Finding the right small business bookkeeping software is crucial for business owners who want to track their finances and make informed business decisions. In this article, we’ll explore the benefits of using bookkeeping software for your small business and provide recommendations for the best software options available.
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Best Small Business Bookkeeping Software for 2024
1. QuickBooks Online
Best Overall Small Business Bookkeeping Software
QuickBooks Online is our top pick for small business bookkeeping software because it offers everything a small business owner needs to manage their finances. With its user-friendly interface and cloud-based technology, QuickBooks Online allows you to access your financial data from anywhere, at any time. It also offers a wide range of features, including invoicing, expense tracking, bank reconciliation, and payroll management.
Pricing:
There are four pricing tiers and users receive a 50% off discount for the first three months. The lowest tier starts at $15 a month for the first three months, and this level includes all of the basics needed for small business accounting. Additional tiers offer functionality for bill management, inventory management, workflow automation, and more.
Read more in our QuickBooks Online Review.
QuickBooks Online Pros & Cons
Pros:
- Offers a wide range of features, including invoicing, expense tracking, bank reconciliation, and payroll management.
- User-friendly interface and cloud-base technology allow you to access your financial data from anywhere at any time.
- Integrates with other apps and services, such as Shopify, ,PayPal, and TSheets.
- Offers a mobile app for iOS and Android devices.
Cons:
- Higher cost compared to other small business bookkeeping software options.
- Limited customizability in terms of reporting and invoice design.
2. FreshBooks
Best Small Business Bookkeeping Software for Invoicing
If you’re looking for a bookkeeping software that specializes in invoicing, FreshBooks is the perfect choice. It’s one of our top picks for freelancers and independent contractors because FreshBooks allows you to create and send professional-looking invoices in minutes, You can even set up automatic payment reminders to ensure you get paid on time. It also offers features such as time tracking, expense management, and project management.
PricingFreshBooks offers a 30-day free trial, and there are four pricing tiers, starting at $17 per month. You can choose a plan that matches the complexity of your business. Like we said, FreshBook is a solid choice for freelancers, and the introductory plan, Lite, is built with self-employed people in mind. Pricing goes up to $55+ a month, with custom pricing at the highest level.
Read more in our FreshBooks Review.
FreshBooks Pros & Cons
Pros
- Offers specialized invoicing features, including the ability to create and send professional invoices in minutes.
- Allows you to set up automatic payment reminders to ensure you get paid on time.
- Offers time tracking, expense management, and project management features.
- User-friendly interface and intuitive navigation.
Cons
- Limited features compared to other small business bookkeeping software options.
- Higher cost compared to other invoicing software options.
3. Xero
Best Small Business Bookkeeping Software for Collaboration
Xero is an excellent choice for small businesses that work with multiple team members and need to collaborate on financial data. Xero allows you to give different levels of access to team members, such as accountants or bookkeepers, so they can work together on the same data in real-time. It also offers features such as bank reconciliation, invoicing, and expense tracking.
PricingLike others on this list, Xero offers tiered pricing, starting at $13 per month. The entry level plan has invoicing limits, but there are still robust reporting tools. Higher level plans, ranging from $37 to $70 per month, increase your functionality with unlimited invoicing, bulk transaction reconciliation, project tracking tools, and advanced analytics for predicting future cash flow.
Xero Pros & Cons
Pros
- Allows multiple team members to collaborate on financial data in real-time.
- Offers features such as bank reconciliation, invoicing, and expense tracking.
- Offers a mobile app for iOS and Android devices.
- Integrates with over 800 third-party apps and services.
Cons
- Higher cost compared to other small business bookkeeping software options.
- Limited customizability in terms of invoice design.
4. Zoho Books
Best Small Business Bookkeeping Software for Automation
Zoho Books is an excellent choice for small businesses that want to automate their bookkeeping tasks.. It offers features such as automatic bank feeds, recurring invoices, and payment reminders, which help save you time and reduce errors. Zoho Books also integrates with other Zoho apps, such as Zoho CRM and Zoho Inventory, making it an ideal choice if you’re using other Zoho applications.
