Top 5 Best Small Business Accounting Software | Ranking | Online and Business Accounting Tools

(List is sorted alphabetically)

Why Get Accounting Software for Your Small Business?

The best accounting software will make it significantly easier to manage all things accounting. Good accounting software can track a number of things. To name a few:

• Money your company owes to others (accounts payable)
• Money others owe to your company (accounts receivable)
• Expenses incurred on the job
• Payroll and payroll taxes

Accounting software is designed to make many of the fiscal elements of running a business more palatable. This frees up your time as the business owner—and potentially your employees’ time—by streamlining the billing process.

Below, please find the detailed review of each small business accounting software on our list of best accounting software for small business. We have highlighted some of the factors that allowed these online accounting software offerings to score so high in our selection ranking.

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FreshBooks Review

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FreshBooks started back in 2003. Since then, it has grown to accommodate more than five million users. FreshBook users can be found in more than 120 countries around the world.

Using FreshBooks, customers have collected more than 14 billion dollars. Part of this small business accounting software’s popularity stems from its accessibility; it can be used on tablets, mobile devices, and both Mac and PC desktop computers.

Key Factors That Enabled This Software to Rank as One of the Best Accounting Software for Small Business

Below are primary reasons we selected FreshBooks to be rated as one of this year’s top online accounting software offerings.

Accessibility:

As we stated earlier, part of what makes FreshBooks some of the best accounting software for small business is its accessibility. Forbes took note of FreshBooks’ high-caliber user-friendliness, giving it a 97.3% customer satisfaction score. Because it works on mobile devices, tablets, and multiple operating systems, small business owners and employees can check in on their business wherever they are.

FreshBooks also offers a 30-day trial. The next best thing to free accounting software is great business accounting software with a free trial. FreshBooks gives you 30 days, completely free, without a contract, and they don’t even take your credit card information until that trial period expires.

• Emailing directly to clients
• Printing and mailing
• Downloading as a PDF

Credit card access can be set up on the first day of using FreshBooks. This means you don’t lose any business while you wait for credit card services to activate. When making the switch to this small business accounting software, you won’t have to worry about interrupting your income flow. FreshBooks accommodates billing in any currency and allows default currencies to be set for your clients.

Recurring invoices and auto-billing clients’ credit cards are two other features included in FreshBooks. FreshBooks also logs when the client views the invoice, and clients can pay right from the invoice when they open it, even on their mobile device. Reminders and late fees can be sent and added to invoices if the client is slow to pay. Android and iOS apps mean you can send invoices directly from your mobile device.

Tracking Information

FreshBooks has a number of tools to keep your business running smoothly. Expenses, for example, are all stored in a single, organized digital space. You can use your mobile device to take pictures of your receipts right away for effortless filing. FreshBooks automatically imports and categorizes bank statements and credit card statements. For expenses:

• Attach expenses directly to an invoice to be billed to a client
• Review expenses with filters to see where money is going

To see where you’re spending money, you can search through expenses database using filters, including:

• Date range
• Client
• Project
• Vendor
• Category

FreshBooks also provides billable hour tracking, where you can record your billable hours from any device. Then, you can add your unbilled hours to the appropriate invoice with only a few clicks. You can see an overview of time spent on projects to make sure you’re on track for your time estimates, and multiple team members can track hours at the same time.

Billing history is readily accessible. Reviewing the history is made even easier with search features. You are able to sort through information using filters like:

• Client
• Date range
• Invoice status

FreshBooks also shows which clients aren’t paying with “accounts aging” and “time to pay” reports. Filing journal entries and generating dozens of standard business reports—like profit and loss reports—makes tax time easier for you.

Payments:

FreshBooks transfers payments to your account in as few as two days. There is no minimum amount required to perform a transfer. The FreshBooks dashboard summarizes upcoming and recent deposits, keeping money-tracking matters easy to manage.

Credit card transaction fees are captured and categorized as expenses automatically. The pricing is 2.9% plus $0.30 per transaction for most credit cards—American Express is 3.5% plus $0.30 per transaction. Credit card services are available for the United States and Canada. Outside of these countries you’ll need to link PayPal, Stripe, or Authorize.net with your FreshBooks account.

