You're a small business owner, not an accountant. You'd rather spend your time running your business than stressing out about manually updating ledgers, tracking expenses, creating reports and performing other time-consuming tasks to manage your company's finances.
This is where accounting software can help. If you use it correctly, and choose the right one for your business, accounting software can make your life easier by doing all the number crunching and inputting all the data, so you don't have to.
Best Accounting Software for:
|Small Business Overall||Really Small Businesses||Free||Mobile Devices|
|QuickBooks Online||Zoho Books||Wave Accounting||FreshBooks|
|Full Review >>||Full Review >>||Full Review >>||Full Review >>|
Choose from three plans, starting at $9.99 per month
Best pricing — $24 per month includes all features
Choose from four plans, starting at $9.95 per month
Save time with workflow automation and easy navigation
Clean layout with clutter-free dashboard
Full-featured accounting software
Simple and intuitive user interface
Used by accountants and integrates with more than 150 business apps
Connects with popular online payment gateways so you can get paid faster
For microbusinesses with less than 10 employees
Features a comprehensive set of tools for on-the-go accounting
Do you need an accounting software?
Investing in an accounting software is one of the best decisions a small business owner can make. But is using one right for your business? For some businesses, using spreadsheets and even hand-written ledgers will do. For most, however, the ease and efficiency of an accounting software makes it the better choice.
If any of the following apply to your business, investing in an accounting software is the way to go:
- You're just starting out. Using accounting software right from the start sets your business up for success down the line. It's far more beneficial to begin using an accounting software from the first day than to implement one after months or even years of using spreadsheets or hand-written ledgers.
- Your business is growing. If you plan on expanding or if your business is quickly growing, a manual accounting system becomes inefficient and complicated. Using an accounting software can save your growing business tons of time and money by automating processes and being highly scalable to your business' size.
- You want immediate, on-demand access. Think accounting software is just about the numbers? On the contrary, this software gives you an easily accessible database of both financial and customer information right at your fingertips. You can even include all types of details about clients and vendors, such as contact information, purchase histories and credit terms.
- You want to streamline your operations. From payroll to day-to-day transactions, accounting software can integrate all parts of your operations and automatically input data from other systems, such as your ERP, POS, CRM and other third-party solutions. Accounting software can also link your bank accounts and credit cards to automatically track expenses and update your books.
- Your current system is too complicated. Not all accounting systems are made the same. For small businesses, some of the mainstream accounting systems are too complex and packed with features you don't even need. If the software you currently have is too much, solutions made specifically for small businesses are a much better option.
- You want to make sure you comply with all laws and regulations. Don't know anything about generally accepted accounting principles (GAAP), tax laws or other financial regulations? Many accounting software programs do the legwork for you and can guide you to ensure compliance. You can't get that with spreadsheets or by doing everything by hand.
If you don't want to be your own accountant, but need an efficient system to manage your business's finances, an accounting software is for you.
Accounting software features
This kind of software offers a bevy of technical functions and capabilities to help you manage your finances. However, many of the business owners we spoke to said ease-of-use and time-savings are two of the top features they look for in an accounting software.
"For me, perfect accounting software is easy to use. I'm happy with anything that makes my life easier and saves me time," said Christopher Pabon, founder of Simple Tree, LLC, an app development company.
Accounting software should also be able to cater your business's needs to help you see the big picture. Michelle Devereux, owner of Back Office Support Services (BOSS), an Enterprise Resource Planning (ERP) company that helps businesses manage their finances, said tailoring solutions to a client's unique needs helps the client better understand its business and plan for the future.
Here are just some of the features accounting software have to offer to help you save time and better manage your finances:
- Basic accounting tasks. Most small businesses can make do with accounting software that offers basic functions like invoicing (both by email and snail mail), tracking income and expenses, generating financial reports, and client and vendor management.
- Automation. Things like automatic billing, recurring payments, past-due notifications and other automated processes save you time since you will not have to manually do them yourself.
- Quote and estimate creation.Use customized, pre-made templates to create quotes and estimates for clients, then automatically convert them to invoices.
- Tax preparation. Make both your life and your accountant's life easier with an accounting software that can help you with your taxes. Features include automatic tax calculations, multiple tax rates and tax reporting, as well as the ability to instantly email all necessary data and files to your accountant at the click of a button.
