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Running a small business can be an exhilarating adventure filled with triumphs, challenges, and... countless cups of coffee.
As an ambitious entrepreneur, you're always on the lookout for ways to optimize your operations and propel your business toward success.
And when it comes to managing your finances, having the right accounting software by your side can make all the difference.
Gone are the days of manual bookkeeping and stacks of paperwork. Today, small businesses have access to a plethora of accounting software options designed to simplify their financial processes. These software solutions not only save valuable time but also ensure accuracy, enhance productivity, and provide insightful data analysis.
In this article, we'll take a closer look at some of the best accounting software for small business owners.
Before we dive in, it's important to note that the following list is not ranked in any particular order. Instead, it comprises a selection of awesome accounting software companies that local and small business owners can benefit from.
At the end of the day, each software on this list offers unique accounting features and benefits, and it's up to you to choose the perfect accounting services for your specific needs.
10 Features to look for in small business accounting software
Should small businesses look for certain accounting software attributes? Absolutely!
Let's explore some of the key features to be mindful of when choosing accounting software for small businesses:
1. Easy to set up and use
As a small business owner, you don't have time for complex setups and steep learning curves. Look for an accounting software that offers a user-friendly interface and a quick and intuitive setup process.
The software should provide clear instructions and guidance, making it easy for you to get up and running in no time.
2. Seamless integration with third-party apps
Just like superheroes have their trusted sidekicks, your small business accounting software should seamlessly integrate with other essential applications. Consider the tools and software your business already relies on, such as payment gateways, payroll systems, or customer relationship management (CRM) platforms.
The accounting software should have the ability to connect and share data with these systems, eliminating the need for manual data entry and ensuring a smooth flow of information across your business ecosystem.
3. Scalability and flexibility
Look for a solution that can scale along with your business, accommodating increased transaction volumes, additional users, and evolving needs. It should be flexible enough to adapt to changing circumstances and new requirements.
The last thing you want is to outgrow your accounting software just as your business starts to soar.
4. Comprehensive financial management features
A good small business accounting software should offer a wide range of essential features to support your financial management needs. These features may include invoicing, expense and sales tax tracking, bank reconciliation, financial reporting, and inventory management, among others.
Assess your business's specific requirements and ensure that the software provides the necessary tools to handle your day-to-day financial tasks efficiently.
5. Data security and backup
Protecting your financial data is of paramount importance. Your accounting software should have robust security measures in place to safeguard sensitive information.
Look for features such as data encryption, secure access controls, and regular data backups. Ensure that the software complies with industry-standard security protocols to minimize the risk of data breaches or unauthorized access.
6. Reporting and analysis capabilities
One of the key advantages of small business accounting software is the ability to generate insightful reports and perform data analysis. Look for software that provides customizable reports, allowing you to track key financial metrics and performance indicators.
The software should also offer features for financial analysis, such as trend analysis, time tracking, budgeting, and forecasting.
7. Mobile accessibility
In a world where business moves at the speed of light, having access to your financial information on the go is crucial. Pick an accounting software that offers mobile apps or responsive web interfaces, allowing you to manage your finances anytime, anywhere, from your smartphone or tablet.
This mobility ensures that you stay connected to your financial data, even when you're away from the office.
8. Excellent customer support
When evaluating small business accounting software options, consider the level of customer support provided by the software provider.
Look for responsive and knowledgeable support teams that can assist you with any technical issues, provide training or guidance, and address any questions or concerns that may arise during your usage of the software.
9. Affordability
Cost is a critical factor in accounting software for small business and businesses. While considering different accounting software options, assess the pricing models and subscription plans offered.
Keep in mind that the cheapest option may not always be the most suitable for your needs, so evaluate the overall value and the features provided in relation to the price.
10. User reviews and reputation
Don't underestimate the power of word-of-mouth. Before making a final decision, read user reviews and testimonials to gain insights into the experiences of other small business owners who have used the accounting software you're considering.
Look for reviews that highlight the software's strengths and weaknesses, and consider the overall reputation and track record of the software provider.
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5 Benefits of small business accounting software
Accounting software for small business offers numerous benefits for small businesses. These range from saving time and effort to improving accuracy.
Let’s take a closer look at some of these advantages:
1. Save time
Accounting software significantly reduce the time and effort required to perform manual accounting tasks. They automate processes such as data entry, calculations, financial reporting, and bank reconciliations, allowing small business owners to focus on other core business activities.
By eliminating tedious manual work, accounting software help save valuable time and increases overall productivity.
2. Reduce errors
Manual accounting is prone to errors, which can have serious consequences for a small business. Accounting software minimize human errors by automating calculations and ensuring accurate financial records
They eliminate the risks of miscalculations, transposition errors, and misplaced decimal points, providing businesses with reliable and error-free financial data.
