This example of an accounting software dashboard comes from our test of QuickBooks Online, one of our best picks.
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The best accounting software makes managing your books easy, with precision accuracy and efficient automation.
Managing your business finances with spreadsheets might work when you first start out, but it can soon become challenging and lead to errors. That’s where accounting software comes in. We’ve reviewed and tested leading solutions on the market and chose the best accounting software for your business. The platforms on this list can help you streamline the process of tracking your expenses and revenue, reduce manual errors and understand the financial health of your business at a glance. These tools are indispensable to helping a small business grow, and with our firsthand insights and guidance below, you’ll be able to easily select the best accounting software for your needs and your budget.
At Business News Daily, we’ve spent years researching and testing the financial tools and services entrepreneurs need to manage their money and grow their businesses. Our team of small business finance specialists conducts independent evaluations of leading financial service providers to determine which provide the most value. We also regularly consult with finance experts, including accountants, bookkeepers, payroll managers, payment experts and tax professionals, to stay on top of the latest finance trends impacting small businesses. And every review we publish is evaluated by our editorial staff to ensure objectivity, accuracy and fairness are at the core of our decision-making. Learn more about our editorial guidelines.
To choose the best accounting software platforms, our small business finance experts spent dozens of hours researching and testing some of the most popular solutions on the market. We started by examining subscription prices, plans and fees to determine which platforms offered the most value per dollar. Then, we scheduled live demonstrations and accessed free trials to test some of the most important...
To choose the best accounting software platforms, our small business finance experts spent dozens of hours researching and testing some of the most popular solutions on the market. We started by examining subscription prices, plans and fees to determine which platforms offered the most value per dollar. Then, we scheduled live demonstrations and accessed free trials to test some of the most important features, like invoicing tools, accounts payable and receivable management, payment reminders, support for contractors and financial reporting. We also looked for platforms that were customizable, enabling users to adjust dashboards to present the most important information at a glance and tailor systems to their existing workflows. Finally, we considered customer reviews and how users’ real-life experiences lined up with our research.
considered
reviewed
selected
To choose the best accounting software platforms, our small business finance experts spent dozens of hours researching and testing some of the most popular solutions on the market. We started by examining subscription prices, plans and fees to determine which platforms offered the most value per dollar. Then, we scheduled live demonstrations and accessed free trials to test some of the most important features, like invoicing tools, accounts payable and receivable management, payment reminders, support for contractors and financial reporting. We also looked for platforms that were customizable, enabling users to adjust dashboards to present the most important information at a glance and tailor systems to their existing workflows. Finally, we considered customer reviews and how users’ real-life experiences lined up with our research.
considered
reviewed
selected
This example of an accounting software dashboard comes from our test of QuickBooks Online, one of our best picks.
Our Top Picks for 2024 | QuickBooks Online | Xero | FreshBooks Accounting | Zoho Books Accounting | Wave Financial | Plooto |
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Rating | 9.5/10 | 9.0/10 | 9.0/10 | 8.5/10 | 8.5/10 | 9.0/10 |
Use case | Small businesses | Payments | Invoicing | Microbusinesses | Free option | Accounts payable automation |
Starting price | $30 per month | $15 per month | $19 per month | $15/per month | Free | $32 per month |
Free trial period | 30 days | 30 days | 30 days | 14 days | N/A | 30 days |
Mobile applications | Yes | Yes | Yes | Yes | Yes | No |
Integration options | Yes | Yes | Yes | Yes | Limited | Limited |
Bill pay tools | Yes | Yes | Yes | Yes | No | Yes |
Review Link |
Our favorite QuickBooks Online features that we tested are its customizable dashboard, comprehensive reporting tools, and accountant and bookkeeper integrations.
QuickBooks Online also offers a 50 percent discount for the first three months of service when you forgo the 30-day free trial period and subscribe straightaway.
