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Zoho Books Review

Best Accounting Software for Really Small Businesses

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A Business News Daily Review

Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more.

Freelancers, entrepreneurs and extremely small businesses need accounting software just as much as larger firms. Finding the right accounting software for a microbusiness requires a focus on both price and usability. Zoho Books stood out in our search as an elite accounting solution for microbusinesses.

For this category, we looked for accounting software for very small businesses – or microbusinesses – such as freelancers, consultants, sole proprietors, and individuals operating e-commerce and home-based businesses. While price is always a consideration, we felt it was especially important for this use case, so we looked for software that was both inexpensive and highly capable. We wanted to find a scalable application that businesses can continue to use as they grow, with options for upgrading to higher plans and integrating with other business applications. We also wanted it to have a mobile app that helps busy business owners 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 really small businesses in 2019.

Really small businesses don't need complicated, pricey accounting software; they need affordable software that can grow with their operations. Zoho Books is a simple online accounting software application that syncs with your accounts and covers all the basics, allowing you to create and send invoices, track time and expenses, and generate reports.

Like many accounting software platforms, Zoho Books offers three pricing plans. If you choose to pay annually rather than monthly, you receive a discounted rate.

  • The Basic plan costs $9 per month or $90 per year. It supports one user (and an accountant) and allows you to add 50 contacts to the system. You can reconcile transactions, create invoices, track expenses, and manage projects and time sheets.
  • The Standard plan costs $19 per month or $190 per year. It supports two users (and an accountant) and allows you to add 500 contacts to the system. In addition to the Basic plan's features, you can use the software to track bills and vendor credits, add reporting tags to your transactions, and print checks.
  • The Professional plan costs $29 per month or $290 per year. It supports 10 users, up to 5,000 transactions and an unlimited number of contacts. In addition to the Standard plan's features, you can use the software to create sales and purchase orders and to manage inventory.
  • Additional users cost $2 per month or $20 per year. You can add extra users to your account no matter which plan you use.
  • Snail mail credits cost $2 each. If your customers prefer hard copies of your estimates or invoices and you don't want to print them out and mail them yourself, you can purchase snail mail credits and have Zoho send them for you. Mail sent to customers in the U.S. costs one credit and takes five business days to arrive. Mail sent to international customers costs two credits and takes 10-15 days to arrive.
  • Auto-scans cost $5 per month or $50 per year. This add-on feature scans the documents you upload – such as receipts or vendor invoices – and uses the data to create new transactions. It supports up to 50 scans per month.

Although other top accounting software providers offer similarly priced starter plans, you need to consider which software has the specific features your business needs in the lowest plan or at the best price. For example, consider the following three features to see how Zoho Books stacks up against other top accounting software:

  • Contacts: Zoho Books' $9 Basic plan allows you to add 50 contacts to the system. With FreshBooks' $15 Lite plan, you can only bill up to five active clients. Xero's $9 Early plan is even more restrictive, limiting you to five invoices and five bills per month, while QuickBooks Online's $10 Self-Employed plan doesn't have a limit on this feature.
  • Tracking billable hours: You can track time and add billable hours to invoices using Zoho Books' Basic plan. FreshBooks' Lite plan can do this also, though it costs $6 more per month. QuickBooks Online's Essential plan, which costs $35 per month, offers this functionality. Xero's Established plan has this feature, but it costs $60 per month.
  • Tracking inventory: Although you'll need Zoho Books' Professional plan to get its inventory management features, you'd need QuickBooks Online's Plus plan for this functionality, which costs $60 per month. Although Xero's Early plan has this feature and at $9 would be the best deal, you're limited to five invoices per month, so you'd probably need to upgrade to Xero's $30 Growing plan. FreshBooks doesn't support inventory at all.

Overall, Zoho Books offers a competitive pricing plan that should meet the expectations of most freelancers or very small businesses. While some freelancers might opt for free accounting software, Zoho Books is well worth the monthly cost.

Based on our research, many users find that Zoho Books is easy-to-use accounting software, even for the most accounting- and tech-challenged small business owners. To see for ourselves, we signed up for a business account.

Setting up an account is easy. You simply enter your business name, contact information and password, and you're good to go. Next, you select the modules you want and can opt to fill out tax information and connect your payment processing account.

Zoho Books' dashboard has absolutely no clutter, and we easily found our way around the system using the sidebar menu, which is separated by task in a logical way. This menu collapses into icons when not in use, giving you more screen real estate. It offers at-a-glance views of your business's financial performance, with widgets for receivables and payables with current and overdue amounts, top expenses, projects with billable hours and expenses, bank and credit card accounts, and a cash flow chart.

To try Zoho Books yourself, consider signing up for a free 14-day trial – no credit card is required. You can also learn more about this accounting software by watching the company's webinars and tutorial videos. As usual, we recommend using a free trial to better understand how the platform works and how it can benefit your business.

Zoho Books offers one of the user-friendliest interfaces on the market, so you likely won't need the full 14 days to get a feel for the system. Two weeks is more than enough time to play with the software to see what you do and don't like about it.