3. Improve financial visibility and decision-making
Accounting software provides real-time financial visibility by generating detailed financial reports, such as income statements, balance sheets, and cash flow statements. These reports offer insights into the business's financial health, enabling small business owners to make informed decisions based on accurate and up-to-date information.
With a clear understanding of their financial position, businesses can identify areas for improvement, optimize cash flow, and plan for future growth.
4. Streamline invoicing and billing
Small business accounting software simplify the process of creating and managing invoices and billing. They allow businesses to generate professional-looking invoices, track payment statuses, and send automated payment reminders to customers.
By streamlining invoicing and billing processes, businesses can improve cash flow, reduce payment delays, and maintain better customer relationships.
5. Stay compliant with taxes
Small businesses are subject to various tax regulations and reporting requirements. Accounting software help ensure compliance by automating tax calculations, tracking tax liabilities, and generating accurate tax reports.
Additionally, accounting software often integrate with tax preparation software, making tax filing seamless and efficient.
Discover the best accounting software for small business owners
In this section, we'll explore the top online bookkeeping services in detail, highlighting their unique features, advantages, and pricing options.
While some of these companies provide a range of products beyond small business accounting software, our focus here is on their exceptional accounting solutions.
1. QuickBooks
In the world of accounting software, Intuit QuickBooks stands tall as a leading solution for small businesses. With its powerful features and user-friendly interface, QuickBooks has become a go-to choice for small businesses seeking to streamline their financial management processes.
One notable advantage of QuickBooks is its flexibility and scalability. As your business grows, you can easily upgrade your plan, ensuring that you always have access to the tools and reports necessary for accurate accounting.
Even the basic plan comes packed with features that are often only found in higher-tier plans of other software solutions, making QuickBooks an attractive choice for small businesses looking to maximize value.
Key features
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1099 contractor payment tracking: Easily manage payments to contractors and vendors for tax reporting purposes.
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Powerful mobile app: Access your financial data and manage your finances on the go with QuickBooks' handy mobile app.
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Quick customer support: QuickBooks offers customer support with every plan and provides an extensive library of resources for learning and troubleshooting.
Free trial
30-day free trial.
Cost
Plans starting at $15/month.
2. FreshBooks
With its easy-to-use features and comprehensive functionality, FreshBooks simplifies your financial management processes. Whether you're a freelancer, a self-employed professional, or a business with contractors or employees, FreshBooks has tailored solutions to meet your specific needs.
One of FreshBooks' standout features is its robust invoicing customization and automation. You can create professional invoices with ease and customize them to reflect your brand identity.
The software offers automation features to streamline your invoicing process, saving you time and effort. Additionally, FreshBooks provides affordable pricing options, including various discounts, making it an attractive choice for small businesses.
FreshBooks goes beyond invoicing and offers bookkeeping capabilities. It provides double-entry accounting tools and reports that give you insights into profitability, cash flow health, and spending details.
Key features
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Robust invoice customization: Create professional invoices with ease and customize them to reflect your brand identity.
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Integration with over 100 popular apps: Streamline work by connecting FreshBooks with other business applications.
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Client self-service portal: Allow clients to access and manage their own information, such as invoices and payment details.
Free trial
30-day free trial.
Cost
Plans starting at $8.5/month.
3. Xero
With its range of monthly plans and add-on payroll options, Xero offers a comprehensive accounting solution for small businesses. Xero's feature set is impressive, especially considering its low starting price. For just $13 a month, you gain access to features such as custom invoice creation, bank transaction reconciliation, receipt capture for easy record keeping, and inventory tracking.
Collaboration is a standout aspect of Xero, as all of its accounting and inventory software plans include unlimited users. You can delegate responsibilities like bank reconciliation or expense tracking to team members without additional charges, fostering time-saving collaboration within your business.
One of the notable strengths of Xero is its extensive educational resources for setup and use. The platform offers several classes to help users learn more about its features and maximize its potential.
However, it's important to note that Xero does not provide live customer support, limiting you to chat or email communication for problem resolution or assistance.
Key features
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Bank transaction reconciliation: Simplify bank transaction reconciliation by automatically matching imported transactions with existing invoices, making the process faster and more accurate.
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Unlimited users: Get unlimited users for all plans.
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Hubdoc included in all plan tiers: This provides seamless and automatic capture of receipts and bills.
Free trial
30-day free trial.
Cost
Plans starting at $13/month.
4. Bench
With Bench, you can say goodbye to the days of do-it-yourself bookkeeping and taxes. Bench takes care of your financial tasks, allowing you to focus on what truly matters - running your business.
At Bench, you can expect real humans to handle your bookkeeping with precision. Its team of small business experts imports your bank statements and prepares accurate financial statements every month.