While testing QuickBooks Online, we were impressed by how many pre-built reports there are before you even create any custom reports. Many business owners will have everything they need in the reporting module already.
QuickBooks Online is suitable for small and growing businesses that want a scalable solution with expert support options.
Read our full QuickBooks Online review.
Our favorite features in our test of Xero included its tools for bill pay management, its customizable dashboard and its bookkeeping features.
Xero also offers frequent discounts. They are currently offering a 60 percent discount for four months of service.
We were impressed by Xero’s clean, intuitive and customizable dashboard during our test, as well as the helpful guided setup the software offers.
Xero accounting software is for small businesses that want to streamline supplier payments and those who like detailed data visualizations and at-a-glance reporting.
Read our full Xero review.
Our favorite features during our test of Freshbooks accounting software included its invoicing and project management tools, and the Gusto payroll integration.
FreshBooks offers coupon codes through certain partners, such as a 50 percent discount for four months of service that we found during our review.
In our trial of Freshbooks, we were impressed by the breadth of features available. We found the software highly effective for growing businesses that want a tool to scale alongside their company.
Freshbooks is ideal for business owners who want strong all-around accounting software that can scale with their business as it grows.
Read our full Freshbooks review.
Our favorite features that we tested during our review of Zoho Books included its support for 1099 contractors, overall usability and customization options.
During our test of Zoho Books, we were impressed by its additional tools like project management and time tracking. This is useful for microbusinesses who want one software with multiple functions.
Entrepreneurs who outsource a lot of labor to freelancers or who manage most administrative tasks on their own.
Read our full Zoho Books review.
When testing Wave, our favorite features included its invoice management features, payment reminders and payroll add-on.
In our test of Wave, we especially liked how easy it was to build custom invoice and estimate templates. The tool was intuitive and made it simple to create beautiful, branded documents.
Wave is best for new businesses or very small businesses that need basic accounting functionality at a low cost.
Read our full Wave review.
In our test of Plooto’s accounting software, we especially liked the automated invoice and billing tools. We also found the smart approval workflows, which streamlines the approval process for payments, to be especially valuable.
In our test drive of Plooto, it was easy to get started managing your accounts payable and receivable by connecting your accounting software and uploading business documents.
Plooto is for businesses that prioritize efficiency and want to reduce the amount of time spent manually conducting accounting tasks.
Read our full Plooto review.
There are typically two types of pricing models for accounting software: perpetual licensing or a recurring subscription. With a perpetual licensing model, you make a one-time payment for unlimited access to the software. With a subscription pricing model, you pay a monthly or annual fee.
For subscription pricing, expect to pay anywhere from $15 per month for a basic starter plan to $350 per month for a more advanced service plan. Other factors, like the included features and number of users, affect the monthly cost as well.
Regardless of the pricing model you select, watch out for hidden fees. These can include charges for customization options, installation or setup services, integrations, and maintenance or support services.
If your business is on a tight budget, consider free accounting software. Wave, for instance, provides many of the accounting and invoicing features you would find in paid programs. Zoho Books also offers a free plan for businesses with under $50,000 in annual revenue.
When you’re choosing accounting and billing software for your business, we strongly encourage you to take advantage of free trials to test the solutions and see which one offers the tools you need. Plus, spending time with the software beforehand will help you feel more confident in your decision.
Many aspects of accounting software make it a useful tool. If you’re a small business owner, it’s important to know which features to look for. Most online accounting software offers accounts receivable, accounts payable, banking and reporting features. Some programs include inventory management, project management, time tracking and payroll tools.
