Small businesses benefit from accounting software as it helps owners have a clear understanding of their profitability, track accounts receivable and payable, and be prepared for tax season. There are various types of accounting software for small businesses with varying price tags and capabilities. Two common factors that can help a small business owner choose an appropriate accounting software are the number of workers and the type of industry. But keep in mind that a freelancer wouldn't need the same accounting software features that a restaurant owner would -- so it's important to pick the right solution for your team. Here's a list of highly-rated accounting software best suited for small businesses:
QuickBooks Online
- Cloud-based
- Mobile app
- Scalable
- Integration with third-party applications
- Commonly used by accounting professionals
When it comes to selecting accounting software, this is a great option. A majority of small business accounting professionals use QuickBooks Online. There are also plenty of online training resources and forums for support whenever needed. It makes bookkeeping more efficient and fluid by allowing its users to conveniently access all accounting features on one main dashboard.
Xero
- Mobile app
- Simple inventory management
- Cloud-based
- Third-party app marketplace
- Payroll integration with Gusto
For micro-businesses that are seeking extremely simple accounting software, Xero is one of the best options. This software fully integrates with a third-party payroll service and has a clean interface. Businesses can easily collect payments online from customers via Xero's integration with GoCardless and Stripe.
FreshBooks
- Affordable
- User-friendly interface
- Cloud-based
- Advanced invoicing features
- Third-party app integration
The most important accounting need for almost all service-based businesses is invoicing. In comparison to other accounting software, FreshBooks offers more customizations for invoicing. While its primary function is to receive, print, send and pay invoices, it can also take care of basic bookkeeping needs. This accounting software makes it quicker for service-based firms to receive payments, send proposals and invoices, request deposits, track time on projects, and collect client retainers.
Wave
- Mobile app
- No billing or transaction limits
- Free invoicing, receipt scanning, and accounting
- Run multiple businesses in one account
- Unlimited number of users
This is an ideal software platform for service-based small businesses that want to send simple invoices and don't need to run payroll or track inventory. For many service-based businesses or freelancers, Wave's free features will cover all their accounting needs. To prepare tax returns, accountants can get the necessary reports from Wave at year-end.
