Zoho Books Accounting Software Review

Why Zoho Books Is Best for Microbusinesses 

Not all accounting software programs are appropriate for new or small businesses. Some are too complicated, too powerful or too expensive. Other software simply isn’t designed for the needs of microbusinesses. Freelancers, consultants, sole proprietors and individuals who operate e-commerce or home-based businesses require specialized software that meets their needs without breaking the bank or overwhelming them.

While price is always a consideration, it’s especially important for microbusinesses who might not have a lot of revenue or those just starting off. To find the perfect solution, we looked for software that is both inexpensive and highly capable. We wanted to find a scalable application that very small businesses can continue to use as they grow, with options to upgrade to higher plans and integrate with other business applications. 

We also wanted the program to have a mobile app that helps busy entrepreneurs keep up with their accounting tasks on the go. After much research and analysis of accounting software, we recommend Zoho Books as the best accounting software for microbusinesses.

The Zoho Books dashboard offers clear visualizations that are easy to understand and provide an overview of your business’s financial situation. These visualizations are also available on the mobile app. Photo credit: Zoho Books

Usability

Zoho Books has many features that benefit microbusinesses, including accounting for business, automated revenue recognition, invoicing, online payments and tools for time tracking, like project-based timesheets. Zoho Books also has a mobile app that supports more devices than most accounting software vendors do, including the Apple Watch.

Zoho Books saves you time by automating your workflow. You can set up this accounting software to automatically perform tasks like sending recurring invoices and payment reminders and tracking expenses. We also like that Zoho Books can set up bank rules to automatically categorize transactions when they’re imported each day from your bank feed. The software also identifies possible matches when you’re reconciling your accounts. 

A particularly useful feature we found with Zoho Books is that you can convert sales orders or estimates to invoices with a couple of clicks, edit the invoice as needed and drag and drop columns to rearrange them. You can send them immediately or schedule them to be sent at a later time.

The software also keeps an audit trail, so you can see which transactions are linked, the user who created or changed them and the date and time of the change.

Zoho Books Features

Workflow Automation

Microbusiness owners wear a lot of hats and have a lot of responsibilities, so saving time is essential. Zoho Books automates your workflow by eliminating otherwise time-consuming accounting tasks. With Zoho’s workflow automation, you’ll create and send invoices regularly, customize your workflow, send automatic payment reminders for overdue bills, automate reimbursement processes and employee onboarding. Account reconciliation is also a breeze because this program does it for you, saving you from poring over the books to look for inconsistencies.

Zoho Books even allows you to add dropshipping addresses on sales orders, set up custom notifications for API limits, and pin columns in the Module’s List Page, so you can easily compare values in multiple columns. The billpay add-ons feature also helps with streamlining vendor onboarding, approvals, and matching bills with purchase orders. Business owners can use their workflow to add item descriptions and unit prices, create Manual Journal workflow rules and use field comparison. For the safety of your data, Zoho Books lets you implement multi-factor authentication for customer and vendor portals.

Invoicing

One of the best reasons to invest in Zoho Books is the extraordinarily simple way of converting sales orders and estimates into invoices. All it takes is a couple of clicks, and then you can drag and drop as needed to create your invoices. You can upload files from the cloud (including Zoho Workdrive, Google Drive, Dropbox and One Drive) while being able to upload from your documents module.

The software even saves the information for you, so the next time you need to create the same type of invoice, it will be even easier. Or if you need to pause midway through creating an invoice, you can save it as a draft for later. We found the invoicing functionality comparable to the tools in our FreshBooks review, which says a lot since FreshBooks is our best pick for invoicing. Zoho lets you create anywhere from 500 to 10,000 invoices depending on the plan you select.

User-Friendly Dashboard

One of the most important things to look for in accounting software is an easily digestible and navigable dashboard. Zoho Books’ dashboard is comparatively sparse but still informative. You will see important details, like income and expenses, receivables and payables, cash flow, unbilled expenses and hours, projects and bank balances.

This design is clean and lacks the overwhelming feeling of some of the more comprehensive accounting software. For microbusinesses, the data must be easy to contextualize and understand quickly, as most microbusiness owners don’t have a team at their disposal to focus on financial information all day. Zoho Books delivers the information you need to know in an organized package of a few helpful visualizations.

Online Payments

You want to get paid securely and without any unnecessary delays, especially as a microbusiness that survives on cash flow. In Zoho Books, online payments are simple. You’ll first integrate with a payment gateway by clicking Gear in the top right of the screen, choose Integrations and select Online Payments. You’ll then be able to associate it with an invoice. The complete list of payment gateways is Stripe, PayPal, Authorize.Net, Payflow Pro, Payments Pro, Braintree, Verifone, Zoho Payments, CSG Forte, Square Credit Card Processor and ACH Payments.

Customer Portal

Customer service is a huge selling point for microbusinesses, and Zoho Books offers a tool that helps create an exceptional customer experience. The customer portal is the designated space for your clients to view and manage their transactions, view project details, leave reviews for your business, interact in real-time and more. It offers a self-service space that connects your client with your team, without drawing on your precious time and resources for simple inquiries. The portal automatically sends a statement of accounts to clients so there’s no longer a wait time.

Mobile Application

Just about every accounting software offers a mobile app so you can do all of your business on the go. With the Zoho Books app, you can set up online customer payments, track your payables, gain instant insights, obtain financial reports and send invoices. You can also add widgets to your home screen with the latest iOS update. The mobile application is available for iOS and Android mobile devices at no extra cost if you have a Zoho Books account.

