8 Best Accounting Software for Small Business Owners in 2020

If working capital is the lifeblood of your business, accounting and bookkeeping software is the beating heart that keeps it flowing. That’s not to say your choice of software will make or break your business. But it’s a lot more important than many people realize. 

So how do you make the right choice? Simple, you choose the best accounting software for small business from our list. The choices we put together here are among the top-rated options, and at least one is perfect for you. 

For starters, let’s take a look at how they stack up.

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Top 8 Accounting Software for Small Business in 2020

1. QuickBooks Review

QuickBooks is the best small business accounting software of 2020. It has everything a small business owner needs in terms of financial management, but it has a price point to match. Full Review

  • Easily scalable
  • Automatic tax calculations
  • Customizable dashboards

QuickBooks is the best small business accounting software of 2020. It has everything a small business owner needs in terms of financial management, but it has a price point to match. Full Review

2. FreshBooks Review

FreshBooks offers top-of-the-line invoicing, expense reporting, time tracking, and project management. However, it does have some limitations in invoice customization. Full Review

  • Exceptional UX design
  • Great inventory management
  • Unlimited invoicing

FreshBooks offers top-of-the-line invoicing, expense reporting, time tracking, and project management. However, it does have some limitations in invoice customization. Full Review

3. Xero Review

Xero performs well in most categories that matter for a small business. Particularly noteworthy are its data importing and collaboration options. Full Review

  • Comprehensive financial reporting
  • Inventory management
  • Unlimited users on all plans

Xero performs well in most categories that matter for a small business. Particularly noteworthy are its data importing and collaboration options. Full Review

4. Wave Review

Wave offers unsurpassed small business accounting software for free. It easily outranks even some paid options. Rich with features, Wave is worth a try for any burgeoning entrepreneur. Full Review

  • Free
  • Easy to set up
  • Investment tracking

Wave offers unsurpassed small business accounting software for free. It easily outranks even some paid options. Rich with features, Wave is worth a try for any burgeoning entrepreneur. Full Review

5. Zoho Books Review

Zoho Books is well-priced for its broad feature set. It’s particularly appealing to small businesses with a lot of growth potential. But a lack of payroll support hurts it. Full Review

  • Customizable invoices
  • Customer portal
  • Sales tax liability tracking

Zoho Books is well-priced for its broad feature set. It’s particularly appealing to small businesses with a lot of growth potential. But a lack of payroll support hurts it. Full Review

6. Kashoo Review

Kashoo lets you manage income and expenses effortlessly. If you just want no-frills bookkeeping and accounting with no fancy features, Kashoo delivers. Full Review

  • Utterly simplified interface
  • Custom support plans
  • Excellent mobile apps

Kashoo lets you manage income and expenses effortlessly. If you just want no-frills bookkeeping and accounting with no fancy features, Kashoo delivers. Full Review

7. ZarMoney Review

ZarMoney is a comprehensive small business accounting solution. It has good invoice customization, solid integrations with popular services, and top-tier bill management. Full Review

  • Collaboration tools
  • No merchant service fees
  • Simplified transaction tracking

ZarMoney is a comprehensive small business accounting solution. It has good invoice customization, solid integrations with popular services, and top-tier bill management. Full Review

8. Sunrise by Lendio Review

Sunrise by Lendio meets accounting industry standards in most respects and surpasses them in some. Lack of time-tracking features is a drawback, but it’s a great option if you don’t want to pay for accounting software. Full Review

  • Free
  • Unlimited users can collaborate
  • Exceptional user interface

Sunrise by Lendio meets accounting industry standards in most respects and surpasses them in some. Lack of time-tracking features is a drawback, but it’s a great option if you don’t want to pay for accounting software. Full Review

Small Business Accounting Software Reviews

QuickBooks Review

QuickBooks

BEST FOR

Small businesses looking to expand

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  • Rating: 10
  • Free trial: 30 days
  • Accessibility: Web-based, iOS app, Android app
  • Merchant service fees: 2.9% + $0.25 per transaction

QuickBooks Pricing

Intuit is a seasoned veteran of the accounting software space. It released the first version of QuickBooks back in 1998. A lot has changed in the interim, but it’s still arguably the best small business accounting software on the market. 

QuickBooks is flexible, easy to use, and profoundly scalable. Just about every small business owner will find what he or she needs without much fuss. And the plans scale so well that it’s likely also the best accounting software for a medium-sized business and larger. 

The software’s interface is streamlined and straightforward. It has in-depth reporting so you can keep track of everything, from project profitability to tax write-offs, at a glance. And, it has peerless third-party integration with hundreds of apps available on its marketplace.

Quickbooks has one of the best mobile applications of any accounting software for small businesses. Both the iOS and Android mobile apps allow you all the same control of the web-based version.The only small drawback is a higher price tag than most other options. But if you can afford it, it’s more than worth it. 

