If you're a small business, it's worth comparing accounting software before settling on which one is right for you. Includes Free Accounting Software. The Best Accounting Softwares are Quickbooks, Wave, accounting seed, Xero, Freshbooks, Zoho Books, SlickPie, holded.
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(Last Updated On: January 7, 2021)
Every small-to-medium business should be using some sort of cloud-based accounting software to both simplify and streamline their business processes.
If you’re worried about heading for the cloud, or just simply want to get up to lightning speed with today’s very best accounting systems then you’ve come to the right place.
Best Accounting Software for Small Business
Accounting records date as far back as over 7,000 years ago to ancientMesopotamiathe Middle East, where even then it was important for businesses to be able to track their income and expenses for traded goods and services. But although the concept has remained largely the same, the methods have changed…drastically.
We’ve compiled a list of accounting software ranking the top software in order and listed the key features of each one.
Accounting software for small business comparison:1. QuickBooks Online
QuickBooks Online is a leading cloud-based double-entry accounting software offered by Intuit that has vastly dominated the accounting software market for last 20 years, serving over 29 million businesses in the US alone! The cloud software is easy to use and is rich in features. It enables users to manage their businesses on the go through a customized, intuitive dashboard and simple reporting.
QuickBooks offers both cash-based and accrual accounting and is ideal for small-to-medium businesses who want to be able to manage their accounts from anywhere and everywhere.
A great feature of QuickBooks is that it allows businesses to provide access to their online accounts allowing accountants to collaborate and also integrates with over 80 partner apps including inventory management tools and more. With QuickBooks, you’ll be able to see a clear snapshot of the health of your business with access to over 20 reports that are all customizable.
The company offers a free 30-day trial with no annual contract required and has 3 payment tiers offering multiple features.
Key Features of QuickBooks Online:
2. Xero
Born in 2006, cloud-based software Xero is trying to catch up with QuickBooks boasting over 1 million subscribers worldwide. Known for its simple interface, its features include inventory management, purchasing, payroll, expense and asset management in addition to its regular accounting capabilities.
It’s ideal for SMBs in the retail, creative, e-commerce and high-tech industries. It’s also suitable for startups.
Xero is also accessible through its iOS or Android applications. Its dashboard gives users a real-time view of their cash flow from invoice tracking through to payments. Users can send invoices, fast-track payments and set up reminders to customers of late payments.
Xero automates bank reconciliation as it imports your most recent transactions and categorizes them for you as well as links purchase orders to bill automatically, ensuring speedy payments.
Key Features of Xero:
3. Zoho
Zoho Books is a double-entry accounting software for small-to-medium businesses, helping them to better manage their business finances. Zoho’s business accounting software helps keep cash flow healthy by streamlining workflow and centralizing business transactions. Like Xero, you can send invoices to customers and also allow customer payments by linking to a payment gateway. By simplifying the payment process, you’re more likely to get paid faster by your customers. Zoho will also save you time as your accounting tasks are automated – you can set up payment reminders, auto charges, and recurring invoices.
From an accounting perspective, you can create financial reports, generate purchase orders, sales and tax reports and more. Zoho includes many other features, such as project management for team collaboration, inventory, expense, and sales management. Zoho is ideal for businesses that manage projects or bill by the hour as it has strong time tracking, project management, invoicing, and payment features.
You can try out Zoho for free with their 14-day free trial.
Key Features of Zoho Books:
4. Wave Financial
Western digital external hard drive for mac reviews. It’s Free! Now we’ve got that huge benefit out of our system, here’s a look at Wave Financial’s accounting software…
For businesses that are perfectly happy without all the fancy features and just want to get to it, Wave Financial offers a cloud-based accounting software. It’s a great option for service-based and start-up businesses – those without inventory preferably. The software is easy to use, and seriously easy to set up. You’ll be greeted with a simple customizable dashboard displaying sales, accounting, purchases, banking, payroll and reports. At a glance, you’ll be able to see your cash-flow, profit and loss, accounts, payables and receivables. With such a user-friendly interface, it’s easy to see exactly where you are at.
A neat feature of Wave is that along with accepting credit cards and ACH payments for invoices online, Wave Checkouts allows you to send a link instead of an invoice, to a client who can then make payments online. If you have a website with, this link can be embedded at the checkout – perfect for businesses that need upfront payments.
