What Is Good Accounting Software For Small Businesses?

What Is Good Accounting Software For Small Businesses

Accounting software is advantageous for small business owners because it allows them to handle accounts receivable and accounts payable, understand their profitability, and be ready for tax season. A small firm in the field of accounting software is one that can utilize out-of-the-box software without considerable adaptations. As a company expands, its accounting demands become increasingly complicated, and a customized enterprise resource planning (ERP) system is frequently required.

There are a variety of accounting software options for small firms, each with distinct features and costs. In general, the kind of industry and number of employees are two aspects that might assist a small business owner in selecting suitable accounting software. For instance, a freelancer would not require the same accounting software functionality as a restaurant owner.

The 5 Best Accounting Software for Small Business of 2022

QuickBooks Online

QuickBooks Online is the most comprehensive accounting software evaluated for small businesses. Not only do the bulk of accounting professionals for small businesses utilize QuickBooks Online, but there are also countless online training materials and support forums.

All accounting elements are accessible from a central dashboard, making accounting more fluid and efficient.

Pros and Cons

Pros

  • Scalable
  • Utilized often by accounting professions
  • Compatibility with third-party software
  • Cloud-based Mobile application

Cons

  • Required upgrade for additional users
  • Occasional synchronization issues involving banks and credit cards

Xero 

Xero is the best accounting software in our study for micro businesses seeking very easy accounting software. This program features a streamlined user interface and interacts seamlessly with a third-party payroll provider. Xero’s connection with Stripe and GoCardless enables businesses to take payments from clients online.

Pros and Cons

Pros

  • Cloud-based mobile app advantages
  • Integrating payroll with the Gusto third-party app market
  • Simple inventory control

Cons

  • Limitations in reporting
  • Charges assessed for ACH transactions Limited customer service

FreshBooks

Invoicing is the most important accounting requirement for most service-based firms. FreshBooks provides greater customization options for invoices than other accounting software. Its major job is to send, receive, print, and pay invoices, but it can also do basic accounting tasks. This accounting software makes it simpler for service-based firms to issue proposals and invoices, manage project time, and collect payments.

Pros and Cons

Pros

  • Cloud-based intuitive interface
  • Integration of third-party applications
  • Affordable
  • Advanced billing capabilities

Cons

  • The mobile app has restrictions

QuickBooks Self-Employed

QuickBooks Self-Employed accounting software is our top recommendation for part-time freelancers and independent contractors who wish to manage their income and spending primarily for their tax returns. This program is intended for business owners who file a Schedule C with their individual tax returns.

Without this type of software, freelancers would have to sift through all of their bank and credit card records at the end of each year to calculate their revenue and spending, which can be a demanding task. QuickBooks Self-Employed will automatically total all business transactions.

Pros and Cons

Pros

  • Cloud-based mobile app advantages
  • Monitor mileage
  • Distinguish between business and personal expenditures
  • synchronizes with TurboTax

Cons

  • Data cannot be moved easily to other accounting software 
  • Limited reporting capabilities

Wave 

Wave is the best accounting software platform for a small service-based firm that delivers straightforward invoices and does not need to process payroll. Wave’s free features will satisfy the accounting demands of many freelancers and service-based enterprises, making it the best free software in our assessment. At the end of the year, accountants may retrieve the essential Wave reports to compile a business’ tax return.

Pros and Cons

Pros

  • Accounting, billing, and receipt scanning at no cost
  • There is no transaction or billing cap
  • Manage several companies from a single account
  • Unlimited user capacity
  • Mobile app

Cons

  • Integrations only via Zapier
  • Increased costs for credit card and ACH transactions
  • Full-service payroll is only available in 14 states.

To choose the most effective accounting software for small businesses, we considered a number of aspects. First, we evaluated the features offered by each program and how they assist small companies. Next, we compared each software’s price to determine which was most inexpensive for small enterprises. Finally, we assessed the software’s usability and customer service. We also examined real customer reviews to check that the company’s marketing claims align with actual consumer experiences.

Now you should learn what is the best CRM software for small businesses, read our article. 

Follow
Gena Jones
Gena Jones ensures the work that everyone in the company is putting is of good quality and won't be compromised.