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5 Best Accounting Software For Small Businesses

by Scott Max
I'll offer two ways to find the tool, software or service you need, keep reading our breakdown and recommendations, or tell us about your business and the problem you are trying to solve and we will advise you for free!

So, you are in the market for an accounting software that suits small businesses.

Ideal, because in this article we have our compilation list for our top picks, and we compare the features and pricing for you. 

If you just want the best choice, we’ve added that right at the top of the article as this was what is most requested by our customers. So, that’ll be the “can’t go wrong” option. 

Otherwise, feel free to explore all the options we’ve reviewed on the market to find something that might fit you a little better.

Enjoy the list!

The Best Accounting Software Specifically For Small Businesses

Small businesses have to organize their finances, maintain tax compliance, handle expenditures and do critical reporting to evolve financially. Accounting software that offers analytical tools, banking connectivity, invoicing, and swift reconciliation will be the perfect match for this category. Have a look at the products below to choose the best accounting software specifically for small businesses:

1. Wave

Wave is a renowned accounting platform that offers free invoicing and accounting features. It offers a user-friendly dashboard, easy to comprehend and work on. Wave helps you stay organized and manage tax billings or invoices like a professional. It provides you with a completely accurate picture of your business's current financial health.

Wave Features

Here are some exclusive features of Wave:

Invoicing: Wave helps you avoid chasing clients for payments and adopt a more professional approach by sending invoices. You can get paid through credit cards and let Wave handle the payment reminders. Wave automatically syncs the data into your account books and identifies recurring billings for repetitive clients.

Banking: Wave offers built-in bookkeeping and a Wave money bank account for single-owner business owners in the United States with a Wave account. You can avoid the monthly and transfer fees without making long-term commitments. Wave provides faster access to funds, and you can use instant payouts upon qualifying the eligibility criteria.

Payments: Wave enables you to accept online payments for your business. It enhances your brand and provides a more professional outlook when you enable payment. Additionally, you can send personalized invoices to the clients with a link to the payment gateway.

Payroll: Wave offers a simplistic payroll software that allows you to manage tax filings and contractor or employee payments. Moreover, your employees can access the payroll database to view their banking information or pay stubs. Wave allows small business owners to safeguard their business profit margins by simplifying annual audits.

Accounting: Wave saves you from doing manual receipt entry by automatically syncing bank statements with the account books. Wave's smart dashboard assembles your financial expenditures and earnings with a comprehensive view. Additionally, Wave offers 256-bit encryption to protect your account information and card details.

Wave Pricing

Wave offers 6 Tools for various business accounting requirements.

The "Invoicing" tool is free and allows you to create personalized invoices that reflect your brand.

The "Accounting" tool is free and offers unlimited income and expense tracking. You can view overdue invoices and profit-loss margins.

The "Banking" tool is free and offers transaction segmentation to sort personal and business expenses. 

The "Payments'' tool offers pay-per-use pricing. You'll be charged 2.9% + $0.60 USD per transaction on credit cards, 3.4% + $0.60 USD per Amex transaction and 1% per transaction on bank payments.

The "Payroll" tool is priced: at $35/month in tax service states and $20/month in self-service states.

The "Advisors" tool is priced at $149/month and provides bookkeeping support. Additionally, you can get accounting and payroll coaching for a one-time fee of $329.

2. FreshBooks

FreshBooks offers Bookkeeping and Accounting features to help businesses and freelancers organize their finances. It provides an easy-to-use interface built for regular users and accountants. FreshBooks is made for all business sizes and adapts according to your company's accounting needs.

FreshBooks Features

Here are some exclusive features of FreshBooks:

Accounting and Reporting: FreshBooks offers double-entry accounting tools to ensure tax compliance and accuracy. It helps you comprehend the financial status of your business and make intelligent choices to grow your brand further. FreshBooks identifies revenue items and expenses, providing an accurate profit-loss margin. Moreover, your accountant can access intrinsic financial information and reporting whenever needed.

Payments and Estimates: FreshBooks seamlessly links with several online payment channels like Stripe. It lets your clients pay directly through the invoice without additional hidden fees. Additionally, FreshBooks allows you to set realistic expectations by eliminating the guesswork and doing data-driven estimates. You can convert your estimates into an invoice or create new proposals to win projects.

Time-Tracking: FreshBooks provides an inbuilt time-tracker that helps you accurately determine the task duration. FreshBooks automatically logs the time spent on the client project and enables you to prepare detailed invoices or keep track of employees' working hours.

Mileage Tracking: FreshBooks offers a tracking application that automatically logs your business trips and saves your travel history. You can claim business trips as expenses during tax filings. FreshBooks records the total distance travelled by your business vehicle and various professional trips taken by you.

