Every business needs a solid accounting software program to help them organize bills, pay taxes, track inventory, and create invoices. Accounting software programs save time because they allow the business owner to quickly create, send, and bill their customers.
It can help them organize their bills and create financial statements that can be used to determine the company’s profitability and tax requirements. These programs can be costly, especially if they are personalized.
Best Online Accounting Software for Small Business: QuickBooks
QuickBooks Online is an accounting software program that is loaded with features, easy to use, and reliable. It is a standard industry accounting package. The software is a great base package for any business.
You won’t see specific reporting options that work with your business exactly. However, the generalized reporting features offer a wide selection of data display options. You will be able to create reports that work the best for you and your business’s needs.
Best Alternative Software Option: Xero
Xero offers tools consistent with QuickBooks, but with a few added features. This includes things, such as, invoices that are more easily customizable, bulk editing options, complimentary payroll for up to 5 employees, and allows for unlimited users.
It is a less expensive option that offers a few additional features. The software mimics QuickBooks, and even includes a tool that allows for the information from QuickBooks to be transferred easily into the software.
Best Free Small Business Accounting Software or Bookkeeping Program: Wave
Wave is a perfect solution for small businesses. It is completely free and easy to use. It offer solid invoicing and accounting tools that businesses can use to track their business. It is also supported by a large network that helps answer questions and offer technical assistance.
Many small businesses choose this software, because it is free. It allows them to lower their expenses and maximize profits in the first years of their business. This can help them be successful without it costing them a monthly service fee or the full cost of a program.
|Monthly Costs||$ 13 per month for one user with limited billing and invoicing features||$ 9 per month for unlimited users, limited to 20 bank transactions and 5 invoices||Free for unlimited users, but no live chat support or phone support|
|Standard Package Costs||$ 40 per month for 5 users and including all features and included time tracking and inventory management||$ 30 per month with unlimited bank transactions, invoices, and payroll for up to 5 employees||$ 9 per month for live chat support
$ 19 per month for phone support
|Support Option||Cloud Based Support||Cloud Based Support|
|Features||Process payments, track time, payroll, and point of sale||Payroll, payment processing, automation, and invoicing||Payment processing, invoicing, and payroll|
|Integrations||Salesforce, Zoho, Basecamp, and many more||Base CRM, Shopify, Salesforce, and many more||PayPal, Stripe, Etsy, Shoeboxed|
|Customer Support||Live Chat, Phone, Email|
Best Company Accounting Software for Accounting and Bookkeeping for Small Businesses: QuickBooks Online
QuickBooks Online is a perfect fit for small businesses. It is a strong program that bookkeepers and accountants are familiar with. The online base can allow your businesses accountant access to the account instantly and it can be used without the install of a software program like in the older versions.
The online edition can be accessed by several users from anywhere. Your accountant can look at a transaction without coming into the office. It is great for small home-based businesses, because individuals can work on their home computer and see the same data.
Additionally, the software can send invoices and collect payments. The “Plus” package also allows for the management of the inventory, purchase orders, and even 1099’s for contractors. Bank transactions can be categorized and the information can be saved for automatic categorizing later on to save time.
The software can pull the transactions in from the bank, categorize them using memorized information, and create up to date reports with just a few simple button clicks. The software can also integrate payroll options and third party applications for an additional fee.
Xero: The QuickBooks Alternative
Xero is comparable to QuickBooks Online and offers a powerful accounting platform for small businesses. The advanced choice incorporates many of the same features as the “plus” edition of QuickBooks Online.
It offers the additional features like bank categorization, invoicing, purchase orders, 1099s, and advanced reporting, to name a few.
The main advantage is that Xero is $10 cheaper per month, which equals a whopping $120 per year savings for the same features. One of which is the complementary payroll service for up to 5 employees.
Many of the users have found that the Xero software is easier to use than the QuickBooks Online edition. This is likely because of the data export and import options and the bulk editing feature.
Something interesting about Xero is that they are growing in the US and gaining more market share. Currently, payroll is already supported in 36 states, with plans to expand to all 50 states. Additionally, there are several Xero-certified professionals available, but many more accounting professionals are familiar with QuickBooks. This is especially true in the smaller areas and rural populations. It may be harder to find an accountant that can work with the software come tax time.
Quality Accounting for Free: Wave Accounting
Wave Accounting is the best for contractors, sole proprietors, and freelancers, who have a tight budget and are in need of a very basic accounting program. It is a free invoicing and accounting platform, that works great for sole proprietors and small businesses.
It is perfect for those that have little to no accounting knowledge or those who feel overwhelmed by lots of complicated options that are available on systems that are more advanced.
