Best Accounting Software

Why does your business need accounting software?

In addition to maintaining the corporate veil by separating your personal and business finances, there are some other reasons why it’s a good idea to have reputable business accounting software. These programs can make taxation and payroll significantly easier processes, as you’ll have all of the information you need ready to go whenever it’s time to tackle these tasks.

What can business accounting software do for your company? For starters, it helps you with expense tracking and tax season preparation. In addition, accounting software can assist you in setting reasonable expectations for the growth of your business. It can also provide custom reports that identify which parts of your business provide the best return on investment.

Last, but not least, using accounting software can help you prepare reports for investors. When you have clear and concise financial data at your fingertips, it’s easy for potential investors to get a snapshot of your business activities and decide if they want to invest in your business or not.

But what makes an accounting software product worth using? How much should you expect to pay? We’ll answer these questions and many more as we dig into the details of these companies.

ZenBusiness Money: Best Overall Accounting Software

Pros:

• First month free
• Custom invoicing
• Accept and manage client payments
• Revenue and expense tracking tools
• Deduction tagging and tax prep
• Plaid integrations

Cons:

• Limited integrations
• Not as scalable as some alternatives

With a price point of $30/month (and a free first month), ZenBusiness Money presents fully featured accounting software at a more reasonable rate than many competitors. For example, QuickBooks online starts at $30/month and goes up to $200/month, depending on your chosen options.

With ZenBusiness Money, you can create and send custom invoices, and accept and manage online payments and client accounts. We include handy accounting tools to track revenue and expenses, and you can also tag tax deductions as you go. You’ll also have access to a suite of tax tools to make every business owner’s least-favorite time of year go much more smoothly.

We include reports and insights to help you discover inefficiencies in your business, and you can even track mileage for travel. All told, it’s an impressive collection of features for one low price point. In our opinion, it would be tough to top what ZenBusiness Money has to offer in this price range.

Zoho Books: Best for Small Businesses with Expansion Plans

Pros:

• A free accounting solution
• Employee benefit tools
• Intuitive user interface
• Automated workflows in free version

Cons:

• Not many integrations
• Limited users

Zoho Books is one of just a few companies offering fully featured accounting software at no charge, and it’s an option for small startups that have expansion plans someday down the road. Zoho Books has one free tier and five paid tiers ($15, $40, $60, $120, or $140 per month), ensuring that this company can grow with your business and you won’t have to switch providers as your business expands.

One of the claims to fame for Zoho Books is how easy-to-use its software is. There’s not much of a learning curve involved with using Zoho Books for your accounting software. It offers automated workflows and custom fields, two welcome features for any accounting software solution.

While Zoho Books includes several integration options with its paid packages, there aren’t many integrations available in the free version. However, we’re less understanding of the way Zoho Books limits businesses to so few users — even the $60/month plan only supports up to ten users.

Overall, if you’re looking for a free accounting software option that includes a paid platform to facilitate business growth, Zoho Books could be an option.

Wave: Best for Businesses with Limited Accounting Needs

Pros:

• Accounting platform is free
• Unlimited users
• Sales tax tracking

Cons:

• No upgrade options
• No live customer support
• Not many reports available

If you don’t have extensive needs for accounting and only need the basics here and there, Wave can be an option. That’s because this company provides its accounting software free of charge.

With Wave, you’ll receive free income and expense tracking, sales tax tracking, and unlimited users. There are paid accounting programs that don’t include all of these features, so Wave is off to a good start in this respect. For example, if having multiple users is a big deal for you, Wave is a good choice over Zoho Books due to the latter’s restriction of users.

However, there are some downsides as well. Wave isn’t a great choice for businesses with expansion plans, as it doesn’t offer paid tiers to upgrade to. That means you’re stuck with its less-desirable aspects, including foreign transaction fees and a limited supply of reporting capabilities. Furthermore, the lack of live customer support can be a problem if you encounter any trouble.

