A few years ago, I took over as financial secretary for my local synagogue, and I had my first taste of using accounting software.
It didn’t go well.
Our synagogue was stuck with an outdated program that ran slowly on my laptop and caused me any number of headaches. Without a background in accounting, I found the user experience of the old program to be counterintuitive and difficult to learn. I made many mistakes during my tenure as financial secretary that our poor treasurer (who was also an accountant) had to find and fix.
My frustrations with that particular accounting software was enough to turn me off any accounting software programs—until now. Since that time, there has been a major boom in accounting software options, and it is much more likely that you will be able to find a program that fits your small business or organizational needs and make doing the books a pleasure rather than a chore.
Here are the best accounting software programs to put your small business finances in order:
Xero has made doing the books a much easier and more fun part of running your small business. The company aims to make their accounting software beautiful, and their easy-to-use dashboard does just that. With an intuitive user interface, you can easily handle all of the following functions on Xero’s cloud-based accounting software:
- Bank synchronization
- Bank reconciliation
- Accounts payable
- Accounts receivable
- Bill management
- Financial reporting
- Cashflow quick views
- Document sharing
Old school bank reconciliation often feels like a soul-sucking, time-intensive chore. With Xero, you choose “Reconcile Account” from the Manage Account menu in the Bank Account view. At that point, the program offers you two matched columns: one on the left showing the bank statement line items, and the one on the right showing the transactions recorded in the program. If your payment amounts align, they’re marked with a green OK button that you can click to verify the reconciliation.
In addition, you can define “rules” for incoming transactions, so that every bill that comes in from the office supply vendor will be categorized as an office expense. Also, if you are having trouble reconciling a transaction, you can click “Find Match” to search through your records. This is invaluable if you have a customer who is paying two invoices with one check, for example.
Xero offers free mobile apps for iPhone/iPad and Android devices. The mobile app, known as Xero Touch, is perfectly designed for monitoring real-time cash flow and keeping track of your transactions from a mobile phone. The app also allows you to make and send invoices right from the app, as well as snap pictures of receipts and store them within the app.
The company offers live email support 24/7/365, so hitting a snag in the wee hours before a deadline does not have to be the end of the world. Once you email your issue, the customer support personnel will either email you a response back or will call you if the issue can’t be addressed via email.
Xero’s most basic software, the Starter plan, is $9 per month (although there are often introductory offers that can lower their prices for a period). With this program, users can create and send up to 5 invoices per month, enter and pay up to 5 bills per month, and reconcile up to 20 bank transactions per month. The Standard plan costs $30 per month, allows for unlimited invoices, quotes, bills, and bank reconciliations, and will handle payroll for up to 5 employees. The top tier, Premium 10, is $70 per month and includes payroll for up to 10 employees. (There is also Premium 20 and Premium 100 if you have even more employees).
Xero offers an easy-to-navigate interface and excellent customer service that makes keeping the accounts a more enjoyable part of your business. Read our Xero vs Quickbooks comparison.
QuickBooks is beloved accounting software for good reason. It’s been the giant in the small business accounting industry for many years, and it offers great basic-to-high level accounting functions across its many products. In addition, since QuickBooks is an Intuit program, it works well with TurboTax and other Intuit products to make all of your financial accounting tasks a snap.
There are several different QuickBooks options available. You can buy downloadable software, QuickBooks Premier Desktop, for $349.95, although there are often sales that lower this price. Once you’ve downloaded the software, there is a step-by-step setup, as well as video tutorials to help you learn the program. You may only install the downloadable software on a single computer.
You can also access QuickBooks online, which will allow you to work across all of your devices, including smartphones and tablets. The online options go from Simple Start, for as little as $15 per month, to Essentials for $30 per month, all the way up to Plus, for $40 per month, and each level allows you to customize by adding payroll options for an additional price. The Essentials level allows you to manage and pay bills and create instant sales and profit reports, while Plus allows you to track inventory and prepare and print 1099s. In each case, QuickBooks offers a free 30-Day Trial.
