The Best Accounting Software For Small Businesses Of 2024

Choosing the appropriate accounting software for your small business can be as challenging as playing a game of chess. If you’re not ahead of the game or you make a wrong choice, you can jeopardize your business’ profitability. Luckily, our five-star research team at SelectHub has you covered with our top five picks for the best small business accounting software.

Before you review our choices for the best accounting software for small businesses, it will be helpful to know what this software is, why it matters for small businesses and some of the prominent features this software has.

What is Accounting Software?

Accounting software is a viable tool for all of your bookkeeping needs. From managing accounts payable and receivable and keeping electronic journal entries to sending invoices to customers and conducting bank reconciliations, accounting software manages everything in one centralized location while reducing paperwork, thus saving trees and filing cabinet space.

Compare Top Accounting Software Leaders

Considerations

An accounting system sounds great, but as a small business, how do you know where to start? If you’re doing bookkeeping for a small business, you know better than anyone that what works for a larger enterprise might not suit your needs. Just like everything else in business, buying this type of software for your small business comes with its own unique set of considerations and questions to ask yourself.

Am I an entrepreneur, freelancer or small business owner?

Knowing your type of role in the small business game has never been more crucial. If you’re a freelancer, you don’t want to invest in a solution that’s designed for a mom-and-pop-shop. Likewise, you don’t want to invest in software that’s intended to grow businesses into franchises if you’re just a freelancer. Setting your business goals is just as important as setting your software goals.

Am I willing to grow my business over the next five to 10 years?

If you’re an entrepreneur, are you willing to grow your business into a franchise and expand? Investing in a scalable program could be right up your alley.

How much am I willing to spend on this software?

It’s important to understand how much you want to invest in this type of program. Look for various payment plans instead of one-time payments to determine which plan is right for you with a suitable amount of features. If you enjoy the software and you’re making massive profits, you could talk to your vendor about switching plans for more modules to streamline your business.

Compare Top Accounting Software Leaders

Advantages

This type of software comes with a string of advantages. These perks include:

• Analytical Reports: Gain access to a variety of detailed accounting reports such as profit and loss, balance sheets, cash flow management sheets and more.
• Taxes: Arrange all of your financial information in one ideal location so you’re ready for tax time.
• Multi-Currencies: Work with multiple currencies and regulations in various regions if you’re working with clientele overseas.
• Streamlines Tasks: Initiate this software to handle menial tasks such as recurring invoices, billing, ciphering and more so you can focus your attention on the tasks needed for your business.

Recommended Features

Every software has its own unique characteristics and features. Keep in mind that just because a feature is popular, doesn’t mean that it will suit your business or accounting needs. Below is a list of some of our favorite accounting features that you might want to consider when shopping for your small business accounting software:

• Invoicing: This feature typically grants you various invoice templates to choose from and the option to personalize them with your logo and company information.
• Reporting: A good reporting tool should provide any type of report that you need, such as balance sheets, profit and loss reports, sales tax summary and more so you can keep your business running like a well-oiled machine.
• Mobile-Friendly: Software that’s accessible on any device is handy. For example, if you need to quickly check your finances while on the run, you can just pull out your phone and get a quick snapshot of your finances.
• Inventory Management: This module allows you to know the quantities of your stock and inventory with real-time alerts and reports, avoiding stock shortages.
• Sales Tax: This module allows you to charge or record sales tax on bills, transactions and invoices.

Now it’s time to make a wishlist of the top features and requirements you want in a small business accounting software. Unsure of what features you want or in need of more features to learn about? Our handy-dandy (and free!) requirements guide can help with that.

Compare Top Accounting Software Leaders

Best Small Business Accounting Software

It’s time to go over our picks of the best accounting software for small businesses. Have your wishlist ready as you peruse our directory and see how each solution compares.

QuickBooks Online

Designed for freelancers, small- and medium-sized businesses, Intuit’s QuickBooks Online is a cloud-based accounting software. It offers assisted bookkeeping and other financial services. Inventory management, reporting, automatic syncing and bill management are some of its notable traits.

Stay on Top of Your Inventory

QuickBooks’ inventory management contributes immediate updates and generates reports of your stock. Prompt notifications keep you aware when your stock reaches low levels. Quantities are modified automatically so you always know what items you have onsite, alleviating you from stock shortages. You also get elaborate inventory reports so you can review what products have already been stocked, top sellers, total sales and total taxes.