Security and Support:

FreshBooks uses servers hosted by the same company that stores huge amounts of data for companies like Pfizer and General Electric. Your data is backed up to these secure servers.

Telephone support is available from Monday to Friday, 8 a.m. to 8 p.m. Freshbooks is also the Gold Stevie winner for sales and customer service in 2014.
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NetSuite Review

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NetSuite is an online accounting software, established back in 1998, with the goal to be the first company to deliver business applications over the Internet. They developed this vision and became the first cloud-based company offering business accounting software.

NetSuite serves more than 30,000 organizations across 160 countries around the globe. As of July 28th, 2016, Oracle reached an agreement to acquire NetSuite. This scalable accounting solution is selling for 9.3 billion dollars.

Key Factors That Enabled This Software to Rank as One of the Best Accounting Software for Small Business

Below we’ve compiled a list of some of the most compelling reasons why NetSuite has made our list of best small business accounting software.

One-Stop Shop:

NetSuite is designed to cover many aspects of your business, including accounting, inventory and supply chain, order management, and more.

NetSuite, as its name implies, equips you with a suite of software tools that let’s you easily manage all business elements in one place. A major perk of getting these services from NetSuite is the automatic software upgrades. NetSuite implements the software for you and also keeps all of it up-to-date, so you always have the latest, most powerful version of the software offered in their online accounting software services.

Another benefit to using NetSuite is the transparency and accessibility of information across different elements of your business. For example, the accounting division and the sales division have access to the same, real-time information. This can help different sectors of your business make informed decisions quickly. The linked information helps streamline the lead capture, sale, order fulfillment, and invoicing process.

Marketing, sales, and support can all access the same information. This can eliminate redundant work. This could in turn minimize time wasted on repetitive information filing when dealing with the same clients across multiple business divisions.

The NetSuite dashboard provides easy access to real-time data insights. You’re also able to access all current leads and direct them to available sales reps. As they engage with the leads, the sales reps can make a closing forecast. This allows them to make predictions like:

• Likelihood of closing with the lead 
• Projected amount of the sale upon closing

Scalability:

As your business grows, NetSuite claims its business accounting software can grow with you. They have different options for different business sizes and types. A small retail business has different needs than a large software business, and NetSuite has made sure to tailor their offerings to match the business. In the same vein, a small business of 10 people has different needs than a medium business with 60 people. Netsuite claims to address these differences by customizing the online accounting software options specifically to your business.

To accommodate growth, NetSuite makes it easier to:

• Add new product lines
• Engage in new channels
• Enter new markets

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QuickBooks Review

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QuickBooks is a product developed by Intuit. Intuit started back in 1983 by offering software for personal finance, known as Quicken. Even if you haven’t heard of Quicken or QuickBooks, you’re likely familiar with one of Intuit’s other products: TurboTax. Ads for TurboTax might still be bouncing around your mind, since tax season is only four months back in that rearview mirror.

Through these main offerings, Intuit managed to generate over $4 billion in revenue. Their software offerings have reached and assisted customers across four continents. The Intuit headquarters are housed in California.

Key Factors That Enabled This Software to Rank as One of the Best Accounting Software for Small Business

Below are some of the elements we found compelling enough about QuickBooks to name it one of this year’s best small business accounting software.

Pricing:

QuickBooks offers several different pricing plans based on the size of your business and your specific software function needs. Independent contractors can use QuickBooks for $10 per month. QuickBooks commonly offers a 50% discount for the first six months of software use.

The independent contractor plan offers features that easily separate business expenses and personal expenses. The software also maximizes user deductions through the use of schedule C classifications. It makes paying taxes less stressful with an automatic estimate calculation of quarterly taxes.