QuickBooks’ mobile app is basically the desktop dashboard shrunk down. Using the QuickBooks app on a tablet is a perfect fit, but it can be somewhat frustrating on any device with a smaller screen than that.
QuickBooks offers live phone support only from 6am-6pm PST Monday through Friday and from 6am-3pm Saturday. If you have a problem late Saturday night with your QuickBooks Online software, you will not be able to get it resolved until bright and early Monday morning.
Investing in QuickBooks means you will get a solid cloud-based or downloadable accounting program that will take care of everything a small business owner might need. Read our full review of Quickbooks Online vs Desktop.
Sage 50c provides you with downloadable accounting software with secure online access on any device. The program delivers built-in accounting best-practices, as well as some powerful tools you might not find on other platforms. In particular, Sage 50c’s inventory management tools are among the best in the business, which is a boon for small business owners who maintain stock.
The program dashboard is completely customizable with shortcuts, so you can put the functions that matter most to your business front and center. If you have any issues with Sage 50c, the program offers one-click chat and unlimited phone support.
There are three price tiers for Sage 50c: Pro, which costs $439 per year for one user, Premium which costs $679 per year for one user, and Quantum, which costs $1,729 per year for up to three users. Pro allows you to pay bills, send invoices and receive payments, and manage your cash flow and costs; Premium offers you inventory planning and tracking, as well as the ability to manage jobs and expenses, and Quantum gives users Enterprise-level accounting and industry-specific features.
Newbies to accounting or bookkeeping may find that Sage 50c is not as intuitive or easy to use as some of the other programs on this list. However, it provides you with all of the accounting functions you might need and is worth a little extra time to learn the program.
While some might claim that FreshBooks is not true accounting software—it does not include certain functions that you generally expect from accounting software, such as double-entry bookkeeping—it is nonetheless an important program that offers a great deal of value for service-based business owners or solopreneurs. In particular, I know a number of freelancers who rely on FreshBooks.
The program was started specifically to make invoicing and billing easier for service-based businesses. FreshBooks allows you to create professional looking invoices that you can customize and set to populate automatically with a triggering event. The program also syncs with time-tracking software like Woocommerce and payroll software like ZenPayroll, as well as integration with PayPal for easy payments. In addition, there are a number of internal add-ons, such as project time-tracking, that can help you to keep better track of your work and expenses. You can also easily accept online credit card payments through FreshBooks, and the program will automatically send late payment reminders and fees.
Finally, there is third-party integration, which the program refers to as “Invite Your Accountant.” This makes it very easy to share necessary tax information with your accountant remotely.
FreshBooks has three payment tiers: Lite, which costs $15 per month and allows you to bill up to 5 active clients, Plus for $25 per month and up to 50 clients, and Premium for $50 per month and up to 500 clients.
Wave is free cloud-based accounting software, making it a good option for new business owners with no extra capital available for accounting. With Wave, you get invoicing, expense tracking, receipt scanning, and integration with bank accounts and online platforms such as PayPal—all for free. Wave manages to offer all of this for free via advertising.
However, there are also some services Wave offers for a price. You can offer credit card processing to your customers with Wave—it will cost you 2.9% + 30¢ per transaction for all credit cards, with no additional fees. You may also handle your payroll with Wave, for a $15 base fee plus another $4 per employee. If you are paying more than 10 employees, there are discounts available.
Wave has created an intuitive interface that allows small business owners to tackle double-entry accounting with ease. It also allows you to invite unlimited guest collaborators, meaning you can easily loop in your accountant or business partner.
Customer service can be a little slow to respond if you have a problem with Wave, although considering the fact the software is free this is a minor quibble. Overall, Wave is an excellent option for a cash-strapped small business owner.
The Bottom Line
Keeping the books for your small business does not have to be a headache. Using any of these accounting software programs can help you save time while handling the finances of your business, so you can get back to doing the work you love.