Here are some of the core features to look for in accounting software:
Bank feed | Accounting software connects with your bank so that your banking transactions appear in your online ledger as well. |
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Dashboard | The best accounting software platforms have organized, customizable dashboards with clear data visualization and organization features. |
Online invoicing | You can create and send invoices from within most accounting software, so there’s no need to print or mail anything. |
Recurring invoices | Often, accounting software includes automation features for sending recurring invoices each month. |
Automatic payment reminders | Many accounting software platforms regularly and automatically remind your customers to pay outstanding invoices. |
Bank reconciliation | All accounting software should match your bank transactions to invoices, bills, purchase orders and expenses. |
Financial reporting | You can use accounting software to generate basic forms, such as profit and loss statements and advanced business health reports. |
Mobile apps | Almost all accounting software platforms offer iOS and Android mobile apps, some of which include nearly all of the software’s features. |
Integrations | The best accounting software integrates with point-of-sale systems, payroll services, HR platforms, customer relationship management software and more. |
Tracking for billable hours | Many platforms include features for tracking your time spent per task or project, or they integrate with your third-party time-tracking platform. |
Inventory management | Some accounting software includes tools for tracking your inventory, creating purchase orders and keeping your warehouses stocked. |
Project-based billing | With this feature, you can bill your clients based on your time spent per project or task and your hourly rates. |
Support for multiple businesses | Some accounting software platforms let you use the same set of tools for more than one business. |
This feature connects the software to your business bank and credit card accounts to provide a daily update of your transactions. This saves time, as you will not have to upload transactions manually. It also gives you a daily, rather than monthly, overview of your accounts. A real-time bank-feed feature can assist with reconciliation, which allows you to make it a small daily task rather than a monthly ordeal.
When you log in to your account, you’ll be greeted by a dashboard that shows you an overview of your account activity and key metrics, such as cash flow, profit and loss, account balances, expenses, accounts payable and receivable, and sales. Some accounting programs allow you to rearrange the information.
If your business sends invoices, the ability to email them and accept online payments helps you get paid faster. Most accounting programs integrate with third-party payment processors; others require you to use their in-house processing services. It’s a plus for accounting software to serve as an invoice generator.
With this feature, you can schedule the system to automatically generate and send invoices for recurring charges, such as subscriptions. You can choose how frequently invoices are sent — daily, weekly, monthly or annually — and indicate whether there’s an end date to the billing.
The best accounting software offers easy ways to track your outstanding invoices and accounts receivable. This example comes from our test of Xero.
This feature helps you remind customers about upcoming and past-due payments. Some have sample email text that you can use or customize. You can then choose when you want the reminders to be sent. Some programs give you the option to send thank-you emails to customers after you receive their payments.
Smart reconciliation tools identify potential matches between your bank transactions and the invoices you’ve entered into the accounting software. This saves you the time it would otherwise take to sift through your bank account for this information. You can then approve or deny the suggested matches. The best applications suggest potential matches as you reconcile your accounts, and a few include a reconciliation tool in their mobile apps.
Every accounting program can generate financial reports. But some are more basic than others, and some require you to subscribe to a pricier plan for advanced reporting. If you need specific types of financial reports, make sure they’re included in the software application and plan you choose. Detailed reports can help you interpret your financial data to make informed business decisions.
Not all accounting and invoicing programs have mobile apps, but the best ones do. There is, however, quite a range in the capabilities of mobile apps. Some can only capture receipts for expense tracking, some allow you to create and send invoices, and others have almost every feature the web-based software does. It’s worth checking if the software you’re considering offers a mobile app and, if so, what features will help you manage your business while you’re away from the office.
The ability to connect your accounting software to other business programs you use saves you valuable time because you don’t have to manually transfer data from one system to another. Payroll, payment processing, the best point-of-sale (POS) systems and the best customer relationship management (CRM) software are just a few of the popular types of integrations that are available with accounting software. Integration with systems you already use also cuts down on training time for employees who will use the software.
Most accounting software comes with a third-party app marketplace for integrations. This example comes from our test of QuickBooks Online.
If you’re a consultant or your business bills clients by the hour, you need accounting software that allows you to track and bill your time or that integrates with the time-tracking program you already use. This is an important feature in the best accounting software for freelancers.