The program allowed you to track expenses and revenue by linking them right to your bank account, scanning receipts, or entering them manually. Wave allows you to manage your receivables and payables, which is very amazing for a completely free program.
There are some other advanced tools that are available for small monthly fees. You can process credit card payments and send invoices. It is a comprehensive accounting system for small businesses that works totally free.
How do you know when it’s time to use a different accounting solution?
There are times when your specific business would be better off with a different type of accounting program. These were originally excluded from the list because they are not built for the majority of businesses. However, they are perfect for certain types of businesses, so if your business goes against the grain, these may be better options for you.
Zoho Books is an easy software program to use and it is very strong for accounting and invoicing program. The greatest advantage is that it integrates very closely with the Zoho CRM. It allows you to sync your contacts between the programs and then view some updates on the transactions in real time.
It makes the perfect accounting software for those who use Zoho. However, it is a newer program and that means there is a smaller user base. That means that it doesn’t have a large professional community as other accounting programs like QuickBooks.
Kashoo is your stripped-down program that is very basic. It works great for managing your accounts and keeping track of your bank transactions. However, it does lack payment processing features and payroll. You can send your clients their invoices, but they won’t be able to pay them directly.
It costs $ 5 per month, which is a bit more than the Wave Accounting system that is completely free. Wave offers a few extra features, but when you are looking for something that is not complicated, it is the perfect solution.
FreshBooks often is considered as an accounting program. However, the program is more comprehensive with a time tracking and invoicing suite. It is great for tracking your expenses and your revenue. It is not a formal accrual accounting program.
It is not the program for small businesses that have hundreds of transactions a month, but it is great for businesses that just need to track a few expenses and their revenue for the month. It is the best invoicing software on the market for small businesses, but is not great for use with accrual accounting or tons of transactions.
Detailed Comparison of the Top Accounting Software Options for Small Businesses
When you are looking to choose the perfect accounting software, you don’t want to just consider one or two aspects alone. It is important to think about where your business is going to be a year from now, five years from now, or ten years from now. You want a program that will work now and in the future.
Finding the right accounting software to meet your needs today and to meet your needs as your business grows is very important. You need to consider the price, along with the features, integrations, and support.
Price is one aspect that you have to consider when you are choosing your accounting software program. You will have to make sure that you are considering what you get from the paid programs that you won’t get from the cheaper ones or free ones.
Wave is the free option, and therefore the cheapest choice. However, when it comes to Wave, there is a lot that comes with it. When it comes to price, Xero and QuickBooks are almost the same. It depends on the features that you include. However, Xero is a bit less expensive.
QuickBooks Online Quality
There are three different versions of QuickBooks Online:
- The Simple Start Edition is $ 13 per month and is a basic program for invoicing and accounting. It is the perfect option for starters. QuickBooks is a great option, because you can upgrade the program that you choose when you like.
- QuickBooks Essentials Editions is $ 27 per month and allows you to set up reoccurring invoices for your customers. This upgraded edition allows the users to manage the bills and pay the bills. It is a great option for companies as they grow.
- If you are in need of the ability to print of 1099s, use purchase orders, or track and manage time with billable hours, the Plus Edition. It is $ 40 per month for this option.
The program allows you to set up other options and features within these various programs. These customizable options make the program work for your specific business and allows the programs to work for you to meet your needs.
Check out these payroll options that are available for an additional fee. It will allow you to start paying your employees and tracking the information right from your accounting program.
- Basic Payroll is designed to allow you to pay your employees using direct deposit. It is a great way to offer a comprehensive and easy program for handling your payroll expenses.
- Enhanced Payroll is designed to work with the basic payroll to include the electronic filing of payroll taxes. It can also allow you to pay contractors and 1099 workers.
- The Full Service Payroll option will handle all of your tax forms and other electronic payments that need to be paid. It will save time and can ensure that these are done correctly, so that you don’t get yourself in trouble by forgetting to pay them or not filing the paperwork properly.
The price for these programs vary depending on how many employees will be using the program and on which edition of the program you choose. However, the prices range from around $ 10 per month to $30 per month. There is an additional fee of $2 per month for each employee as well.
The main difference in pricing when it comes to wave is that it is completely free. That is unless you want to add payroll services or add additional support. The additional support charges are for live chat conversations and phone conversations. The email feature is free with the service.
Payroll options are additional fees, which makes Wave perfect for freelancers or small businesses without any or only few employees. The payroll services start at $ 15 per month for the base package, plus an additional $ 4 per month per employee over the first one. If your business grows to having over 10 employees, the fee is cut in half for services for over ten employees.