Coherent Report Generation

In need of a reporting tool that can generate diverse reports for your business? You’re in luck. This reporting feature can create documents such as income and cash flow statements, balance sheets and more. You can tailor each report to your needs and your accountants can be informed via email alerts. This feature also supplies you with a respectable summary of finances and small business data that can be created and shared with business colleagues.

Calculable Tax Rates

QuickBooks’ sales tax module can instantaneously adjust sales tax based on the product category and location of the sale. After you catalog your products, this tool can cipher the correct sales tax on your invoices based on date, location, type and customer. This module also allows you to stay in the know about payment due dates for state and local sales tax and gives you the option to file manually or electronically.

Mobile Access Granted

In addition to computers, QuickBooks is also available as a mobile app for iOS and Android devices. You can document expenses, docket transactions, deliver invoices, send and view reports. Your data automatically saves to the cloud and syncs across all of your devices.

Personalized Invoices

Do you wish you had the ability to put your company name and logo on your clients’ invoices? Wish granted. The invoice module comes with various customizable templates to illustrate with your preferred colors and logos. This tool also integrates with Google Calendar, TSheets or QuickBooks Online so you can arrange recurring invoices and add billable hours automatically.

Compare Top Accounting Software Leaders

Other Notable Features

QuickBooks Online comes with other features that you may find useful:

• Bill Administration: This tool allows you to keep up with bills and pay them on time so you can avoid late fees, missing payments and interest charges.
• Natural Data Entry: Thanks to the automatic sync feature, you can collect and enter bills and invoices into the system to avoid double-entry of data.
• Maintain Expenses: QuickBooks effortlessly connects to bank accounts, credit cards, PayPal, Square and more to import and sort your expenses.
• Pliable Estimates: Discounts, product stock-keeping units, payment terms and other kinds of professional estimates can be constructed and emailed to your customers.
• Real-Time Syncs: QuickBooks Online Advanced instantaneously syncs bills and invoices.

Limitations

Although QuickBooks Online has plenty of features and benefits, it has some limitations. These flaws include:

• Doesn’t create average days to pay reports

FreshBooks

Intended for small entrepreneurs and businesses, FreshBooks’ cloud-based accounting and invoicing software clarify a business’ financial standing with dashboards and reports. These dashboards and reports present transparent insights on your business from profit and loss reports to tax summaries. Some of the accessories it contains are reporting, payment management, project conversations, invoicing and more.

Android and iPhone Compatible

Did you forget to send your customers invoices before leaving the shop today? No worries. The FreshBooks app allows you to send invoices, record expenses and view the validation of invoices after they’ve been opened from your iPhone or Android device. The desktop software and mobile app consistently stay in sync to keep your data up-to-date. You can also respond to clients’ questions and feedback on the app and it will conveniently store them in one place.

Infinite Supply of Reports

FreshBooks’ dashboard comes equipped with various reports such as profit and loss, expenses, sales tax summary, payments collected, etc. You can separate these reports by team member, client or date. These reports can be saved, exported or printed and also filtered by date, client and team member.

Painless Tax Collection

Courtesy of the tax module’s automatic calculating, you can guarantee accurate sales tax when you apply it to your invoices. This feature also sorts expenses so you can be prepared to file when tax season comes.

Signature Invoices

This feature grants you the ability to design and personalize signature invoices by adding your own company logo. You can also establish personalized thank-you emails.

Compare Top Accounting Software Leaders

Other Notable Features

Here are more features from FreshBooks that may tickle your fancy:

• Expense Supervision: This element allows you to search and identify business expenses and automatically input them on an invoice for your client.
• File Project Communications: Thanks to this feature, you can save and organize your project communications in one place as well as establish project due dates.
• Simple Bookkeeping: FreshBooks’ accounting capability facilitates informed decision-making based on business data and perceptions by learning the costs of governing the business and predicting profits.
• Simple Bank Reconciliation: This tool performs immediate bank reconciliation by regulating transactions after importing them, developing changes and additions and confirming immediate matching suggestions.
• Manages Various Currencies: You can bill invoices and monitor expenses that are conducted with various currencies.
• Execute Accurate Forecasts: This tool also grants you the power to view and respond to feedback from clients on an estimate, adding a discount, enable clients to sign proposals electronically and preview estimates and quotes before you send them.
• Numerous Payment Forms: The advanced payments feature allows companies to accept credit card payments in-person, online and over the phone as well as enable recurring billing, quick billing and more.

Limitations

Although FreshBooks has a vast amount of features and benefits, it has some limitations. These limitations include:

• Mileage tracking is not an inbuilt feature.
• Does not have an inbuilt inventory management module.
• There’s no community forum for users to converse with each other.
• No fixed asset management module.