If you have a retail, e-commerce or distribution business, you need an application that helps with inventory tracking and purchase orders. You may need to subscribe to a top-tier plan to get this feature, unless you use ZarMoney. If you need more advanced inventory features, look for software that integrates with a dedicated inventory management system.
Firms, freelancers and consultants who work with clients on projects or jobs should look for accounting software that helps them track their projects’ tasks and budgets. The software should allow you to invoice customers for tracked time and bill them for project expenses.
Xero’s project-based billing tools are ideal for businesses that need to track materials and labor costs, ensuring each project stays on track and profitable.
Several programs we evaluated let you add more than one business to your account, though some companies charge extra for this convenience. Also, the types of accounting methods that are important to you will depend on the specific needs of your business. For example, if you run a small freelance business, project-based billing might be the most important feature. Or, if you plan to do some work on your mobile device, a full-featured mobile app might be at the top of your list.
Want more options to choose from? These accounting software options are viable alternatives to the best picks listed above and may deserve your consideration if none of our favorites seem to fit the bill for your business.
According to data from The Brainy Insights the global accounting software market is projected to reach $37.63 billion by 2032. This figure reflects a compound annual growth rate of 10.5 percent across the decade. The following trends are likely to be part of that growth, shaping accounting software as it evolves to meet growing businesses’ needs.
Increasingly complex automation of repetitive or tedious accounting tasks has set some accounting software platforms apart from the crowd — and business owners want more of it. Expect to see increasingly sophisticated approaches to automation that take more of the burden off business owners in the coming years, freeing them and their staff up for more pressing tasks.
“As an entrepreneur, it can be very time-consuming to navigate and balance all the various needs of your business,” said Ben Richmond, country manager of the U.S. at Xero. “By utilizing technology that helps to automate your most mundane to-do’s, small business owners can better streamline tasks, free up time to focus on other important aspects of running (and growing) a business and save on costs. This includes things like automatic data entry from bank statements and receipts, automatic categorization of expenses and automated generation of reports.”
AI is set to drive continued growth in the accounting software sector. This technology is powering automation tools that streamline key accounting processes, thus minimizing tedious work. It’s also behind live-chat tools that make it easier to provide customer service.
“The widespread integration of artificial intelligence presents significant opportunities in the small business accounting landscape,” Richmond said. “AI-driven tools help to streamline time-consuming manual processes by delivering timely and relevant insights. This enhancement enables small business owners and their advisors to have more time to devote to more strategic areas of the business.”
Many of the accounting software platforms we reviewed included a direct line to professional bookkeepers and accountants, giving business owners additional support when managing their books. This useful feature offers business owners access to professional guidance for no additional cost beyond their subscription price, helping them save money but still set their business up for success, especially at the earliest stages of their company.
“Partnerships between accounting platforms and accountants and bookkeepers will continue to remain an essential piece of the puzzle, as they enable more efficient workflows and collaboration,” Richmond said. “The personalized support from an accountant or bookkeeper allows small business owners more time to focus on their core business activities while ensuring their finances are in good hands with relevant strategic input. Especially with tax changes on the horizon, the need for personalized guidance will remain a crucial aspect of advisors’ work with their small business customers.”
Cloud computing revolutionized the accounting software space, offering users access to their data from any internet-connected device from any location. Although it may seem like all accounting software is now cloud-based by default, that doesn’t mean there is still room to grow; expect significant advancements in how accounting software integrates with other key business tools in the near future.
“I anticipate that cloud-based accounting will be used more broadly to offer real-time and accurate financial data. As a result, we’ll likely see even greater integration between accounting software and additional business tools as companies grow and develop their platforms, continuing to streamline operations and workflows,” Richmond said. “We’re also progressing from a phase where a wide ecosystem of top-tier tools emerged and integrated with one another within the cloud, to a new phase where tools are more deeply embedded within each other’s platforms.”