Client Management: FreshBooks enables you to prepare client estimates and build better relations by accurate billing. You can inform clients about the latest expenses and increase trust by improving connectivity. FreshBooks allows you to track loyalty discounts and foster loyalty with clients.

FreshBooks Pricing

FreshBooks offers 4 Pricing options for its accounting software.

The "Lite" plan is priced at $4.50/month and offers unlimited invoices to 5 clients. Additionally, you can track expenses and sales tax, send total estimates and get paid with credit cards or bank transfers.

The "Plus" plan is priced at $7.50/month and offers unlimited invoices to 50 clients. Additionally, you can automatically capture receipt data, send endless proposals, run business health reports and set up recurring billing or client retainers.

The "Premium" plan is priced at $15/month and removes all limitations on invoice recipients. Additionally, you can track project profitability, customize email signatures, run accounting reports and get paid with checkout links.

The "Custom" pricing option offers an on-demand quote. It removes the FreshBooks branding from the client emails and provides a dedicated account manager.

3. Akaunting

Akaunting is a free cloud accounting platform that offers bookkeeping tools for SMEs. It provides feature-rich software that tracks your transactions and invoices constantly. With Akaunting, you can make the portal accessible for your clients and share receipts or accept bulk payments.

Akaunting Features

Here are some exclusive features of Akaunting:

Free and Open-source Platform: Akaunting does not involve any hidden set-up fees and offers an entirely free accounting platform without any limitations. Moreover, due to its open-source nature, you can install Akaunting on your host and make changes to intrinsic features. Akaunting enables you to see and assess your financial situation online from anywhere.

Customer and Vendor Management: Akaunting allows you to create vendors and assign them bills or payments. Similarly, you can generate client contacts and send them invoices. You can also set up a client portal for your customers so they can view their assets and account books. Akaunting lets you filter the transactions easily and file them under the correct address.

Powerful Reporting: Akaunting offers detailed financial reports to help you visualize the relevant information to improve your business. You can see a graphical depiction of your account books to analyze the current economic affairs of your business. Akaunting provides quality insights that help you file accurate returns.

Customer Summary: Akaunting integrates with several CRM and project management tools to help you import client addresses. Moreover, Akaunting automatically created the customer profile with the correct address, list of transactions and paid, open or overdue totals at a glance.

Multi-Currency: With Akaunting, you can send invoices or add expenses in any currency and let the system convert the balance into your main denomination. It allows you to get the exact exchange rate and accept payments globally. Moreover, Akaunting automatically comprehends repetitive actions and executes them in a precise fashion periodically.

Akaunting Pricing

Akaunting offers 2 Pricing options for its accounting platform.

The "Free Cloud" plan offers one user account and is priced at $0. Additionally, it provides live currency rates, a billing calendar, a dedicated accountant profile and community support.

The "Premium Cloud" plan is priced at $36/month and offers unlimited user accounts. Additionally, it provides bank feeds, balance sheet and trial balance, general ledger, manual journals, chart of accounts and a client portal.

4. Xero

Xero is an intuitive and beautiful accounting software that helps you run the money side of your business. You can create and send quotes, manage bills, sort bank transactions, chase payments and analyze financial data. Xero provides you with a cloud-based accounting platform, accessible invariably from any remote location.

Xero Features

Here are some exclusive features of Xero:

Bill Payments: Xero helps you make timely bill payments by providing a clear overview of accounts payable and cash flow. You can schedule and make batch payments, plus access all bills inside your Xero interface. With Xero, you can build good relations with suppliers by avoiding late payments and keep the money flowing timely.

Claim Expenses: Xero provides an expense manager to help you capture costs to reimburse expense claims. You can monitor employee spending and approve claims without delay. Additionally, you can use OCR technology to scan vital information and auto-fill your claim.

Bank Connections: Xero connects with your bank accounts and sets up a feed where transactions flow securely. You can set multiple feeds for different accounts. Xero lets you reconcile daily and provides; an accurate depiction of your business finances. All your bank transactions are securely imported between the Xero database and Bank.

Invoicing and Payments: Xero lets you accept payments online through Stripe, GoCardless and other integrations. You can generate invoices and add a "Pay Now" button to redirect clients to the payment gateway. Additionally, Xero offers excellent online protection from fraudulent activities and has an unbreachable database.

Project Tracking: Xero offers a job tracker helping you track costs and project profitability. You can prepare budgets by using cost estimates and send customized quotes. Moreover, Xero allows you to do location-based tracking on Mobile and seamlessly link costs to projects.

Xero Pricing

Xero offers 3 Pricing options for its Accounting software.

The "Starter" plan is priced at $22/month and allows you to send upto 20 invoices. You can reconcile bank transactions and capture bills or receipts through Hubdoc.

