Everyone has a different level of organization for their small business expenses and receipts, ranging from shoe boxes full of receipts, to clumps of receipts pinned together with the total on a post-it note, to some sort of formal filing system. The good news is that accounting software can help your small business get organized no matter your natural tendency.
Accounting software is not a one size fits all solution, every small business owner has specific reporting needs. It can be overwhelming to find the right accounting software to fit those needs. So where do you start? The best place to start is to consider your current and potential future needs to find the right accounting software for your small business. And when you're ready for small business funding, your books will be in order.
- What is the current stage of your company? If you’re just starting your business and your needs are for basic organization and reporting, then you do not need all the extra bells and whistles in your software. If your business is more established with employees or inventory, you will need to ensure your software will track these expenses accordingly.
- How fast is your business growing? If you’re expecting your business to grow in the near future make sure the accounting software can expand with you.
- What is your budget for accounting software? It is important to make sure you have a reasonable expectation around your accounting software budget. Money doesn’t grow on trees, but it is necessary to have the right tools in place to assist in making smart business decisions.
The following are five of the best accounting software products to consider in helping you organize your small business. Remember to think about your current and potential future needs as you consider each of them.
QuickBooks Online
Cost: Simple Start $15 per month, Essentials $35 per month, Plus $50 per month
Offers free 30-day trial
QuickBooks Online offers three plans, so you pay for the options you need.
Simple Start – $15 per month
The Simple Start plan includes one user access and allows you to send and track custom invoices, create and manage estimates, track income and expenses, and will sync with your bank to import transactions directly into QuickBooks.
Essentials – $35 per month
The Essentials plan has three user access and includes everything in the Simple Start plan plus you can manage and pay bills and have access to additional sales and profit reports.
Plus – $50 per month
The Plus plan has 5 user access and includes everything in the Essentials plan plus will track your inventory and prepare and print 1099s.
Payroll Feature
The payroll feature for QuickBooks is a separate plan that can be added to any of the Online plans. Depending on your needs you can subscribe to a basic payroll plan or an enhanced payroll plan. Again, you will pay for the options you need.
QuickBooks accounting software is designed with the small business owner in mind, so anyone can easily navigate regardless of their accounting knowledge. Their software has the ability to grow with your small business through each plan offered and fits in most small business budgets.
Xero
Cost: Starter $9 per month, Standard $30 per month, Premium 10 $70 per month
Offers free 30-day trial
Xero also offers three plans but is different from other accounting software in that Xero’s plans include access to all the features, such as bank feeds, invoicing, payments, budgeting, and reporting. Although each plan includes access to all the features, you are limited on the number of transactions each plan will cover. Xero allows an unlimited number of users for all plans.
Starter Plan – $9 per month
The Starter plan includes sending 5 invoices and quotes per month, entering 5 bills per month, and reconciling 20 bank transactions per month.
Standard Plan – $30 per month
The Standard plan includes sending unlimited invoices and quotes, entering unlimited bills, and reconciling unlimited bank transactions, and manage payroll for up to 5 employees.
Premium 10 Plan – $70 per month
The Premium 10 plan includes everything in the Standard plan plus handles multiple currencies and manage payroll for up to 10 employees. You can add more than 10 employees for an additional fee to the Premium 10 plan.
See also: Best Small Business Accounting & Finance Software for VOSBs without a CFO
Payroll Feature
Xero includes the payroll feature in their plans, except for the Starter plan. If you have employees, you will want to check that your state is included in Xero as they only provide payroll service for 36 states.
Xero has not been around as long as QuickBooks and is quickly gaining in popularity. The pricing of Xero fits in most small business budgets and the software will grow with your small business.
Freshbooks
Cost: Lite $15 per month, Plus $25 per month, Premium $50 per month
Offers free 30-day trial
Freshbooks also offers three plans that works like QuickBooks and Xero combined, whereas each upgraded plan includes additional features and number of clients. Freshbooks does not offer any payroll option. There is an added fee of $10 per month per additional user.
Lite Plan – $15 per month
The Lite plan includes 5 clients, unlimited invoices and estimates, track time and expenses, auto import of bank account transactions.
Plus Plan – $25 per month
The Plus plan includes everything in the Lite plan plus 50 clients, auto send payment reminders, charge late fees for overdue invoice, schedule recurring invoices, and send proposals.
Premium – $50 per month
The Premium plan includes everything in the Plus plan plus 500 clients.
Freshbooks offers time and expense tracking that many of the other small business accounting software products do not have available. If this feature is a need for your small business, then FreshBooks is a great solution and fits in most small business budgets.
Zoho Books
Cost: Basic $9 per month, Standard $19 per month, Professional $29 per month
Zoho Books also offers three plans that works like QuickBooks and Xero combined, whereas each upgraded plan includes additional features and number of transactions and users. Zoho Books does not offer any payroll option.
Basic Plan – $9 per month
The Basic plan includes 50 contacts, 2 users (1 user + 1 accountant), 5 automated workflows, bank reconciliation, custom invoices, expense tracking, projects and timesheets, recurring transactions.
Standard Plan – $19 per month
The Standard plan includes everything in the Basic plan plus 500 contacts, 3 users (2 users + 1 accountant), 10 automated workflows/module, bills vendor credits and reporting tags.
Professional Plan – $29 per month
The Professional plan includes everything in the Standard plan plus unlimited contacts, 10 users, 10 automated workflows/module, purchase order, sales order, inventory, and custom domain.
At a lower price than the other accounting software, Zoho Books is a good fit for a small business that has a lower budget and no employees.
See also: Selecting an Accounting System for Government Contractors
Wave
Cost: Free
Yes, you read that right, Wave is a free unlimited accounting software. There are no limits on the number of transactions that can be entered into Wave during each month. Wave offers many features such as, invoicing, receipt scanning, bank and credit card connections, income and expense tracking, multiple businesses in one account, and journal entries. There are some add-ons, such as payroll, for a fee.
Free will fit into any small business budget. So, if you are low on funds but need to get your small business organized with accounting software, Wave is an excellent solution for you.
Accounting is One Piece of the Basics of Small Business Financing
With this comparison, now you can choose the accounting software product that is right for you and your small business. It’s all comes down to knowing the basics of small business financing. As small business lenders for veteran-owned and main street small businesses, we want to make sure you know your business financing needs. The ebook, “The Basics of Small Business Financing,” will help you understand when you need to look for small business funding and the types of business financing out there. Download it now.