You can also use the Zoho Books app on Apple Watch and use it with Siri for iOS. For the Android version, users can access it on their Smartwatch and add a passcode so their data is protected.

Zoho Books Cost

Zoho Books offers five paid plans and one free version for businesses that bring in less than $50,000 per year. Photo credit: Zoho Books

Like many accounting software platforms, Zoho Books offers a number of pricing plans. However, it’s one of the few offering a free version rather than just a free trial. Businesses with revenue under $50,000 can use Zoho at no cost. For a business owner just starting out, this can be a huge perk. 

• Standard: This plan costs $15 per month when you sign up for a year or $20 monthly and supports three users. You can manage up to 5,000 invoices, reconcile transactions, create invoices and track mileage and expenses.
• Professional: This plan costs $40 per month for an annual plan or $50 monthly and supports five users. You get everything in the Standard plan, plus the ability to make sales orders; manage purchase orders, projects and timesheets; and handle multiple currencies.
• Premium: This plan costs $60 per month when billed annually or $70 monthly and supports 10 users. You get everything in the two other plans, as well as a vendor portal, cash flow forecasting reports, a custom domain, budgeting tools, and integration with Zoho Sign and Twilio.
• Elite: This plan costs $120 per month for a yearly subscription or $150 a month and supports 10 users. It includes everything in the Premium plan, plan plus advanced inventory control and email, voice and chat support.
• Ultimate: This plan costs $240 per month when signing up for an annual plan or $275 monthly and supports 15 users. You’ll receive 25 custom modules, everything in the Elite plan and advanced analytics. You can view real-time reports and dashboards, track key financial metrics, embed reports in websites and more.

You can add extra users to any of the plans for $2.50 per additional user per month. Advanced autoscans cost $8 per month for 50 scans per month. This add-on feature scans the documents you upload, such as receipts or invoices, and uses the data to create new transactions. Other software includes this feature for free, such as the one we examined in our Xero review. Zoho also offers additional locations for $10 a month per location and extra expense claims at $7 per active user per month. You’ll even have the option to add billpay for an additional $59 a month.

Zoho Books Setup

New users can click on the sign-up now button to create an account. The setup page will select the time zone based on your location chosen during sign-up after you add your company information. Once you complete this preliminary setup, Zoho Books gives you clear guidance on how to enter your business’s other important details. You can also learn how to make your first invoice, bill and expense and set up your journals and banking.

A major plus of Zoho Books is how easy it is to use, with a dashboard that is clear and simple to navigate. You get at-a-glance views of your business’s financial management performance through widgets for accounts receivables and accounts payables with current and overdue amounts, top expenses, projects with unbilled hours and expenses, bank and credit card accounts and a cash flow chart. An easy-to-follow welcome video will take you through the steps to sign up and get started.

To try Zoho Books yourself, consider signing up for a free 14-day trial. You can also learn more about this accounting software by watching the company’s webinars and video tutorials. As usual, we recommend using the free trial to better understand how the platform works and how it can benefit your business.

>> Learn more: Finding the Right Accountant for Your Small Business

Zoho Books Customer Service

Zoho Books offers email, live chat and phone support five days a week. Support is available from 9 a.m. to 9 p.m. ET, Monday through Friday. You can also find help online in Zoho Books’ searchable knowledge base and customer forums. Zoho Books offers weekly webinars, where you can learn about the ins and outs of the application. They also regularly publish blogs so you’re updated on every feature.

In addition, Zoho Books maintains a help documentation center. Zoho offers a data migration guide, essential business guides, welcome guide, forums and videos that can help new users get up to speed with the system. These self-guided materials are valuable sources of information that can help you resolve most basic questions without contacting the customer support team. We found the information on setting up custom invoices, branding and logos, user roles and permissions and online payments especially useful in getting started on the right foot.

Zoho Books Drawbacks

The main drawback of Zoho Books is that while it provides ease of use and delivers the basic needs of new businesses, the functionality can be limited as businesses grow and their need for more features increases. For example, all Zoho Books plans set a maximum number of invoices you can issue per year. 

Zoho Books does offer a free income tax calculator for old and new taxes. However, if you want more than a calculator, you’ll need to give an accountant regular access to your books to ensure you file and pay on time while being compliant. Additionally, customers in many territories don’t get access to Zoho Books’ audit logs, a feature that’s universal with competitors such as QuickBooks Online. Only those in the UK, UAE, KSA, Bahrain, India and EU Countries have access to Zoho Books’ audit logs.

For businesses that outgrow Zoho Books, consider our QuickBooks Online review. Large businesses that require truly advanced features should consider our Oracle NetSuite review for comprehensive and powerful software, though small businesses may find these tools overkill.

Methodology

When searching for the best accounting software services for microbusinesses, we searched for a cost-effective platform with all the core accounting tools bundled in a user-friendly, intuitive experience without a steep learning curve. After much research and analysis, we recommend Zoho Books as the best accounting software for microbusinesses. It maintains a useful slate of easy-to-use features and extends a free version to businesses that bring in less than $50,000 in revenue annually. Overall, we found Zoho Books to be a simple, effective accounting software that meets the needs of microbusinesses without demanding a lot of time and resources from business owners.

Overall Value

We recommend Zoho Books for …

• Small businesses on a budget.
• Users who need a simple platform. 
• Users who want to set up accounting software quickly and without a steep learning curve. 

We don’t recommend Zoho Books for …

• Businesses that have outgrown basic accounting software solutions.
• Businesses that would struggle with a cap on their monthly invoicing volume.
• Businesses that can’t afford an accountant to calculate and file their quarterly and annual business taxes.