- Multiple user access. From your staff to your accountant, most accounting software gives multiple users access, so you don't have to do everything on your own.
- Payroll processing. Enter time sheets, calculate pay, print checks and pay your employees — without all the legwork.
- Mobile access. Use your accounting software anytime, anywhere on your mobile phone or tablet. This is particularly useful for business owners who are always on the go and too busy to sit down at a computer and manage the books.
- Third-party integration. Accounting software can make running your business easier by integrating and automatically inputting data in real-time from apps and tools you use the most. This includes POS systems, inventory, e-commerce, ERP, credit card processing, CRM and Google Apps.
Editor’s Note: Looking for a accounting of bookkeeping service for your business? If you’re looking for information to help you choose the one that’s right for you, use the questionnaire below to have our sister site, BuyerZone, provide you with information from a variety of vendors for free:
How much does it cost?
Accounting software products vary in cost, depending on the features you choose. Most providers also use subscription models for different types of packages, and some offer free versions with basic functionalities or limits on the number of users and clients.
Paid packages range anywhere from less than $10 per month to roughly $40 per month. Features that add to costs include expense tracking, sales tracking, recurring invoices, automatic past-due billing, team functionalities, payroll services, advanced reporting capabilities and company branding.
Benefits of using accounting software
In addition to helping you manage finances, accounting software also offers many benefits that make running a business a bit easier.
Here's what some business owners said they love most about their accounting software:
- All-in-one solution. Peter Geisheker, CEO of The Geisheker Group Marketing Firm, said his favorite accounting software is an all-in-one solution that provides everything a small business needs: affordability, ease of use, credit card processing and more. It also lets his accountant monitor transactions.
- Simple interface. Patrick Cullen, founder and CEO of Panda Bear Linens, said a simple look and feel and the ease of use of his accounting software takes away the frustrations and complexities of bookkeeping.
- Less stress. Ryan Ireland, founder of Mijingo, said that managing a business's finances is difficult enough as it is, so it's important to have an accounting software that alleviates that stress instead of adding to it.
- Tracking capabilities. In addition to tracking expenses, Darren Davis, CEO of LinkCaffeine.com, found that being able to track when a client has viewed email invoices takes the mystery out of whether or not the invoice has reached the customer. This is particularly useful when a bill is past due, he said.
- Accountant access. Ian Lamont, founder of i30 Media Corporation, chose his accounting software because it's the one most accountants use and recommend, making managing finances easier for everyone.
- Do-it-yourself solution. Ian Aronovich, president and co-founder of GovernmentAuctions.org, said his accounting software can do everything from track expenses to automate invoicing and billing, organize tax and banking information, and provide payroll services. As a result, he doesn't need to hire a full-time bookkeeper to manage the company's finances and pay his employees.
- Less clutter. Accounting software means you don't need to keep piles of paperwork everywhere. For example, Mike Wolfe, co-founder and CEO of WAM Enterprises, found that his accounting software's mobile app makes it easy to add receipts to expenses simply by taking a picture.
- At-a-glance dashboards. Carrie Enders, vice president of front office at RE Suspensions, said she loves her accounting software's dashboard, which provides a snapshot of how the business is doing every morning and lets her add customized modules to fit the business's needs.
- Real-time data. Accounting software updates data in real-time and thus eliminates the need to manually input financial information. Nicole Wolfgram, founder of NV Blues, loves the reconciliation feature on her accounting software, which keeps her constantly up to date on the company's finances.
Choosing the right accounting software
Ready to invest in an accounting software? Choosing the right one is key to your success. Small business owners we spoke to said some of the most important factors are ease of use, features available, cost and customer service.
To find the right accounting software for your business, here are some questions to ask potential vendors:
- Is your software built for small businesses?
- Is your software a good fit for my industry?
- Do you offer customized solutions to fit my business needs?
- How many employees and clients can your software accommodate?
- How can your software help me comply with GAAP, tax laws and financial regulations?
- How is my data backed up? Can access be restored immediately during an outage?
- What security measures do you have in place to keep both my business's and my customers' data secure?
- What is the total cost? Are there any setup or cloud storage fees?
- What types of tech support and customer service do you provide? (For instance, does the provider offer your preferred form of contact, such as phone or live chat?)
For a summary of our best accounting software picks and an explanation of how we chose them check out our best picks page here.