Due to its free nature, it is lacking a few features that some businesses may not want to miss out on, such as, tracking billable hours, inventory and asset-management tools (this could be an issue if you want to calculate depreciation for taxes).
Key Features of Xero:
The catch: Wave’s basic accounting software is free, however, if you’d like to add online credit card processing for invoices, there will be more fees. Bank payment processing costs 1% per transaction etc. Be sure to double check all pricing before diving in.
5. FreshBooks
FreshBooks accounting software caught our attention due to its incredible ease of use and simplicity – the user experience is exceptional. When it comes to invoicing software for businesses and freelancers it is right up there.
When it comes to expense tracking, receipt photos can be uploaded, categorized, attached to clients and even projects so you can see exactly what you’re spending and where. More notably, you could use FreshBooks as your project management hub to track all projects (set deadlines, track employee hours and bill clients for hours tracked). Employees can use it to track their time and add expenses, you can even add contractors to the account where they will only see what you allow them.
Limitations: FreshBooks lacks inventory-management and purchase-order features, therefore, it is less suited to businesses with inventory and better for those with service or project-based businesses.
Key Features of FreshBooks:
You can try out FreshBooks for free by taking advantage of their 30-day free trial. Plans then range from $15-$50 a month depending on which you choose.
6. ZipBooks
For those businesses that are still using an Excel spreadsheet or even the old ‘shoe-box’ method to track income and expenses, then ZipBooks’ starter plan (which is free by the way) could be a good place to start. Their paid plans cost between $15-$125 a month.
ZipBooks covers all the basics but is missing a few elements: processing of employees payrolls, users are limited to one (unless you upgrade your plan), you can only connect one bank/credit card account, and you aren’t able to run a statement of cash flows.
Key Features of ZipBooks
What is small business accounting software?
Not sure what an accounting system actually is? Find out here:
An accounting system is simply how you keep track of your business’s records. It is here that you enter all of your incoming money be it from invoices or funding, as well as listing all the money leaving your business be it from bills, business costs or any money spent from your business’s bank account. Think of it like your business financial activity tracker capable of detailed statistical reports to aid in your business decision making.
What does small business accounting software do?
We’ve come a long way in the last 7,000 years, we no longer use stones, pen and paper are a thing of the past and even manually inserting figures into excel (where you’ll need to categorize each expense) is slowly becoming extinct. Business accounting software today is generally automated and computer-based using either software of specialized cloud-based services.
How can small business accounting software benefit your business?
Now you know what an accounting system is, we’ve listed some key advantages and benefits of using accounting software:
Accounting Software SqlHow to choose the best accounting software for small business?
If all of these systems are clouding your judgment we advise giving the free tryouts a go to see which is best for your business. Hiring a CFO for your business, or getting your CFO to compare and see which best suits them would be the most logical options – after all, they will be working with the software.
These accounting software systems offer comparable features, however, some may be better suited to specific businesses. QuickBooks Online has demonstrated itself not only as an industry leader but as the software with the most features with the most comprehensive and customizable reports. An accounting system is pretty much useless unless you can get the desired information clearly organized out of the system to interpret your data.
The right fit, however, depends on your industry, business type and size, and also payment structure. For example, if your business mostly bills hourly rates or per project, then you may prefer Zoho as it is strong in time-tracking and project management.
Disclaimer: The information contained in this article is provided for informational purposes only, should not be construed as legal advice on any subject matter and should not be relied upon as such. The author accepts no responsibility for any consequences whatsoever arising from the use of such information.
Related Posts
If you’re in need of accounting software for your business, it’s safe to say that you’ll be using that accounting software to examine every dime coming in and out of your banking accounts.
At some point, you’ll probably ask yourself “How much am I paying each month for this accounting software, and can I eliminate that expense?”
Yes, you can get free accounting software, and in this article we’ll look at four popular and totally free options (find out how we chose the featured products here), along with a few reasons that you might be better off paying for your accounting software even when there are free options available.
Best Accounting SoftwareHere’s what we’ll cover:Free accounting software: Wave ZipBooks
Open source accounting software:
Akaunting GnuCash Free accounting software
While it’s not too difficult to find free versions of some business software, truly free accounting software (not just a free trial) is something of a rarity, with most popular accounting vendors charging a monthly fee for even their most basic version. These two accounting solutions, while not as advanced as their paid counterparts, are built on a foundation of features capable of meeting the needs of most small or midsize businesses.