If you have questions or need assistance, your dedicated Bench bookkeeper, supported by an in-house research team, is there to provide you with informed answers to complex financial matters.
One-on-one expert support is a hallmark of Bench. You have direct access to your bookkeeping team via desktop or mobile, ensuring that professional support is just a few swipes, taps, or clicks away. You can rely on the team’s knowledge and expertise to guide you through financial challenges and keep your business on track.
Key features
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Professional bookkeeping by real humans: Bench offers expert bookkeeping services handled by a team of small business experts.
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Powerful financial reporting: At-a-glance visual reports offer actionable insights to help you make informed decisions and grow your business.
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Proprietary software: Bench uses its own proprietary software, ensuring that you have everything you need within its user-friendly platform.
Free trial
30-day free trial.
Cost
Plans starting at $249/month (on an annual contract).
5. Wave
Wave offers a powerful accounting and invoicing solution that is free for small businesses with a tight budget. With Wave, you can sign up for both the invoicing and accounting plans without any cost, making it one of the most affordable options available.
For small business owners starting out, Wave's free plans may fulfill all your accounting and invoicing needs. The Invoicing plan allows for customized invoicing, automated past-due reminders, and the ability to accept payments directly. However, it's important to note that Wave charges per-transaction fees for payment processing.
By signing up for the free accounting plan, you gain access to unlimited income and expense tracking, comprehensive reporting, and unlimited bank and credit card connections.
As your business grows, you have the option to add Wave's paid payroll service or bookkeeping support.
Key features
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Unlimited income and expense tracking: With Wave's free Accounting plan, you get unlimited income and expense tracking capabilities.
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Self-service customer support: Wave offers self-service customer support through the Wave Help Center and chatbot for users of the free products.
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Comprehensive reporting: Wave provides comprehensive reporting tools that allow you to generate real-time business health reports.
Free trial
Not applicable.
Cost
Free.
6. Zoho Books
Zoho Books is an integrated accounting solution designed to simplify your financial management processes. With seamless integration capabilities with Zoho apps and other third-party solutions, Zoho Books connects the different software pieces of your business, allowing for efficient data sharing and collaboration.
One of the standout features of Zoho Books is its extensive list of features that provide more functionality than many other accounting solutions. From recurring billing and client retainers to self-service portals for your clients and invoice check-out links for easy payments, Zoho Books empowers you to streamline your invoicing and payment processes.
For small and medium-sized businesses (SMBs) using multiple software solutions, Zoho Books offers proven integration capabilities. It seamlessly connects with popular software such as Slack, Twilio, and Office 365, allowing you to manage your business operations effectively.
Customer support is readily available for all paid plans, offering email, voice, and chat support. Zoho Books ensures that you have the assistance you need whenever you require it.
Key features
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User-friendly interface: Zoho Books features a clean and simple dashboard, making navigation easy and intuitive.
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Robust security features: Zoho Books prioritizes data privacy by implementing IP restrictions, two-factor authentication, SSL encryption, and other measures to protect your sensitive information.
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Scalable Plans to accommodate business growth: With six plans, including a free option, Zoho Books allows you to choose the plan that suits your business needs.
Free trial
14-day free trial.
Cost
Free plan available. Paid plans start at $15/month.
7. Sage 50cloud Accounting
Sage 50cloud Accounting provides powerful accounting software features that allow you to work more efficiently and gain a clearer understanding of your business performance. As the #1 rated accounting software for small businesses, Sage business cloud accounting also helps you spend less time on administrative tasks and focus on what matters most.
Cash flow and invoicing are key aspects of managing your business finances. With Sage's cloud-based software, you can run what-if scenarios to analyze your financial standing, staying on top of your incoming and outgoing cash flow. This insight enables you to make informed decisions to optimize your financial performance.
Robust reporting capabilities allow you to make informed business decisions. Sage 50cloud Accounting allows you to deliver customizable one-click reports, providing insights into sales taxes, expenses, profits, and more. With unlimited reporting options, you can tailor the reports to suit your specific business needs.
Key features
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Cash flow and invoicing: Sage 50cloud Accounting allows you to gain greater clarity on your business's financial performance by staying on top of your incoming and outgoing cash flow.
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Diverse payment plans: This accounting software has a range of plans to suit different needs.
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Cloud-based accounting: This allows you to access your accounting data anywhere, anytime, and share it with your team seamlessly.
Free trial
30-day free trial.
Cost
Plans starting at $42.88/month.
Congratulations! You've now discovered the incredible benefits of accounting software for small businesses. By harnessing the power of technology, you can transform the way you manage your finances, saving time, gaining accuracy, and achieving financial clarity like never before.
So, what are you waiting for?
Take the leap and unlock the potential of your business with the right accounting software.
Whether you're a freelancer, a startup, or a growing company, there's a solution out there tailored just for you.
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