PricingWith a total of six pricing options, Zoho tries to create a plan for all types of business owners. The introductory plan is free and only available for businesses with less than $50,000 in revenue. The next plan is $20 a month and increases the number of users, offering project tracking features, workflow rules, and higher customization overall. All plans come with a steep discount when you purchase a year.
Zoho Books Pros & Cons
Pros
- Offers features such as automatic bank feeds, recurring invoices, and payment reminders.
- Integrates with other Zoho apps, such as Zoho CRM and Zoho Inventory.
- User-friendly interface and easy setup process.
- Offers a mobile app for iOS and Android devices.
Cons
- Limited customer support compared to other small business bookkeeping software options.
- Limited third-party integrations.
- Higher cost compared to other automation software options.
5. Wave
Best Free Small Business Bookkeeping Software
If you’re on a tight budget, Wave is an excellent choice for free bookkeeping software, and it’s truly geared for self-employed entrepreneurs and micro businesses. Wave is essentially two pieces of software that you can toggle between on your dashboard: Wave accounting and Wave Invoicing. Wave also has a user-friendly interface and allows you to connect your bank account to automatically import transactions.
PricingAs we said, Wave is free for both the accounting and invoicing software. Both offer unlimited invoice and expense tracking as well as unlimited invoicing. You can set up payment reminders, export basic reports, accept online credit card and bank payments with Wave Payments (fees apply), and more.
Wave Pros & Cons
Pros
- Free to use.
- Access to unlimited invoicing and customizable templates and payment terms.
- Strong mobile app for on-the-go access.
- Offers unlimited users with varying permissions.
Cons
- Phone support costs extra, and live chat support is only available with paid services, like Wave Payments and Payroll.
- Doesn’t offer third-party integrations or plans to enhance functionality.
Why Use Small Business Bookkeeping Software?
If you’ve been relying on spreadsheets, here are a few excellent reasons to start using bookkeeping software:
- Streamline your bookkeeping: Bookkeeping software can help automate tedious and time-consuming tasks, such as data entry, bank reconciliation, and financial report generation. This frees up your time to focus on other essential aspects of running your business.
- Save money: By automating bookkeeping tasks, you can save money on bookkeeping fees, tax preparation fees, and other accounting costs. Plus, by keeping accurate financial records, you can avoid costly mistakes that could lead to penalties or fines.
- Make better business decisions: With real-time access to your financial data, you can make informed decisions about your business’s finances. You can track your income and expenses, monitor your cash flow, and identify areas where you can cut costs or increase revenue.
- Improve accuracy: Manual bookkeeping is prone to errors, which can lead to inaccurate financial statements and tax filings. Bookkeeping software can help minimize errors by automating data entry, reconciling bank accounts, and generating financial reports.
How to Choose the Best Small Business Bookkeeping Software for Your Business
We’ve just covered our top picks for bookkeeping software, but there are even more options out there. So when reviewing your choice, consider the following factors:
- Budget: Determine how much you can afford to spend on bookkeeping software. Some options are free, while others can be quite costly.
- Features: Consider which features are essential for your business. Do you need invoicing and payment processing, or do you require more advanced features such as payroll and inventory management?
- Ease of use: Choose a bookkeeping software that is user-friendly and easy to learn. Consider whether the software offers training or support resources.
- Scalability: Choose a software option that can grow with your business. Consider whether the software can handle a growing number of transactions and users. Remember that most software offers plans that increase functionality as your business grows, so consider what growth will look like and how it will stand with your business over time.
Final Word on Best Small Business Bookkeeping Software
Small business bookkeeping software can simplify your finances, save you time and money, and help you make better decisions. When choosing the right bookkeeping software for your business, consider your specific needs and budget to choose the best option for your business. With the right software in place, small businesses can streamline their accounting process and focus on growing their business.
FAQs
Absolutely! QuickBooks is an excellent choice for small businesses looking to manage their finances effectively. As a trusted and reliable accounting software, QuickBooks offers a range of features that can help you streamline your business operations and stay on top of your finances.
Definitely! Small business owners often wear many hats, including that of a bookkeeper. While it can be time consuming, handling your own bookkeeping can save you money and give you a better understanding of your business’s financial health.