The "Standard" plan is priced at $35/month and offers bulk reconcile transactions. Moreover, you can manage short-term cash flow and get a business snapshot of your current finances.

The "Premium" plan is priced at $47/month and allows you to send unlimited invoices. You can use multiple currencies and access all accounting features of Xero.

Additionally, Xero offers 3 Add-on packs. The "Claim Expenses" is priced at $4/month, and The "Track Projects" and "Analytics" are priced at $7/month.

5.Sage 50 Cloud

Sage 50 Cloud offers robust accounting and finance capabilities to enhance work efficiency. It reduces the time spent on admin tasks and provides substantial clarity on your performance. Moreover, Sage offers a vast ecosystem of business and customer relation tools, making 50 Cloud ideal for ever-growing businesses.

Sage 50 Cloud Features

Here are some exclusive features of Sage 50 Cloud:

Cash Flow and Invoicing: Sage 50 Cloud offers a cash flow manager inside its platform, giving you instant updates on your cash flow. You can see your cash account balance and expected receivables or payables to get a clear image of your gross profit. Moreover, Sage 50 Cloud lets you get a granular look at your finances by customizing the cash flow settings.

Payments and Banking: Sage 50 cloud allows you to see the payable accounts and offers banking features like regular transaction feeds, account reconciliation and online payment. Moreover, you can eliminate the manual entry with Sage 50 Cloud as it's integrated with a pre-built asset management system.

Advanced Inventory Management: Sage 50 Cloud offers an inventory management system, allowing you to view quantities on hand and execute purchase orders accurately on time. You can track costs and product lists using Sage 50 Cloud to input transactions. Additionally, Sage 50 Cloud automatically computes the price and quantity by item code, adjusting the inventory accordingly.

Job Costing: Sage 50 Cloud offers greater insight into your ongoing jobs and projects, allowing you to see where you're spending your budget. Moreover, you can estimate the net revenue on every project, set up job records or print project reports for clients. Sage 50 Cloud lets you use cost codes and generate relevant information, enabling you to adjust the budget before the project completion.

Payroll: Sage 50 Cloud simplifies your payroll procedures by offering direct deposits and pay cards. You can monitor employee records and the tax status of the staff under your payroll. Sage 50 Cloud allows you to manage vacations or pay wages at an hourly rate within its accounting platform.

Sage 50 Cloud Pricing

Sage 50 Cloud offers 3 Pricing options for its accounting and payroll management tools.

The "Pro Accounting'' plan is priced at $33/month and offers one user account. Additionally, you can use invoice and bill tracking, Reporting tools and Sage Security Shield.

The "Premium Accounting" plan is priced at $55/month/user and is expandable to upto five user accounts. Additionally, you can use advanced budgeting tools, audit trails and industry-specific functionality.

The "Quantum Accounting" plan is priced at $91/month/user and is expandable to upto 40 user accounts. Additionally, you can do workflow management and use advanced job costing.

Why use Accounting Software at all?

Accounting and bookkeeping are necessary for every business to stay precisely tax compliant, manage receivables and payables and spot profits or losses. However, it's an excruciating, highly error-prone task if you depend upon manual entry. Accounting software allows you to centralize your financial affairs and maintain data records.

Accounting software is perfect for firms or freelancers dealing with several transactions daily. It connects with your bank accounts and provides regular updates through feeds. Moreover, you can get paid directly from the invoices and swiftly reconcile bank statements with the database.

Why should Small Businesses use Accounting Software?

Many small businesses wonder whether they really need accounting software. Some don't want to increase business expenses, while others consider their business too compact to require an accounting tool. However, even smaller companies must grow, employ people or take loans.

Accounting software helps businesses maintain financial data and display it in important reports, enabling you to analyze your revenue streams and share data with important role holders. Most accounting software assists you with invoicing, payments, payroll and taxes.

All businesses must utilize their accounting software to comprehend the numbers, profit, assets, liabilities taxed and cash flow. Businesses require these details to make the right decisions continuously. However, they must also report the financial information to banks, insurance companies or investors.

Without accounting software, you'll have trouble getting a loan, reporting to financial institutions and paying your employees. Moreover, your data will be spread across excel files or documents, making it troublesome to reconcile bank statements.

Small businesses must evolve swiftly, and managing the finances is the first step towards that objective. Accounting software allows you to manage client and vendor contacts, calculate tax returns and clock your employee's billable hours.

Accounting Software For Small Business, A Summary

Ideally, Small business owners should prefer accounting software that serves specific requirements. There are several high-end tools and subscriptions available in the market. However, most of them offer advanced features that hold no benefits for budding startups or solopreneurs.

Wave offers a free subscription to help small business owners become acquainted with its features. Moreover, it provides invoicing, accounting and banking connectivity. Wave is our suggested pick for accounting software that suits small businesses. Visit the website to get started.

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