Wave truly is free for people who don’t use the payment processing application. If you’re curious, here are the pricing breakdowns for that aspect of Wave:

• 2.9% + 30 cents for credit card transactions
• 3.4% + 30 cents for AmEx
• 1% for bank payments

Xero: Best for Collaborative Accounting

Pros:

• Unlimited users
• Many reporting options at all subscription levels
• Inventory management service

Cons:

• Entry-level plan limited to 5 bills and 20 invoices per month
• Mediocre customer support

Xero is another solid option if you need multiple users. If Wave sounded a bit too basic to you, but you like the idea of unlimited users at no extra charge, Xero could be a good fit.

With Xero, you’ll get access to an inventory management tool and thorough reporting capabilities — for all subscribers, not just those to its upper-tier plans. In addition, Xero provides automated bill and receipt capture for all users.

Where do the negatives come into the equation? One befuddling aspect of Xero is the fact that you can’t ever call them for any reason. Xero has no phone number and requires you to schedule support in advance via four-hour windows, which could be a dealbreaker for some busy entrepreneurs. Additionally, Xero’s $13 per month base plan limits users to five bills and 20 invoices per month, well below the levels needed by many small businesses.

If you don’t have many invoicing needs, or you’re willing to upgrade to Xero’s $37 monthly plan, we think their accounting software can be a solid choice.

QuickBooks Self-Employed: Best for Freelancers

Pros:

• Tracks both personal and business expenses
• Mileage tracker included
• TurboTax and other Intuit integrations

Cons:

• Limited reporting and invoicing
• Not many other integrations
• Can’t scale with growing businesses

QuickBooks Self-Employed includes a mileage tracker that significantly simplifies this aspect of a freelancer’s expenses. You’ll also find that this product allows you to track both personal and business expenses, a rare find in business accounting software.

Seeing as they’re both Intuit products, QuickBooks Self-Employed integrates seamlessly with TurboTax. However, there aren’t very many other non-Intuit integrations available. Additionally, QuickBooks Self-Employed has limited reporting and invoicing functions.

All told, QuickBooks Self-Employed is an option for freelancers, contractors, and single-person LLCs. If you need more robust features but everything else about QuickBooks Self-Employed sounds good, you might want to check out one of their other products (more on this shortly…).

FreshBooks: Best for Well-Rounded Service

Pros:

• Unlimited estimates
• Payment processing available
• Generous welcome bonus
• Intuitive interface

Cons:

• No double-entry accounting in entry-level plan
• Entry-level plan limited to five invoices/month
• No tax support

FreshBooks often has generous sign-up bonuses, as they’re currently offering 50% off for six months if you’re willing to make a 12-month commitment. We also think that FreshBooks is an easy-to-use option, as there’s hardly any learning curve to using it, even when it comes to some of the more advanced features.

FreshBooks includes unlimited estimates at all subscription levels, although the entry-level plan is limited to a prohibitive five invoices per month. Another significant limitation of that $17/month level is the fact that it doesn’t offer double-entry accounting.

However, no matter the limitations, we feel the need to reiterate how simple the FreshBooks interface is. When some competitors offer products that can take some time to learn and knowledge to master, FreshBooks’ ease of use is appreciated.

QuickBooks Online: Best for Advanced Features

Pros:

• More experience and customers than any competitor
• Hundreds of integrations
• Advanced reporting functions
• Mileage tracker

Cons:

• Interface can be confusing/overwhelming for new users
• Can get highly expensive

QuickBooks Online is the biggest name in the accounting software industry. QuickBooks has been around for longer and served more customers than the competition, and it also offers fully featured accounting software.

One of the biggest calling cards of QuickBooks Online is its hundreds of integrations with popular apps. Additionally, QuickBooks Online also delivers a wide variety of data reports. It also includes a mileage tracker at all subscription levels and a time tracker in the $55 per month plan and above.

QuickBooks’ ease of use leaves a bit to be desired, and its pricing is admittedly pretty high. But if you need its advanced features, it could be worth considering.

In Conclusion

We hope we accomplished our goal of providing a wide range of accounting software solutions that can suit any entrepreneur’s needs. No matter the size, type, or size of your business, we strongly recommend acquiring reputable accounting software to keep your records in order. It can be just as helpful to your day-to-day operations as a registered agent service.

Even for single-person businesses, accounting software has significant value because it helps develop the separation of business and personal assets that’s so vital to maintaining the corporate veil. For multi-member businesses with employees, an accounting system is something you simply can’t operate without.