At Business News Daily, our team of small business finance experts have been researching and testing accounting software for years, comparing some of the leading solutions across more than 20 key metrics. We considered 88 accounting software platforms and closely reviewed and tested 31 of them before selecting our six best picks above.
Below are the factors we considered when determining our best picks. Each is weighted according to how much the criteria typically influences business owners’ buying decisions.
In addition to scoring each accounting software we reviewed based on this criteria, we also determined the best use case scenarios for each. No two businesses are exactly alike, so we put ourselves in the shoes of different types of small business owners and identify the best accounting software for a variety of needs.
To learn more about how we review and test financial products and services for small businesses, read about our editorial process here.
Accounting software offers features for tracking the revenue and expenses of a business. The best small business accounting software has a wide range of reports that allow you to analyze the financial health of your business. These platforms also have dashboards that provide an at-a-glance overview of key financial aspects, like accounts receivable, accounts payable, historical sales data and cash flow. Small business accounting software is also useful for tax management, as it ensures that you accurately estimate your tax liabilities and save money accordingly. The best accounting software integrates with other key business systems, like payroll software and HR software, thereby eliminating the need to enter the same data manually in multiple systems.
You need accounting software that tracks the money moving in and out of your business, with both accounts payable and accounts receivable features. Some software solutions don’t include both accounts payable and accounts receivable information. Also, accounting software should connect to your bank and credit card accounts and automatically download your transactions. If your business is service-based, you may need project management tools. If your business sells products, you may want an accounting solution that has inventory management features. Finally, look for software that offers greater advantages by connecting to other business applications you already use, such as your POS system, CRM system or the best email marketing software.
For small businesses, the term “online bookkeeping software” is usually interchangeable with “online accounting software.” (However, there is a difference between bookkeepers and accountants.) The best online accounting programs for small businesses have bookkeeping capabilities that allow you to record debit and credit transactions, as well as accounting features that let you run reports and analyze your business’s financial performance. Look for more than just a bookkeeping solution; accounting software should include more detail and let you generate invoices and detailed reports.
It depends on your business. If you generate (or expect to generate) a lot of invoices to send to clients, we recommend that you find a comprehensive accounting application with invoice-generating features. Freelancers should consider using accounting software that can generate invoices.
Online accounting services can perform a wide range of tasks for busy business owners. Some focus on bookkeeping duties, such as entering and categorizing transactions, reconciling accounts, and generating financial statements and reports that you can take to your certified public accountant (CPA) at tax time. Others provide payroll and tax preparation services. Some — such as virtual controllers, chief financial officers and CPAs — provide high-level accounting services, like internal audits and financial planning and analysis.
Small business owners should look for accounting software that is easy to install, simple to use, integrates easily with third-party apps, and provides a bevy of tools, including invoicing and inventory management. The best accounting software enables easy collaboration between you and your accountant.
Changing accounting software vendors is easier said than done. After all, you already uploaded all of your data to the platform and learned how to operate it. Nonetheless, there are reasons to consider a switch:
If you are considering switching accounting software, the best time to do so is at the end of your business’s fiscal year. The end of the quarter is the second-best option.
Accounting software is used to extract data from large tax documents, create new journal entries, track payments, send invoices, and eliminate manual data entry. These tasks are both time-consuming and prone to human error. Automation can provide enormous time savings for finance departments that total thousands of hours annually, which is another reason to consider implementing accounting software.
Changing accounting software vendors is easier said than done. After all, you already uploaded all of your data to the platform and learned how to operate it. Nonetheless, there are reasons to consider a switch:
If you are considering switching accounting software, the best time to do so is at the end of your business’s fiscal year. The end of the quarter is the second-best option.
Accounting software is used to extract data from large tax documents, create new journal entries, track payments, send invoices, and eliminate manual data entry. These tasks are both time-consuming and prone to human error. Automation can provide enormous time savings for finance departments that total thousands of hours annually, which is another reason to consider implementing accounting software.