. Instead, look for a cloud-based application that includes a good mobile app.
Make sure the mobile app contains the same features that are found on the full version. If it doesn’t, it may make sense to look elsewhere.
While pricing isn’t the most important factor, it can be the deciding factor when it comes to purchasing accounting software. This is particularly important for startups and businesses with limited cash flow.
The most expensive software doesn’t necessarily equate to the best product for your business, so find one that fits your needs and your budget.
If you’re a one-man or one-woman show, scalability isn’t really important, but if growth is in your business plan, then make sure you find an application that can grow along with your business.
Our favorite accounting tools for your small business
While most accounting programs offer the same basic features, such as a general ledger and automatic closing entries, some are better suited to smaller businesses, while others may be better for niche businesses such as e-commerce businesses and startups.
Each of the software applications included in our list offer standard accounting functionality, such as invoicing, cash management, and reporting capabilities, but by no means are these applications created equal. The key is not to look for the best accounting tools, but the best accounting tools for your business.
1. AccountEdge Pro
AccountEdge Pro offers both on-premise and cloud access, and is a great fit for small and growing businesses. AccountEdge Pro is probably one of the best applications on this list if you’re selling products, since it offers a comprehensive inventory management module.
The inventory module lets you track detailed information about each product, offers multiple pricing levels, and will alert you when stock drops below a certain level. It also includes builds and kitting capability for those that build their own inventory items from scratch.
AccountEdge Pro also offers a Shopify connector, syncing your inventory with online sales.
Along with inventory accounting, AccountEdge Pro offers solid accounting capability, sales and invoicing, time tracking, and a payroll module. A customer portal was recently added, making it easy for your customers to pay you online.
Reporting options are good in AccountEdge Pro, with reports available in a variety of categories and all reports fully customizable. AccountEdge Pro offers free email support, with telephone support available at an additional cost.
One of the best benefits of using AccountEdge Pro is its scalability, with four plans available to choose from, and if you need to pay employees, the application includes a payroll module.
Another benefit is the option to choose between the desktop application or online access, with a third option providing on-premise installation with cloud accessibility.
AccountEdge’s Basic plan has a one-time fee of $149, while AccountEdge Pro has a one-time fee of $399. For those interested in online access, Priority Zoom starts at $50/month, with ERP pricing available upon request.
If you’re just starting a business, there is no better application than FreshBooks, an online bookkeeping and accounting program particularly well-suited for sole proprietors, contractors, and consultants. FreshBooks also has a Teams version if you do add employees or contractors down the road.
Designed with the non-accountant in mind, FreshBooks guides you step by step through each accounting process on the first go-round. And with its Retainers option, it is particularly well suited to solo attorneys, accountants, or other self-employed professionals.
FreshBooks offers excellent invoicing capability, with the ability to create customized, professional invoices in less than a minute. You can snap a photo of a receipt and upload it to FreshBooks for better expense reporting.
The application also includes client project management, time tracking, and the ability to connect the application with any or all of your bank accounts.
You can create both job estimates and formal proposals in FreshBooks, and FreshBooks Payments lets you accept customer payments online. Reporting options are fairly limited in FreshBooks, though you do have access to necessary financial statements.
There are a lot of advantages to using FreshBooks, including telephone support. It’s also extremely easy to set up and start using, which is great for business owners without an accounting background.
FreshBooks currently offers four plans: Lite, which is $15/month; Plus, which is $25/month; Premium, which is $50/month; and Select, with pricing available from FreshBooks upon request.
3. QuickBooks Desktop
For years, QuickBooks Desktop was the go-to application for small businesses. Still popular, QuickBooks Desktop is a great option for traditionalists who prefer an on-premise software application.
QuickBooks Desktop is also the application of choice for niche industries, such as nonprofits, manufacturing, or general contractors.
Packed with features, QuickBooks Desktop can also be hosted on a cloud server if you absolutely need to have access to the application 24/7.
QuickBooks Desktop includes solid accounting capability, with the option to connect your bank accounts, and good invoicing and inventory management capability included in the application.
This makes it a great choice for speciality businesses, such as manufacturing, nonprofits, and contractors who desire a more industry-specific version of the application.
For instance, the manufacturing edition offers more advanced inventory management, while the nonprofit edition includes donation tracking and campaign management.
Reporting options in QuickBooks Desktop is exceptional, with QuickBooks Premier offering more than 150 industry-specific reports, which can be customized as needed.
One of the biggest benefits of using QuickBooks Desktop is access to the community forums, where you can share problems and solutions to common issues. QuickBooks support options include both telephone and email support, though wait times can be challenging.