Xero

Xero provides businesses with detailed financial statements to aid them in reviewing their financial status. This solution permits businesses to integrate with more than 800 apps and software systems, including PayPal, Stripe, ADP and more. Xero also comes with performance dashboards that oversee performance and profitability. Key features include inventory management, invoicing, bill payments and more.

Adjustable Invoices

This module enables you to upload your logo to your invoice, create invoice reminders and inform you of whether or not your invoice was seen and paid. You can also send invoices in bulk amounts, create repeating invoices and grant your customers the option to pay them instantly. Editing invoices is controlled and original invoices are stored in your system.

Consistent Stock Control

Xero’s inventory management trait keeps you on top of your inventory with consistent displays of your top-selling product lines so you can review your profits. You can determine what to order and how to price it. You can also swiftly input large numbers of inventory into Xero from spreadsheets.

Measurable and Shareable Reports

In need of customizable reports that measure your key performance indicators and can easily be shared with your advisors? Xero’s reporting tool takes care of that. This tool can even help you prepare a thorough budget or import one that already exists and compares financial performance against actual or chosen ranges of time. This feature also utilizes custom columns, formulas, text blocks and drag-and-drop accounts to revise your reports.

Modifiable Tax Proportions

The sales tax module can handily charge or record sales tax on transactions, bills and invoices. You can also set additional tax rates and set them as defaults for sales and purchases. There’s also a sales tax report that includes all of the transactions that transpired and were applied in calculating the totals on the sales tax worksheet.

Accessible on Any Device

Xero’s mobile accounting app maintains developing and managing invoices, transforms quotes into invoices, oversees contacts, corrects and files bank transactions, and more on your Android or iPhone.

Compare Top Accounting Software Leaders

Other Notable Features

Here are some other tools Xero has that may be suitable for your small business accounting needs:

• Real-Time Dashboard: Xero’s dashboard monitors cash flow with charts and graphs, implements real-time views on the statuses of expense claims, running balances and reconciliations across all accounts.
• Top-Notch Security: Thanks to encryption, two-step authentication and the cloud, Xero keeps your personal and financial data secured.
• Simple Bank Reconciliation: Bank transactions are automatically and securely imported into the system and the cash-coding tool allows you to group related bank transactions closely so they can be matched.
• Regulate Bills: This module allows you to manage charts and graphs that display when bill payments are due and Xero has a “pay now” button that permits you to pay bills instantly with debit or credit cards, direct debit, Apple Pay and more.
• Assort Customer Data: Xero’s contacts and smart lists tool holds your customer’s transaction history such as invoices, bills and most purchased products or services so you can view how quickly they make their payments.
• Manage Files and Documents: You can attach documents in files before you email them, attach multiple documents to transactions and records and enable restricted access on sensitive files thanks to Xero’s files accessory.
• Comprehensive Search: Conduct full database searches for contacts, transactions, bills, invoices, quotes, purchase orders and more with Xero’s thorough search tool.

Limitations

Xero has a wide assortment of accessories and benefits, but it also has some limitations. These limitations include:

• It only offers third-party vendor payroll features through integrations with solutions like Gusto.
• It only has a small amount of pre-built reports
• Doesn’t track subsidy processes

Wave Accounting

Identifying cash flow trends with reports that exhibit month to month and year to year comparisons is essential for small businesses and entrepreneurs. Wave effectively performs this task and possesses receipt and invoicing capabilities. Other capabilities include receipt scanning, estimations, bill management and more.

Mobile Access to Invoices

Wave’s app for Android and iPhone allows you to build, modify and relay invoices wherever you are. You are immediately notified when your invoices are due, they’ve been viewed or are paid off so you can efficiently keep up with your cash flow. Your clientele will automatically get payment reminders when payment deadlines arise.

Categorized Reports

You can create and export any type of report from balance sheets to sales tax reports. Thanks to Wave’s reports landing page, all of your reports are assorted by these and more sections:

• Get the Big Picture: Your profit and loss statement, balance sheet and cash flow reports are located here.
• Stay on Top of Taxes: Never worry about sales tax or tax season again because your sales tax, payroll wage and tax report are stored here.
• Focus on Customers: The aged receivables and aged payables reports are in this section. The aged receivables report shows how much money is due to you and who owes it while the aged payables report displays how much money you owe and to whom.

Regulated Invoices

In addition to getting notifications when invoices are viewed, paid or due, you can configure repeated or duplicated invoices with flexible payment terms and automatic credit card and bank payments. This tool also tracks full and partial payments as well as overdue payments. You can fine-tune invoices with your ideal columns, logos and colors.