The small business offerings are divided into three different plans:

• Simple Start: $15 per month
• Essentials: $30 per month
• Plus: $40 per month

QuickBooks offers a 30% discount introductory rate for the small business plans. This means the first six months of each plan would cost $10, $21, and $28 per month, respectively. With the Simple Start plan, users get three distinct features:

• Track income and expenses
• Create estimates and invoices
• Sync bank accounts and apps

The Essentials plan comes with the Simple Start features, as well as two others:

• Manage and pay bills
• Generate sale and profit reports instantly

The Plus plan—the most inclusive plan—comes with all the features of the Essentials plan and also includes:

• Inventory tracking
• Preparation and printing of 1099 forms

Payroll:

QuickBooks gives you the option to save more money on your plan by including their payroll feature. With payroll, QuickBooks lets you handle it yourself if you’d like, or you can have an expert at QuickBooks do it for you. Both options cost additional fees.

• Self-serve payroll adds $31 to the plan
• Full-serve payroll adds $79 to the plan

Additional fees of $2 per employee per month are charged to use the payroll features. The payroll feature lets you pay employees and file payroll taxes for your business. If you opt to have QuickBooks run your payroll, the business accounting software’s payroll experts will pay your employees and file your payroll taxes for you. That option includes an error-free paycheck distribution and payroll tax filing guarantee.

Accessibility and Features:

You can access QuickBooks from your mobile device with the free mobile app. This means you can email invoices on the go, as well as accept online payments and mobile payments. You can also connect PayPal, Square, and other payment options to your QuickBooks account, giving your clients more opportunities to pay you what they owe.

QuickBooks has other features to simplify your accounting:

• Set up recurring payments
• Track expenses
• Photograph receipts with your phone (to save and file them)
• Record and pay bills from vendors
• Sync your bank account to manage credit card and bank transactions
• Generate typical reports (balance sheets, profit and loss reports, etc.)

Support and Security:

Support for QuickBooks is free of charge. They offer telephone support from 6 a.m. until 6 p.m. every weekday. A 60-day money back guarantee is in place for QuickBooks. In addition, they offer a 30-day free trial for new users. Your information is backed up every day using encryption in an effort to make it safe and secure.
Read More: Top Financial Planning Software for Individuals (This Year’s Ranking)

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Wave Review

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Wave takes its role as small business accounting software very seriously. Its software is designed specifically for companies with 9 employees or fewer. Wave’s online accounting software is based in the cloud, and it’s “accountant approved.”

Wave serves more than 1.7 million customers across 200 countries worldwide. Wave has handled $80 billion in income and expenses for its customers. Since its inception, it has tracked more than 236 million transactions.

Key Factors That Enabled This Software to Rank as One of the Best Accounting Software for Small Business

Below are some of the most significant reasons we selected Wave as one of the year’s top small business accounting software options.

Free to Use:

Unlike the other small business accounting software featured in this review, Wave is free. And for free small business accounting software, it does more than you’d expect. Wave claims it is “approved by accountants.” There are no limits on invoicing and no “tiers” to upgrade to via monthly premiums. You can use Wave for free and have access to just about all it has to offer.

Wave features other companies within its software. You’ll see offers from companies like Dell, Microsoft, and American Express. Despite these third-party companies showing up within the Wave platform, none of your personal information is ever shared. The third-party offers serve a dual purpose; they pay for you to use Wave, and they expose you to potentially beneficial offers from these other companies.

Features:

Wave offers a number of basic accounting features that you’d expect from pay-to-use small business accounting software:

• Unlimited invoicing
• Professional reports (sales tax reports, balance sheets, etc.)
• Access to invoicing and payroll whenever you need it
• Account linking to PayPal, bank accounts, and other monetary sources
• Transactions appear in real time

Pricing:

Wave does charge for one service, and it’s payroll. They add decent benefits to make it more worthwhile:

• Takes only 60 seconds to sign up for payroll services
• Direct deposit is included
• Check printing is included
• Payroll reminders can be sent to your email inbox
• Appropriate records are kept to expedite year-end filings
• Free support is offered through email and chat, as well as over the phone

Wave charges a base fee of $15 per month for payroll. For each employee, add an additional $4 fee. If your business has 11 or more employees, the fee drops to $2 per employee. This payroll pricing is reasonable compared to market pricing, especially considering it’s built on top of free accounting software.