QuickBooks Desktop currently offers three plans: Pro, which is $299.95/year for up to three users; Premier, which includes the industry-specific editions and supports up to five users, for $499.95/year; and Enterprise, which supports up to 30 users and is $849.10/year.
4. Zoho Books
If you’re a new business owner and an accounting novice, perhaps the most important thing you need to learn is how to invoice your clients properly. Zoho Books does that, and a whole lot more.
A good option for smaller businesses as well as sole proprietors, Zoho offers complete accounting capability in an easy-to-use package.
If you’re new to retainer or recurring invoicing, be sure to check out Zoho Books “Life Cycle of an Invoice,” which takes you step by step through the entire invoicing process, not only showing you what you need to do, but explaining why you need to do it.
Along with invoicing, Zoho Books includes good inventory management, sales and customer management, and good banking management, with the option to connect your bank accounts and credit cards to Zoho, making it easier to manage expenses.
Sales orders can be created, with vendor management capability included as well. A client portal is also included in the application that allows you to share invoices and accept online payments. Zoho reporting options are decent, with a variety of reporting categories offered and all reports customizable.
One of the biggest benefits of using Zoho Books is the plethora of resources geared toward the non-accountant business owner. This ensures that you’ll feel comfortable navigating through Zoho Books in a matter of minutes.
Zoho Books is scalable, with pricing based on number of contacts used. Newer businesses may want to start with the Basic plan, which supports up to 50 contacts and two users, and is available for $9/month.
Larger or growing businesses may be better suited to the Standard plan, which supports up to 500 contacts and three users for $19/month. The Professional plan, a bargain at $29/month, supports more than 500 contacts and up to 10 users.
5. Sage 50cloud Accounting
While some business owners are content with reporting basics, others desire more comprehensive reporting options. If that's you, check out Sage 50cloud Accounting, which offers some of the best reporting options around.
Along with complete financial statements, including balance sheet reporting, Sage 50cloud Accounting also includes general ledger, payroll, accounts payable, and accounts receivable reports.
All reports are fully customizable and can be exported to Excel for further customization. Good for small and growing businesses alike, Sage 50cloud Accounting also includes optional bank connectivity, customer and vendor management, and payroll capability.
The customer management feature allows you to effectively manage customer information, such as establishing credit limits, offering customer-specific discounts, and the ability to create customer quotes and full proposals.
Sage 50cloud Accounting also includes good inventory management capability, with the Premium and Quantum plans offering product assemblies as well.
One of the biggest benefits of using Sage 50cloud Accounting is its scalability. Another benefit is good budgeting capability for creating financial projections.
Product support options are good: Telephone, email, and chat support options are available to all registered users, with complete access to all product updates and enhancements.
Sage 50cloud Accounting is scalable, with three plans available: Pro, which is a single-user system, and is available for $299.95/year; Premium, which supports five users and is available for $1,105.95/year; and Quantum, which supports up to 40 users, with a 10-user system available for $1,978.95/year.
There are report people and there are dashboard people. If you’re a dashboard person and you’re looking for good financial dashboards, OneUp may be a good fit for you.
The easy-to-access, easy-to-understand financial dashboard provides you with a quick overview of your business finances, including current profit and loss details, cash flow, and income and expense breakdowns.
While dashboards don’t eliminate the need for financial statements — which OneUp also includes — the availability of these mini-reports helps small business owners keep a close eye on business financials without having to run a report each time.
Along with the dashboards, OneUp also includes easy onboarding in a six-step process, which allows you to enter all the necessary information in a logical sequence.
OneUp offers good accounting capability, including custom invoice creation as well as a good inventory management module. You can request payment from your customers on their invoice, with a link to online payment options.
OneUp offers optional bank connectivity, so you can choose whether you wish to connect financial institutions or enter information manually. Another bonus is that OneUp includes fixed asset management, a rarity in small business accounting applications.
OneUp is scalable, with five plans available: Self, which is $9/month; Pro, which supports up to two users and is $19/month; Plus, which supports up to three users and is $29/month;
Team, which supports up to seven users and is $69/month, and Unlimited, which is $169/month and supports an unlimited number of users.
Kashoo is a good fit for sole proprietors, freelancers, and very small businesses, and is one of the better options for those that want to keep track of income and expenses, but are uncomfortable connecting their bank accounts to an accounting application.
Kashoo offers four distinct activity areas; Actions, Lists, Reports, and Add-Ons. This makes it easy even for new users to jump in and get started using the application without the need to spend extra time learning the ropes.
The application uses a combined income/expense screen where you can record both income received and expenses paid. You also have the option to connect Kashoo to your bank account, but the income/expense feature makes it easy to record necessary transactions without connectivity.