Accurate Sales Tax

Wave instantaneously ciphers sales tax for your invoices so they comply with state and local tax standards. Wave also comes with a nimble dashboard that organizes all of your payments, invoices, expenses and income so you’re ready for tax time.

Compare Top Accounting Software Leaders

Other Notable Features

Wave’s other noteworthy tools include:

• Repeated Bills: You can set up credit card payments and switch between manual and automatic billing as needed.
• Photograph Receipts: When you take photos of receipts offline through the Wave app, it automatically syncs the photo when it’s back online.
• Shadow Income and Expenses: The income and expenses tracking accessory allows you to stay in the know about profits and losses.
• Hefty Accounting: Wave’s robust accounting feature takes care of bulk transaction updates and employs double-entry accounting software.
• Extensive Connections: Thanks to Wave’s Payment Card Industry Data Security Standard Level One (PCI-DSS Level 1) component, the software can keep an unlimited amount of credit card and bank account connections secure.
• Transformable Estimates: Estimates can be delivered and converted into invoices once approved.
• Easily Pinpoint Transactions: When you’re having trouble looking for the right transaction, the search tool can help you search and find it by description.

Limitations

Although Wave has a wide array of modules and benefits, it has some limitations. These restrictions include:

• Doesn’t create purchase or sales orders.
• Time tracking is not available.
• Contact management module has limited functionalities.

Zoho Books

Zoho Books is a tax compliant solution that assists in managing receivables and payables, watching financials, automating workflows and partnering with employees. Some of its strengths include banking, inventory management, invoices and more.

Forgery-Proof Invoices

Kiss invoice forgery and tampering goodbye because Zoho Books’ invoice module permits customers to digitally sign invoices. Transactions are validated and approved before the invoice is transported. Customers can select cash, web or check payment options. You can draft and customize invoices with your company logo and preferred fonts or pick one from the template library.

Monitor Your Inventory Vigilantly

The inventory management tool seamlessly edits and organizes information about your inventory such as stock-keeping unit (SKU), product image, vendor details, cost and available stock. You can appoint reorder levels so you’re notified before stock levels drop below the minimum. You can arrange purchase orders to pre-selected sellers automatically.

Tag Reports with Ease

Wish you could organize reports with specific tags and filter them when you need them? Wish granted. The reporting tool allows you to create and assign tags to specific products and contacts so you can easily locate the ideal report. This tool also generates and personalizes reports, including profit and loss, balance sheet and cash flow statements. You can also access transaction history reports to review your top-selling products, customers, sellers and more.

Clearly Define Sales Tax

Thanks to Zoho Books’ sales tax accessory, you can set a default tax rate, determine multiple taxes and input exemptions that correlate with your business. This feature can also compute and supply you with an elaborate sales tax report.

There’s an App for That

Zoho Books’ iOS and Android app grants you the power to generate transactions, run reports, enable reminders, record times and more.

Compare Top Accounting Software Leaders

Other Notable Features

Zoho Books is also equipped with these tools that could be helpful:

• Bill Control: This accessory allows you to activate recurring bills for purchases that occur at normal intervals.
• Estimates via Client Portal: You can access Zoho Books’ client portal to promptly send, approve and partner with clients on estimates. You’ll get notifications when customers accept or comment on an estimate.
• Oversee Expenses: This accessory allows you to record, sort and bill expenses to your customers when required.
• Manageable Dashboard: Income and expenses are broken down in total receivables, sales, top expenses and more courtesy of Zoho Books’ dashboard.
• Restrictions: The access component allows you to restrict access to specific users and files.
• Reconcile Transactions: Connecting, importing and reconciling transactions from bank and PayPal accounts are possible with the banking capability.
• Store or Transfer Documents: You can upload documents to the cloud through Zoho Books’ drag-and-drop feature or auto-scan document details instantly and convert them into invoices, bills, expenses, sales or purchase orders.

Limitations

Despite Zoho Books having a bountiful amount of modules and benefits, it also has some limitations. These flaws include:

• Profit and loss reports don’t show profits/losses of particular customers.
• No projecting profitability data in projects module.
• Can’t send estimates and invoices to different companies with the same contact.

In Conclusion

There you have it. A complete list of the best small business accounting software that can manage your inventory, calculate sales tax, provide customizable invoices, generate thorough reports and is available on your Android or iPhone. These features may be what you need to conduct bookkeeping for your small business. Other notable features may have caught your attention. Either way, you need a solution that aligns with your business needs.

Which small business accounting software is your favorite and why? Tell us in the comments!