Accounting is a part and parcel of every business and it is vital to have a strong accounting team to take care of all your finances. Most medium and large-sized companies hire accountants to track all their financial data and figures. However, for many small businesses, startups, and freelancers, hiring accountants or forming an accounting team is not feasible. So, how can they manage their finances? Well, the best option is to look for suitable accounting software for small businesses.
Read on to find out what accounting software is, some of its key features, and a detailed description of the top 10 accounting software for small businesses in 2021.
Table of Contents
What is an Accounting Software?
Accounting software can be described as a platform that is equipped with all the necessary tools and techniques to record and process all the accounting transactions within an organization. These accounting transactions include general ledger, payroll, accounts payable, accounts receivable, etc. Ideally used by bookkeepers and accounting professionals, accounting software helps businesses to automate and manage their financial functions. With this software, organizations can eliminate all the manual bookkeeping functions and rely on robust software to track their financial functions.
Key features of an Accounting Software
Some of the key features of accounting software are:
- Intuitive dashboard
- Bank feed
- Online invoicing
- Financial reporting
- Automatic payment reminders
- Bank reconciliation
- Mobile apps
- Integrations
- Project-based billing
- Inventory management
Top 10 Accounting Software for Small Businesses
Today, small businesses have the option to choose from an extensive list of accounting software which also includes free small business accounting software. To make it easier for you, we have curated this list of the 10 best accounting software that can be used by small businesses.
1. Freshbooks
Invoicing is an integral part of every business and Freshbooks is considered one of the best accounting software to take care of all your invoicing needs. It is a cloud-based software that performs key invoicing functions, such as sending, receiving, printing, paying, etc. It also includes various other features which are useful for small businesses to manage and track their finances. You can take advantage of the time tracking feature to generate your invoices in a timely manner, access your accounting processes from anywhere and at any time through their mobile app, customize your invoices as per your business requirements, and perform several other functionalities.
Features
Some of the key features of Freshbooks are:
- Accounts payable
- Accounts receivable
- General ledger
- Payroll
- Bank reconciliation
- CPA Firms
- Tax management
- Expense tracking
- Collections
- Cash management
- Billing and Invoicing
- Fixed asset management
- Customizable invoices
- Tax calculation
- Time tracking
- Financial reporting
Pros
- Freshbooks has a very user-friendly interface with advanced invoicing features.
Cons
- Compared to some of the other accounting software for small businesses, Freshbooks is more expensive.
Pricing Plan
- Lite – $6 per month
- Plus – $10 per month
- Premium – $20 per month
- Select – Custom pricing
2. Quickbooks
Quickbooks is one of the most popular and user friendly accounting software for small businesses which is why it is not surprising to see the majority of the startups and small businesses opt for this feature-rich accounting software. Quickbooks is cloud-based and can be accessed via web browsers and mobile apps. It offers an intuitive dashboard that allows the users to access all their necessary accounting features from one central location. It is a scalable software with features like generating cash flow reports, creating invoices, etc.
Features
Some of the key features of Quickbooks are:
- Accounts payable
- Accounts receivable
- Billing and invoicing
- Expense tracking
- Spend management
- Cash management
- Payroll
- Revenue recognition
- CPA Firms
- General ledger
- Bank reconciliations
- Collections
- Fraud detection
- Tax calculation
- Tax management
- Fixed asset management
Pros
- Quickbooks offers direct integration with bank accounts.
Cons
- Limited flexibility in designing invoice formats.
Pricing Plan
- Simple Start – $25 per month
- Essentials – $50 per month
- Plus – $80 per month
- Advanced – $180 per month
- Self employed – $15 per month
3. Zoho Books
If you are looking for an ideal accounting software for small business that provides the best automation features, then Zoho Books is your best bet! You can use this software to automate most of your manual bookkeeping tasks and use your time for productive activities. From setting automatic payment reminders to creating recurring expense profiles to managing 1099 contractors, you can do a lot with Zoho Books. This simple yet effective software offers all the basic features that are required in accounting software. This free small business accounting software is part of the Zoho suite which means that you easily integrate it with other Zoho products.
Features
Some of the key features of Zoho Books include:
- Billing and Invoicing
- CPA Firms
- Accounts payable
- Accounts receivable
- Tax management
- Cash management
- Expense tracking
- Spend management
- Bank reconciliations
- Collections
- Multi-currency
- General ledger
- Fixed asset management
Pros
- Zoho Books is an easy-to-use software which can be used even by amateur people with less or no accounting knowledge.
Cons
- Zoho Books does not allow users to import contacts from their social media sites.
Pricing Plan
- Freemium
- Standard – $15/month/billed annually
- Professional – $40/month/billed annually
- Premium – $60/month/billed annually
4. Xero
Xero is considered one of the best overall accounting software for small businesses. This software is known for its robust features and affordably priced plans and is ideal for those who prefer to conduct their business on the go. From sending custom invoices to tracking inventory to creating purchase orders to performing a wide range of other accounting functionalities – you can perform all these easily via your mobile or tablet. This is an effective tool that also offers reports and statements in real-time; thus, enabling better tracking and monitoring of your financial functions.