Accounting can be one of the most time-consuming aspects of running a business. It was no surprise, then, that the small business owners we spoke with said the most important thing they look for in accounting software is features that save them time. Zoho Books' automation and online payment features meet this requirement.

  • Automations: Zoho Books saves you time by automating your workflow. You can set up the software to automatically perform tasks like sending recurring invoices and payment reminders, tracking expenses, and notifying you when your bills are due. You can set up bank rules to automatically categorize transactions when they're imported each day from your bank feed, and the software identifies possible matches when you're reconciling your accounts.
  • Invoicing: You can convert sales orders or estimates to invoices with a couple of clicks, edit the invoice as needed, and drag and drop lines to rearrange them. You can send them immediately or schedule them to send at a later time. The software keeps an audit trail, so you can see which transactions are linked, the username of who created or changed them, and the date and time of the change.
  • Online payments: You can connect your account to popular payment gateways like Authorize.Net, Braintree, PayPal, Square, Stripe, WePay, Worldpay and 2Checkout, allowing your customers to instantly pay their invoices online. This is an efficient way for you to receive funds and keep track of paid and unpaid invoices. Plus, it provides your customers with a convenient, hassle-free way to pay for products and services.
  • Mobile app: Like many accounting programs, Zoho Books has a mobile app, so you can do your accounting on the go. What makes Zoho Books' app different is that it's available on more devices than most, running on the iPhone, iPad, iMessage, Apple Watch, Android phones, tablets and smartwatches, and Windows Phones. You can manage invoices and estimates, track payments and expenses, upload receipts, run reports, and view your dashboard for at-a-glance insights. It supports multiple users, and you can control the data they're able to access.
  • Time-tracking and project management tools: These features are included with all Zoho Books plans and allow you to create tasks and track billable hours. You can bill based on project hours, task hours or staff hours or at a fixed cost. You can also budget hours per project, task or staff member.
  • Keyboard shortcuts: You can choose to type a quick shortcut to a function rather than use the menu.

Zoho Books offers email, live chat and 24-hour phone support five days a week in the U.S., the U.K., Australia, India and several other countries. You can also find help online using Zoho Books' searchable knowledgebase and customer forums.

When you call Zoho, you're greeted with menu options to reach different parts of the company – sales, tech support, billing and payment, or corporate – so you know you're actually contacting representatives in the right department.

The sales rep we chatted with was friendly and eager to answer all of our questions about the software. There was no pressure to sign up for the service, and the rep mentioned the 14-day trial if we wanted to give Zoho Books a test run before purchasing a paid plan. It's always a benefit when a customer support specialist isn't overly salesy. Zoho Books' reps made it seem like they genuinely cared about helping users find the best accounting software for their current situation.

Zoho Books has a client portal that your customers can use to accept, decline and discuss estimates; view and pay invoices; and download account statements. If your work is project-based, you can share project details such as tasks and logged hours. This is a particularly helpful feature for businesses that work closely with their clients on projects. If you want feedback from your customers, you can set up the portal to allow them to review your services.

Invoice customization is easy. Sixteen templates are available, and each allows you to choose from multiple fonts and select any color for several elements. You can add a logo and background image, select which fields are included, and edit field text. The templates allow you to choose a different display language, which is useful if you have international customers. Templates are also available for documents such as estimates, credit notes and payment receipts. The different templates are a plus, as customization tends to be a benefit for businesses. It's always good for branding purposes to design your solutions to look the way you like.

Zoho has its own suite of business apps that you can connect to this accounting software, though some cost extra. It has customer relationship management (CRM) software, email marketing and social media marketing solutions, spreadsheet editors, and other productivity tools.

Like its competitors, Zoho Books integrates with third-party productivity apps and business solutions, including Google Apps, the Square point-of-sale (POS) system, several credit card processors, and tax services Tax1099 and Avalara. It also has a Zapier integration, which allows you to connect to more than 1,000 third-party apps.

Integrations can save your business time, so it's nice that Zoho Books offers these options. If your business uses a POS system or a credit card processor, it's a good idea to see if those are compatible with Zoho Books. You'd rather go through a few integrations than try to figure out how to get each piece of software to function effectively by itself.

Although Zoho Books is packed with features, it doesn't include payroll services. This may not be a big deal for really small businesses, but it may become an important consideration if your business is growing and you plan to hire employees. Currently, the only payroll task you can perform on Zoho Books is preparing and printing 1099s for independent contractors using the tax services mentioned above. Again, not all small businesses will care about that limitation, but larger businesses might want a solution that includes more than just the standard accounting services.

Additional reporting by Bennett Conlin.

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Lori Fairbanks

Lori Fairbanks has years of experience writing and editing for both print and online publications. After graduating from Brigham Young University with a Bachelor of Arts in English, she worked as a magazine editor and then as a freelance writer and editor for a variety of companies, including marketing firms and a medical university. She now writes for business.com and Business News Daily about financial systems and services for small businesses, such as accounting software, credit card processing and point-of-sale systems.