That way the services can grow with your business. You can start off with the free version and as your business grows and more employees are added, you can add the payroll services and take that stress off the table.
When it comes to pricing, Xero offers a very similar set up as QuickBooks. There are three editions available with Xero as well.
- The Starter Edition is ideal for when a business first begins. The fee is only $9 per month and that gives the key tools that any business needs. These include invoicing and 1099s, which are not included in the basic edition for QuickBooks. However, the plan is only limited to 5 invoices per month, 5 bills per month, and 20 reconciled bank statements. This limitation is one that does not allow for much versatility. However, it works great for companies that have long-term projects that take several weeks to complete.
- The Standard Edition is designed as a comprehensive service for businesses with more transactions and lifts the restrictions. It also allows for payroll for up to 5 employees for $30 per month. This is the popular edition because of the lack of restrictions and payroll options.
- Xero’s Advanced Edition is designed to integrate some support for multi-currencies and can allow for payroll of up to 10 employees for $70 per month. It works great for companies that are working towards creating a global presence.
Features Available and Possible Integrations
These programs all include some essential features, which include:
- Management of assets, liabilities, equity, income, and expenses
- Importation of bank statements
- Invoices sent to clients with payment link by credit card
- Generation of accounting reports like a Profit & Loss Statement or a Balance Sheet
- Support for multiple currencies
- Creation and management of budgets
- Creation of 1099s for contractors
QuickBooks Online and Xero offer additional features, such as:
- Automatic Categorization that allow you to categorize bank transactions using a keyword or a dollar amount.
- Allowance for the creation of purchase orders
- Advanced reporting options that utilize a larger range of options and reporting standards to help find the information that is important to your business.
The addition feature vary by the chosen program. To summarize the key features for comparison, it will be important to consider some of the features and integrations, along with the price and overall support.
QuickBooks Online offers additional features that you won’t find on either Xero or Wave in the Plus Edition. The main ones include the Inventory Management feature that is useful in many businesses. This feature will track the inventory as the sale is made and calculate your Cost of Goods Sold for you.
The Time Tracking feature is another great feature that is not included in the other options. This feature allows your employees to track how much time they spend of various projects. It is a great way to ensure that your valuable assets are managed properly. This can help you determine that time is not being wasted.
The integrations that QuickBooks Online uses are another key feature to consider when choosing an accounting program or software. They can integrate with many CRM software programs like Salesforce and Zoho. The program integrates with POS systems like Vend and Shopify. That way you can sync your software systems and access additional features that will help you run your business smoother for less.
Wave lacks the advanced features of the other programs. However, it does have a receipt scanning app that will help with the entering process and can save your receipts. These features are also offered with QuickBooks and Xero, but are from third party providers.
Xero’s most impressive feature is that you can add the payroll for no additional fee. It is only available in 20 states currently, but they are expanding fast. Also, you can use the service in 7 states and also e-file and e-pay your taxes. These states include Virginia, Utah, New Jersey, New York, Florida, and California.
There is no inventory management option with Xero directly, but this option can be handled by a third party provider if needed. Xero integrates with many third party providers for CRMS, eCommerce, and POS. That means that you can make it work for your business.
When you are in need of some assistance with your accounting program, support is important. You need to be able to get the answers to your questions, so that you know that you are entering your information effectively.
QuickBooks Online is the only option that offers phone support. Wave has phone support for the Advanced Edition users for the $ 19 per month. Xero doesn’t offer phone support at this time.
QuickBooks offers live chat, email, and phone support. They are available from Monday to Friday from 6 am to 6 pm PST and on Saturday from 6 am to 3 pm. It is supported by a database of certified professionals in the accounting profession.
Wave lets the free users email support and other support options for an additional fee. Wave has a sizable community of certified accountants that can search from the program’s major interface to assist with any issues.
Xero offers email support 24 hours a day and 7 days a week. Xero has a network of professionals that understand the Xero software.
Our Final Take on the Best Small Business Accounting Software
The best options for your business is QuickBooks Online and Xero. They are comparable in pricing and offer the features and services that your business needs to grow. You want to choose a program that will grow with your business.
Your business may be small now, but where will it be in five years. You want a program that can grow with your business. QuickBooks Online and Xero have the features that will work with businesses in many industries and can support businesses with one employee or more employees.
You want the versatility that allows you to grow and find the information that you need to maximize your profits and make the most out of your assets.
Wave is the perfect options for businesses that don’t need accounting support, have minimal transactions, and may not need support for a ton of employees. It is a perfect solution for freelancers, because they can have the support that they need to progress.