QuickBooks also has best-in-class desktop accounting software if you ever want to scale your capabilities.  

Pros Cons
Hundreds of third-party apps  Pricey
Excellent mobile applications Lackluster customer service
Fully customizable reports
Sleek interface

 

 

FreshBooks Review

FreshBooks

BEST FOR

SMBs with a large client base

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  • Rating: 10
  • Free trial: 30 days
  • Price: From $4.50/month
  • Accessibility: Web-based, iOS app, Android app

FreshBooks Pricing

FreshBooks doesn’t have QuickBooks’ legacy, but that’s about the only thing QuickBooks has over it. And despite QuickBooks having more features, FreshBooks is the most popular accounting software for small businesses. Over 24 million users can’t be wrong. 

Even on the most basic plan, FreshBooks has a lot of excellent features. And the best one is the unlimited invoicing. It alone places FreshBooks among the best accounting software for a small business with many clients. On the Lite plan, you can send unlimited invoices to five clients or fewer. You can also track expenses and send unlimited invoices. 

So if you have few active clients, FreshBooks delivers in a big way. However, if you regularly deal with many clients, you’ll want to spring for a more expensive plan. 

Among other standout features are recurring invoices, a client self-service portal, and automated late payment reminders. These features make FreshBooks a contender for the best bookkeeping software for a small business with many clients. 

And as far as integration goes, FreshBooks consistently includes new add-ons to its app store. All the usual suspects are available, such as Shopify, Squarespace, and several payroll add-ons. 

Pros Cons
Good collaboration tools Invoice customization is missing
In-depth client records Underwhelming mobile app
Unlimited invoicing
Proposal and project projections

Xero Review

Xero

BEST FOR

Very small businesses

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  • Rating: 9.8
  • Free trial: 30 days
  • Price: From $9/month
  • Accessibility: Web-based, iOS app, Android app

Xero Pricing

Xero’s product offering is aimed at small to medium enterprises, leaning towards the small end. This is why Xero is probably the best accounting software for a very small business. On their starting plan (Early), you’ll be able to send up to 20 invoices and quotes per month. 

One neat addition is the Hubdoc receipt collection software. With Hubdoc, you can take pictures of receipts and documentation with your phone and automatically turn them into accounting data. 

Plus, Xero has a comprehensive app store with everything you’re likely to need. You can include payroll services with the Gusto add-on for an additional fee. And there are several great CRM and time tracking add-ons when you need to scale your business.

Moreover, Xero has comprehensive integration with Microsoft 365. If you’re looking for Microsoft small business accounting software, sadly, it’s somewhat limited. But Xero is an ideal option if you’re using the Microsoft family of products for your business.

Xero has terrific collaboration tools. It allows unlimited users on every plan, so you can easily assign responsibilities among your team for no extra charge. The only downside is how limited the Early plan is. At only 20 invoices and quotes, the plan is only suitable for the smallest of endeavors. 

Overall, Xero is the top small business accounting software if you want to start slowly and explore your growth potential. 

Pros Cons
Simple project tracking No phone support
Unlimited users on all plans The starter plan is severely limited
Massive third-party add-on selection
Gusto payroll integration

Wave Review

Wave

BEST FOR

Mac users

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  • Rating: 10
  • Free trial: N/A
  • Price: Free
  • Accessibility: Web-based, Android, iOS

Wave isn’t the only small business accounting software that’s free forever, but it’s easily one of the best. It’s especially appealing to sole proprietors since it eschews much of the accounting jargon you’ll find with other options. If you’re unfamiliar with accounting, Wave has an excellent learning center where you can get your bearings. 

In terms of function, there’s little to complain about with Wave. Invoicing, unlimited users, expense tracking, bank, credit card connections—it’s all there. And Wave has easily readable dashboards and reporting, to boot. Plus, Wave’s mobile app has receipt scanning, which is super-useful for freelancers and solopreneurs. Wave accounting software even provides free merchant services with industry-standard transaction fees. 

You also have the option to include paid payroll services. However, this feature is not free. To provide app integration, Wave partners with Zapier. This partnership puts over 2,000 third-party apps at your disposal when you use Wave. 

There are many customer reviews that dub Wave as one of the best small business accounting software for Mac. One drawback of using Wave is how active the developers are. On the surface, this may sound great. But, you’ll find yourself having to re-learn things about the software whenever major updates roll out. 

Pros  Cons
Best small business accounting software for Mac users Support is limited to forums and email
Thousands of third-party apps Mobile apps lack key features
No paid plans
Frequent updates and changes

Zoho Books Review

Zoho Books

BEST FOR

Small businesses with not too many clients

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  • Rating: 9.8
  • Free trial: 14 days
  • Price: From $9/month
  • Accessibility: Web-based, Android, iOS

Zoho Books Pricing

Zoho Books is only one of the many products made by Zoho. But don’t let its lack of focus fool you; Zoho is potentially the best online accounting software for small business owners. 