Xero Review

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Xero was founded in 2006 in New Zealand. In the past decade, Xero has grown considerably and now employs 1400 people. Forbes listed Xero as one of the world’s most innovative growth companies in both 2014 and 2015.

According to Xero, they have more than 700,000 subscribers around the world. The transaction amount they have on record is staggering. They claim to have tracked more than $1 trillion (NZ) across all accounting transactions in their business accounting software.

Key Factors That Enabled This Software to Rank as One of the Best Accounting Software for Small Business

Below are some key features we used to rate Xero as one of this year’s best small business accounting software choices.

Accessibility:

Xero claims that data from QuickBooks can be transferred over to Xero in 3 hours or less. The Xero Dashboard lets you view different elements quickly:

• Invoices
• Bills
• Bank account balances
• Expense claims

New transactions can be added with a single click, and cash flow is shown in real time.

Xero offers a 30-day free trial. There are more than 500 third-party apps that are compatible with Xero, each one enhancing a particular service differently. These apps offer advanced features for a variety of business elements:

• Inventory control
• Invoicing
• Time tracking
• Expense tracking

Invoicing:

Every time a customer opens your invoice, Xero will log it so you can see the activity. It doesn’t just log the first time the invoice is opened, Xero logs every time an outstanding invoice is opened. The invoices also include one-click payment options for your clients.

Your custom invoices can be scheduled to recur, as can bill payments. Xero tracks the payments, returns, and the return credit automatically. Xero’s mobile functionality means invoices can be sent on the go.

Currency can be converted automatically with this business accounting software. Invoices can be sent out in bulk, and you are able to set “expected payment” dates. Xero will show you both the overdue invoices and the clients who owe you the most money.

Returns:

You can handle returns by applying credit to invoices. Or, if the credit needs to be applied to a future invoice, you can arrange that through Xero. By applying a credit note, you’ll receive an outstanding credit alert the next time you generate an invoice for that client.

Payroll:

Xero’s business accounting software automatically completes your tax calculations and updates the tax rates for you. Timesheets are built in to the payroll aspect of Xero, making it easy to track time and attendance, minimizing your compliance risks. Payroll is only available in certain parts of the US. It also includes other features:

• Direct deposit
• Customizable check printing
• Easy tax-filing via online payroll

Storage:

You are able to store files in Xero through two methods:

• Drag and drop the file into the software
• Email the file to your software account

Most file types are accepted. Bills, supplier invoices, and even client photos can be uploaded to Xero, letting you store all your business-related files in one place.

Features:

Xero supports a number of other features:

• 1099 generation
• Budget creation
• Financial report generation (profit and loss, management reports, sales tax returns, depreciation schedules, etc.)
• Inventory tracking
• Profit margins on inventory sales

Support:

Xero offers support at all hours during the week. Xero claims they value your time, and so their support team is able to respond quickly to inquiries. In addition to support from a human representative, Xero has an extensive help database:

• Tip panels provide guidance from the outset
• How-to guides and videos give instructions for current software and any updates
• Online help center provides up-to-date information on all of Xero’s features
• Free webinars from experienced Xero staff
• Online community allows for collaboration with accountants, bookkeepers, and other business owners using Xero

​Related: Tips—How to Select the Best Budgeting App

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Conclusion – Top Five Best Small Business Accounting Software

Business accounting software is supposed to make your life easier, regardless of your industry or business size. As this ranking shows, the best small business accounting software options aren’t all made equal. To get the most out of the software, you have to find the one with the right set of accounting tools for your specific needs.

The pricing options for small business accounting software scale pretty consistently with services offered across the ranking list. It’s possible to soothe your accounting woes without breaking the bank. Or, if you need high-powered accounting that can keep up with the growth of your business, you can find that as well.

Take advantage of a free trial to see what some of the online accounting software options can do, or schedule a free consultation if your preferred software offers that. The good thing about choosing between some of the best accounting software for small businesses is that making the choice is the hardest part. Once you implement your online accounting software, your accounting future will likely look much brighter.

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