If you run a small business of any description you almost certainly need bookkeeping and accounting software. Yes, it’s possible to keep on top of your finances without it, but it really isn’t a lot of fun and will take more time than it's worth. At the very least, a good accounting software solution makes it easier, quicker and a lot less error prone. The right package can also provide business insights that help you to become a smarter, and ultimately more profitable, operation.
That’s as true for freelancers and sole proprietor businesses as it is for SMEs with 50 employees. In both cases, the less time you have to spend on basic accounting and bookkeeping functions, like chasing invoices or bank reconciliation, the better. Time spent filling in spreadsheets or manually calculating quarterly tax is time taken away from making a better business. In accounting, as in so much else, technology is your friend. A good solution can automate much of the drudgery of financial management.
With all that in mind, here’s our top accounting software picks for small business, based on various criteria and requirements. We've looked at both online cloud-based accounting software and ones that provide software as a service deployment. Some of the solutions we have reviewed offer both, for added flexibility.
1. QuickBooks Online: best for SMEs
This is a far trickier choice than it might have been just a couple of years ago, but overall QuickBooks Online is still the best complete small business accounting package on the market. QuickBooks has been doing this a long time, and it shows in a full-featured solution with a galaxy of third party integrations.
QuickBooks Online has the feel of being the only accounting solution a small business will ever need. It offers a comprehensive list of accounting and bookkeeping features and a raft of business management tools, too. The attention to detail is truly impressive. To take one example out of many, QuickBooks Online offers over 80 accounting reports, which is far more than most small businesses will ever need.
It’s also nicely laid out and, for such a comprehensive solution, fairly easy to learn and use. The software’s in-built templates are excellent, and its mobile app slick and useful.
QuickBooks isn’t the best at everything, but it does most things to a very high standard. We really liked Zoho Books and Xero in this category too, and Zoho at least is cheaper than its better known rival. But overall QuickBooks is still the full-featured small business accounting package to beat.
- Read the full review: QuickBooks Online
2. FreshBooks: best for freelancers and micro-businesses
In our review, we say that FreshBooks gives very small businesses everything they need and nothing they don’t. That is really the heart of this solution’s appeal. FreshBooks is great at invoicing, time keeping, project management and more. It doesn’t tie freelancers up in endless advanced accounting features they don’t need and won’t use.
And it is very good at what it does. Expenses are excellently handled. Invoicing is easy (as is chasing invoices once they are created and sent). It looks delightful and is a pleasure to use, in so much as small business bookkeeping can ever be a pleasure.
The latest iteration of the software also includes standard accountancy features like double-entry accounting and bank reconciliation, but many users of Freshbooks really want it for working up invoices in seconds, recording expenses and tracking time. At that, it is the best on the market, despite not being the cheapest.
- Read the full review: FreshBooks
3. Zoho Books: Best for small business
Zoho Books deserves an honorable mention in any list of the best accounting software for small business. The software has been flying under the radar for a few years now, gradually adding features and fans and at the same time refining its design and user experience. The result is a powerful accounting package for small business that is a match for sector leaders like QuickBooks Online and Xero.
With a starting cost of just $9 a month, it is also very competitively priced. For that, you get best-in-class invoicing, excellent contact management and a full list of accounting features. That includes more advanced tools like fixed asset management.
There’s also tax support, mileage deduction tracking, project management and time tracking, all built in to a clean and attractive design. There is a mobile app for Android, iOS and, a little unusually, Windows phone. Customer support is excellent.
There’s the odd gripe. Zoho’s integrations are some way behind those of QuickBooks, and it lacks a native payroll solution. But it is very good value for money and worthy of consideration.
- Read the full review: Zoho Books
4. QuickBooks Self-Employed: best for tax
QuickBooks Self-Employed is not a great accounting and bookkeeping package, even within its chosen freelancer and sole proprietor market. It doesn’t offer double-entry accounting, invoicing is basic and advanced features are thin on the ground. If your business grows, it can’t scale with you.
But QuickBooks Self-Employed is more a tax tool than true accounting software. It is aimed at self-employed people who need to track income and expenses, separate business from personal spending, and calculate quarterly taxes. It is very simple, and very good at what it does.
QuickBooks Self-Employed comes into its own with its handling of transactions, and their categorization for tax purposes. The software uses technology to extract data from smartphone receipt photos and auto-fill relevant categories, potentially saving freelancers a lot of valuable time. After asking you some basic questions on your tax filing status, QuickBooks Self-Employed takes all the information from your income and expenses to estimate your quarterly tax bill and annual tax projection.
If you are in the market for a more comprehensive bookkeeping solution, look elsewhere. If you just need a tax and expenses helper, QuickBooks Self-Employed is an accomplished choice.
- Read the full review: QuickBooks Self-Employed
5. Wave: best free
Wave may seem something of a shoe-in for this category by virtue of being free, but this is no cheap and cheerful solution with only price (or lack of) as a selling point. There’s no doubt that Wave does basic bookkeeping and financial management well, but it also goes beyond that. Invoicing and expense management are easy with Wave. It offers basic report templates and contact management. There are no limits on the invoices you can send or the contacts you can create.
Wave gives you a great deal for nothing at all, but of course there has to be trade off when you are getting something for nothing. There’s no time tracking or project management, and more advanced features like inventory are beyond its scope. But Wave provides freelancers with a powerful and efficient way to simplify their financial lives, keep track of spending and make sure they get paid on time for their work.
With that in mind, it is a bit of a bargain.
- Read the full review: Wave Accounting
The other cloud accounting software options
These are our standout accounting packages for small business, but all the others we reviewed are capable solutions with something to recommend them.
WorkingPoint, for example, is a very useful and user friendly bookkeeping and financial management solution. Its lack of a mobile app stops it from promotion to the very top division.
GoDaddy Bookkeeping is especially useful for Amazon, Etsy and eBay merchants, though may be a bit limited for other kinds of very small business. Kashoo’s single price point for multiple users may, for some, override a couple of obvious limitations.
Xero and Sage Business Cloud Accounting are both excellent solutions for larger SMEs. They lose out to QuickBooks Online only in one or two details. They boast comprehensive feature sets and, in the case of Xero, a huge library of integrations.
Try before you buy
There’s a lot to take in, and choosing the right accounting software for your small business does take some time and effort. Our best advice is to try before you buy. Every package we have reviewed offers a free trial period (either 14 or 30 days). Narrow down your choice to two or three and then take each for a test drive. That way you’ll be sure you are getting the very best small business accounting solution for your needs.
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