Kashoo offers easy invoicing, with the ability to pay vendors electronically as well as by printing checks, another option that isn’t readily available in other applications. Kashoo also makes entering journal entries a snap, and the list feature lets you track client, supplier, and item details.
Kashoo reporting options are sparse, with only eight reports available, though complete financial statements can be run. Reports have limited customization, but can be exported to Excel if desired.
The benefit of using Kashoo is that it makes it easy for new business owners to enter financial transactions. Another benefit is that while you’re given the option to connect your financial institutions, Kashoo works just as well if you choose not to.
Kashoo offers a single plan at the cost of $19.95/month, or $199/year, and supports an unlimited number of users.
A great fit for freelancers, small businesses, consultants, and contractors, newcomer ZipBooks includes great time-tracking capability.
A great addition to any business that needs to track hours in order to bill clients, ZipBooks is a good option for solo attorneys and accountants, or any other professional who routinely bills for time.
ZipBooks users a built-in timer to track time, with the timer displayed at the top of the user dashboard for easy access. The timer can be started and stopped as needed, and you can record notes along the way for billing purposes.
ZipBooks offers good accounting functionality, with the option to link bank accounts. In addition, if you do link the application to a bank account, ZipBooks uses a built-in algorithm that assists in transaction categorization, remembering how a previous transaction was recorded, in order to record it properly.
Invoicing options are also available in ZipBooks, with the ability to customize invoicing as desired, with an option to add a payment link to any invoice.
Reports in ZipBooks are fairly basic, though the application does include intelligence reporting which includes a business health score.
One of the biggest benefits of using ZipBooks is that it offers a free plan, which allows you to start small and scale up to a paid plan when necessary.
Along with the free Starter plan, ZipBooks offers two paid plans: Smarter, which is $15/month and supports up to five users, and Sophisticated, which is $35/month and supports an unlimited number of users. An Accountant version of ZipBooks is also available for accounting professionals.
9. Accounting by Wave
One of the best accounting software applications for freelancers, sole proprietors, and micro-businesses, Accounting by Wave is completely free accounting software. And when we say free, we mean free.
Not just a few of the features, or a starter plan, but the entire application is free. You’ll only pay extra if you want to accept payments online through Wave Payments, or choose to use their payroll service.
Wave offers excellent invoicing capability, as well as the option to connect your bank accounts directly to the application. Recurring invoicing is also available in Wave, which is a time-saving feature for those who bill on a regular or retainer basis.
You can manage your customers in Wave, but the application offers limited opportunity to track customer details. Although you can add both products and services to Wave, there is no real way to track inventory movement, making it a much better option for service and consulting businesses.
Wave includes 12 standard reports, with financial statements available. Reports have limited customization capability, but can be exported to a CSV file for customization if necessary.
Wave’s no-cost price tag can be a huge benefit for small businesses and startups with a limited budget. The downside of the application is limited support availability, with support only offered by submitting a request. However, live email support is offered to those who purchase Wave Payments and Wave Payroll.
Accounting by Wave is 100% free for the entire accounting application. If you choose to accept online payments, you’ll be charged 2.9% plus a $0.30 fee for each transaction, a very reasonable price.
Wave Payroll currently charges a base fee of $35 per month, plus a fee of $4 per employee, though full service payroll is only offered in eight states.
If you’re an app person, you’ll love Xero. Designed for small businesses that want an application that is designed to be used on the go, Xero’s multi-currency capability also makes it a good fit for those who do business globally.
While Xero offers accounting features comparable to other similar products, its strong suit is its ability to integrate with more than 500 apps.
While this may not matter to the sole proprietor or freelancer, app integration can help fill the holes that are typically found in entry level accounting software applications, making it a great fit for niche markets like IT, startups, and e-commerce businesses.
The business interface in Xero offers quick access to invoicing, bill payment, and customer quotes, while standard accounting functions are found under accounting.
Xero discourages the use of journal entries in the application, recommending that you connect your bank accounts with the application to manage income and expenses, but it does include journal entry capability.
Xero also offers good project management, with the ability to track completion dates and performance throughout the life of the project.
Reporting options are fairly basic in Xero, though financial statements are available. All reports can be exported to Excel if needed.
Of course, the biggest benefit of using Xero is accessibility to all of those apps. It’s also great for those with limited accounting knowledge.
Xero offers three plans: Early, which has limited functionality and is $9/month; Growing, which runs $30/month; and Established, which is $60/month, and offers project tracking, multi-currency, and expense management.
Find the tools that work for you
Remember, small business accounting doesn’t have to be complicated, particularly if you find the tools that are right for your business. Get started by making a list of the features that are most important to you, find the applications that offer them, and test drive a few to find the one that is best for your business.
You can start by checking out the products in this list, or by reading all of The Blueprint’s small business accounting software reviews.