Zoho Books doesn’t particularly shine in any one area. However, it ranks highly in most functions you’ll need as a small business owner. It’s a simple small business accounting software with good scalability options.

Zoho Books offers comprehensive time tracking as well as project and inventory management. And Zoho introduces new features pretty rapidly, even if most are aimed at the upmarket crowd. 

Their basic plan is not overly generous and limits you to 50 clients and one user. You’ll also be able to connect with an accountant, but that’s the extent of it. So it might not be the best online accounting software for a small business with many clients. 

As far as integrations go, Zoho Books integrates with the most popular payment gateways. However, other integrations are relatively limited. The one area where Zoho Books falls short is payroll. Its payroll integration still hasn’t rolled out across all states, so you may want to pick another option if that’s a deal-breaker.   

Pros Cons
Best online accounting software for small business 5,000-transaction limit on the highest tier
Excellent customer support Payroll services still incomplete
No paid plans
Wide payment gateway compatibility

Kashoo Review

Kashoo

BEST FOR

Those looking for simple accounting software

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  • Rating: 9.9
  • Free trial: 14 days
  • Price: From $16.65/month
  • Accessibility: Web-based, iOS

Kashoo Pricing

Kashoo bills itself as the world’s best accounting software for a small business in terms of simplicity. In the main, that’s a fair assessment. It makes income and expense tracking exceedingly straightforward, effectively making it the best accounting software for a small retail business

It’s transaction forms are particularly attractive, but they’re highly efficient and comprehensive. Efficient to the point that you’ll rarely need to make use of standard reports. 

To prove that it’s the best simple small business accounting software on the market, Kashoo does away with a few details you’ll see with competitors. Records of your clients and suppliers will only have bare-bones information.

Inventory tracking is also pared down to a functional minimum. You can set item descriptions, costs, and associated accounts. But some useful features are missing, such as reorder points, level tracking, etc. 

For payroll services, Kashoo integrates with SurePayroll. SurePayroll is relatively reliable but not the best payroll service on the market. Overall, Kashoo strikes us as the best accounting software for a small consulting business. Or any business without much need for inventory tracking, such as tech startups.

Pros Cons
Unlimited users Subpar inventory tracking
Excellent interface No Android app
Good project tracking
Sales tax tracking features

ZarMoney Review

ZarMoney

BEST FOR

Businesses on a tight budget

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  • Rating: 9.5
  • Free trial: 15 days
  • Price: From $1.99/month
  • Accessibility: Web-based

ZarMoney Pricing

ZarMoney seems to fly under the radar with relatively few users compared to other options on this list. However, its feature set packs a punch that easily makes it worthy of a top 10 accounting software list. 

It offers professional-level invoicing with decent customization, and it is most likely the best accounting software for a small service business. Once you set up your customer database, you can instantly populate invoices with customer data. Bill management is equally straightforward. You can print checks from ZarMoney, establish recurring payments, and track bill status. 

ZarMoney integrates with Stripe, PayPal, and most other major payment gateways. Unique to this list, ZarMoney doesn’t collect charge fees when you get paid, making it a serious contender for the best accounting program for small business projects with a limited budget. 

Moreover, ZarMoney has one of the most affordable price points for solo entrepreneurs. For only $1.99/month, one user has unrestricted access to all of ZarMoney’s features. However, higher tiers start at $14/month, which is relatively pricey. 

However, despite its many great features, ZarMoney has one fatal flaw. It has no mobile applications.

Pros  Cons
Easy setup No mobile app
Fantastic value for solo entrepreneurs
Intuitive control and interface
Great invoice customization

Sunrise by Lendio Review

Sunrise by Lendio

BEST FOR

Interstate commerce

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  • Rating: 9.8
  • Free trial: N/A
  • Price: Free
  • Accessibility: Web-based, iOS, Android

Sunrise by Lendio Pricing

Lendio is a well-known name in the world of small business loans. It’s the best financial software for small business owners with multiple companies. So it came as no surprise when the company acquired an online accounting software and launched it under a new name. 

Everything about Sunrise is tailor-made for small business owners, which is why it’s on our list of the best small business finance software on the market. The advantage of that focus is a simple and basic approach to accounting. The drawback is poor scalability. 

Sunrise’s big selling point is the price, or rather lack thereof. It’s completely free, and no feature is behind paywalls. You can track expenses and income, send invoices, and handle basic bookkeeping. The invoice customization is fair, and you can invite unlimited users to collaborate on your accounts. 

One unique feature Sunrise has is related to interstate tax formats. If you do business across state or county lines, you can create rulesets for each customer to calculate sales tax. This unique feature makes Sunrise the best software for small business accounting if you do a lot of interstate commerce.  