Wave
4.4/5.0
1,037 reviews The main dashboard in Wave Accounting (Source)
Designed with the small-business owner in mind, Wave—which was acquired by H&R Block for around $400 million in July of 2019—prides itself on its simplicity and ease of use. Its intuitive user interface keeps the most important financial data front and center, accessible immediately after signup via any device with a web browser.
The idea here is that keeping things simple relieves much of the stress associated with accounting software. But don’t be deceived by this bare-bones approach; for a free piece of software, Wave is rich in features. This includes informative user dashboards, unlimited income and expense tracking, and customizable invoicing and sales tax processes.
Other features include:
While the accounting app really is free, accepting payments (2.9% + 30 cents per credit transaction, or 1% per bank transaction) and running payroll ($20 per month plus $4 per employee) are paid, optional features.
Wave also appears on our Accounting FrontRunners list for 2021.
Accounting Software Setup
Not sure if Wave’s free accounting app is right for you? Check out this video walkthrough of how to set up recurring invoices:
ZipBooks
4.5/5.0
93 reviews The main dashboard in ZipBooks (Source)
Like some other free accounting systems, ZipBooks offers a complimentary starter tier to its more robust paid options. The free version does offer notable useful features for small businesses.
For no cost, users can send unlimited invoices, process digital payments, and manage as many vendors and customers as they need. This cloud-based solution also boasts integration with third-party applications such as Square, PayPal, Slack, and Gusto, giving organizations the freedom and flexibility to do business on their terms.
Simply Accounting
Other features include:
Learn how to get started using ZipBooks with this tutorial:
Open source accounting software
If you need an accounting system that you can modify to meet your business’ unique needs, open source software is a great option to consider. Users can download the source code—usually for little or no cost—and mold it into their ideal accounting system.
Open source systems require a certain degree of development expertise. But if you have a dedicated IT department, employ a coding expert, or are willing to hire a third-party consultant, open source software offers a viable alternative to the more monolithic—and pricey—solutions on the market.
Akaunting
(No reviews yet)
The Accounts overview in Akaunting open source accounting software (Source)
The curiously named Akaunting had its first stable release in 2018 and has been growing steadily ever since, with 180,000 downloads, 80,000 cloud users, and 10,000 project contributors, according to the Akaunting website. It is available in almost 50 different languages.
Akaunting aims to remove the stigma of open source software being difficult to use, claiming to get users up and running and fully functional in less than five minutes. Users can download the main accounting core, which includes all the standard accounting features small businesses will need, and add optional features as app downloads. Some of these optional apps include contract management, documents management, white label customization, and some integrations are paid.
If you run into trouble, free support comes through extensive online documentation, and community forums and chat rooms. The project is also monetized through a paid, dedicated support service, starting at $99/month if you really need help and don’t mind spending to get it.
Core features include:
Want to see Akaunting in action? Check out this video:
GnuCash
4.6/5.0
40 reviews Checkbook-style register in GnuCash (Source)
This on-premise accounting solution offers a robust set of features—recurring transactions, bank reconciliation, and financial reporting among them. What’s more, it’s as affordable as it gets (i.e., free) and endlessly customizable.
The GnuCash register is like a digital checkbook of sorts, with the ability to split transactions, display multiple accounts in a single window, and tailor the appearance to your liking. But the software’s signature quality is its “double entry” feature, which mandates that all transactions must debit and credit accounts in equal measure—keeping your books balanced at all times.
Other features include:
Accounting Softwares Systems
Check out the video below on GnuCash for an overview of how this free accounting software works:
Why you must consider paid solutions, too
While the systems outlined above might work for some organizations, they won’t work for all. In many cases—even yours, potentially—investing in a reputable paid solution will pay dividends in the long run.
So now that we’ve explored some free and open source options, you may also want to look at some top-rated paid systems, too, so you have the full picture. Check out our accounting software directory, where you can learn about common features, the products that are most recommended by our advisors, and the top rated products based on real user reviews.
The Software Advice accounting software Buyers Guide (Source)
How we chose featured products
To identify the systems featured here, we Googled the terms “free accounting software” and “open source accounting software” during the month of April 2021 in an incognito window with the location set to the U.S. Provided they met the following criteria, the top solutions on the first page of search results are presented/included above in alphabetical order:
Accounting Software Spain
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