Customer and supplier contact records are reasonably comprehensive. However, you can’t specify what you buy or sell to each contact, something you can do with its direct competitor, Wave. 

If what you need is free and simple accounting software for your small business, Sunrise is a strong choice. Like many others, though, it lacks in-depth project tracking and financial reports.   

Pros Cons
Unlimited users No project tracking
Free Mobile apps need work
Simplified controls and use patterns
Interstate tax functions

Tips to Select the Best Accounting Software for Small Business 

Accounting follows some general rules to make records easier to understand for everyone who needs to. However, it’s a process that’s highly specific to your business. When you bill clients, when you pay suppliers, your budget—all these elements change from one business to the next. 

So when you pick out accounting and bookkeeping software for a small business, pay attention to your individual needs. Getting it right could save you dozens of hours of record-keeping chores every month. What follows is an essential list of elements you should pay attention to when choosing. 

Your Business Needs

What you need from your accounting software can be entirely different from what even a similar business might need. The best accounting software for a small manufacturing business isn’t going to cut it for a real estate entrepreneur and vice versa. 

Think about these questions first:

  • Do you need in-depth inventory management?
  • Do you want to customize your invoices?
  • Will you include payroll services at some point?
  • How closely do you need to track sales?
  • How will you handle your taxes; and are there any unique taxation requirements?

The answers to these and similar questions should give you a better understanding of your accounting needs. When you have an idea of what you need, you can start to compare small business accounting software to meet those needs.

Free Trial

You won’t be sure if accounting software is right for your business until you start using it. That’s why the software provider needs to include a free trial. A 15-day trial is a bare minimum to test out the software’s functionality unless you already know your way around the software. A 30-day trial is much better, and it gives you a standard billing cycle to see how it performs. If you choose software without a trial, make sure it comes highly recommended by someone you trust.  

Scalability

All the options on this list are web-based software. For a small business, a web-based service is probably the best option. Incidentally, small business software works better as a service, in general. The reason for that is that these services tend to scale efficiently. When your business grows, your accounting software should be able to grow with it. This is a common trait of the best cloud accounting software for small business owners. As an added bonus, the latest cybersecurity statistics show your data is safer in the cloud than even on your own data centers.

Typically, you’ll be able to upgrade your plan easily with a SaaS accounting platform. And, if you ever want to move on to something more comprehensive, you can always cancel your account and transfer your data. If you think you’ll use the latter option, make sure the software exports data in a standard format, such as CSV. Some great accounting solutions—such as Open Systems Accounting Software—were left out precisely because they don’t offer a SaaS model. 

Third-Party Integrations

Even a top-rated accounting software for small business can’t do everything you need. Instead, they rely on third-party apps to support their capabilities. Each of the options we reviewed works with a variety of third-party add-ons. Look through the integrations for each option to see if it supports your platforms.  

Additionally, third-party integrations can make your life a lot easier if you already work with some of the integrated services. For instance, eBay integration can make it simple and easy to track your sales in that marketplace. You might also integrate your Shopify store directly with your accounting software to automatically track invoicing and sales. Good accounting software for any small business needs to be able to integrate the platforms that the business already uses. 

Conclusion

These small business accounting software reviews should be enough to make an educated choice. A few big names largely dominate the world of accounting software. QuickBooks, Xero, and FreshBooks are among the biggest. 

You can’t go wrong picking one of those to handle your accounting if you’re ok with paying for quality service. Wave is an excellent free choice if you’re committed to bootstrapping and can’t afford to spend much on accounting. If you’re still in doubt, run your choice of software by your CPA. They’ll tell you if the software has everything your business needs. 

FAQ

What is the easiest accounting software for small business?

Kashoo is the easiest and most basic accounting software for small business users. From setup to operation, Kashoo pares down accounting procedures to a bare minimum. It still retains good functionality across the board. But you won’t be bogged down with esoteric accounting processes. 

What is the best software for small business bookkeeping?

It all depends on the type of business you are running, the number of clients, and whether you need a simple and affordable or a complex and expensive solution. A lot of the brands will claim to be the best around, but actually, it’s just a marketing ploy. That’s why reading reviews of the most popular accounting software might help.

What is the best free accounting software for small business?

The two main free choices are Sunrise and Wave. Despite a good effort by Sunrise, Wave comes out on top.  You’ll still get decent customization with Wave, but it focuses on providing a simple experience even for novice users. If you can get through the initial setup correctly, the software practically runs itself.

What is the simplest accounting software?

The software that most emphasizes UX is also the one that’s been around the longest—QuickBooks. QuickBooks is not only ultra-simple to use, but it’s also our choice for the best accounting software for small business owners. Regardless of who you are or what stage of growth your business is in, you can’t go wrong with QuickBooks.