Features
Some of the key features offered by Xero include:
- Accounts payable
- Accounts receivable
- CPA Firms
- Billing and Invoicing
- General ledger
- Expense tracking
- Payroll
- Revenue recognition
- Collections
- Bank reconciliations
- Tax management
- Multi-currency
- Fixed asset management
- Cash management
- Automated quoting
- Budgeting
- Time tracking
- Customizable invoices
- Fraud detection
- Project management
- Reporting/Analytics
Pros
- Compared to some of the other accounting software for small businesses, Xero is much more affordable and offers a wider range of features.
Cons
- There are several glitches encountered with the bank feed.
Pricing Plan
- Early – $11 per month
- Growing – $32 per month
- Established – $62 per month
5. Kashoo
Small businesses looking for simple accounting solutions can opt for Kashoo. This software offers a wide range of powerful accounting features and functionalities at reasonable prices. It is simple and effective accounting software that is equipped with all the required accounting software features. You can access Kashoo via desktop, tablet, and mobile. It is a very straightforward platform that also provides automation features that helps businesses to save a lot of time and effort.
Features
Some of the key features of Kashoo include:
- Accounts payable
- Accounts receivable
- General ledger
- CPA Firms
- Payroll
- Fixed asset management
- Project accounting
- Expense tracking
- Multi-currency
- Cash management
- Tax management
- Collections
- Bank reconciliations
- Budgeting
- Tax calculation
- Financial reporting
- Revenue recognition
Pros
- Kashoo is a great and easy-to-use accounting software, especially for those who do not have any accounting background.
Cons
- Users often face issues with bank feeds while using Kashoo.
Pricing Plan
- Kashoo – $30 per month
6. Sage Business Cloud Accounting
Sage Business Cloud Accounting is effective and affordable accounting software for freelancers, startups, and small businesses. You can use this software to perform various accounting functionalities, such as creating and sending invoices, automating back reconcile entries, tracking payments, etc. This software is equipped with machine learning technology that helps businesses to reduce their manual work and rely on intelligent category selections. You can also take advantage of the mobile app to always stay connected and on top of your financial transactions.
Features
Some of the key features of Sage Business Cloud Accounting are:
- Accounts payable
- Accounts receivable
- Cash management
- Expense tracking
- Payroll
- Collections
- Bank reconciliations
- General ledger
- CPA Firms
- Billing and Invoicing
- Fixed asset management
- Customizable invoices
Pros
- Sage Business Cloud Accounting is easy to set up and can be accessed from anywhere and at any time.
Cons
- The reporting options are limited in this accounting software.
Pricing Plan
- Accounting Start – $10 per month
- Accounting – $7.50 per month
7. Bill.com
The next software in our list of top 10 accounting software for small businesses is Bill.com. This is an advanced bill payment solution that enables small-sized businesses to manage their financial operations smoothly and effectively. You can use this software to automate various tasks and save your time and efforts by eliminating unnecessary manual work. With Bill.com, you do not have to worry about the security of your data as it uses industry-standard Transport Layer Security (TLS). This is also cloud-based software which means that you can access the platform at any time and from anywhere.
Features
Some of the key features of Bill.com include:
- Accounts payable
- Accounts receivable
- Billing and Invoicing
- General ledger
- Cash management
- CPA Firms
- Expense tracking
- Multi-currency
- Tax management
- Fixed asset management
- Collections
- Revenue recognition
- Bank reconciliations
- Data security
- Customizable invoices
Pros
- Bills.com makes it extremely easy for small sized companies to process their accounts payable and pay all their bills with just a couple of clicks.
Cons
- Bills.com rolled out a new interface which is not very user-friendly and also the platform has become quite slow due to the implementation of new features.
Pricing Plan
- Essentials – $39/user/month
- Team – $49/user/month
- Corporate – $69/user/month
- Enterprise – Custom pricing
8. Wave
Wave is an ideal accounting software option for freelancers and service-based small businesses. It is one of the best free accounting software for small businesses as it offers a wide range of accounting features free of cost. It also offers a very user-friendly dashboard which ensures that the users can use the tool as efficiently and effectively as possible. You can link your bank accounts, manage your transactions and invoices, track your expenses, use one single account to run multiple businesses, and perform various other financial functions.
Features
Some of the key features of Wave are:
- Accounts payable
- Accounts receivable
- Cash management
- Billing and Invoicing
- General Ledger
- CPA Firms
- Tax management
- Fixed asset management
- Collections
- Revenue recognition
- Payroll
- Bank reconciliations
- Expense tracking
- Multi-currency
- Spend management
- Budgeting
Pros
- One of the major advantages of Wave is that it is a forever free software which makes it ideal for freelancers, startups, and small businesses.
Cons
- The reporting feature offered by Wave needs to be more robust.
Pricing Plan
- Freemium
9. FreeAgent
FreeAgent is another popular and affordable accounting software for small businesses. Similar to the other accounting software listed here, FreeAgent is also equipped with all the required features which can help bookkeepers and accountants to effectively manage all their financial functions. You can use this software to link your bank accounts, send invoices, set up payment reminders, track expenses, etc. New users can take advantage of the free plan offered by FreeAgent to understand how the software works and whether or not it is beneficial for them before investing in the paid plans.
Features
Some of the key features of FreeAgent include:
- Accounts payable
- Accounts receivable
- Spend management
- Payroll
- Collections
- Fixed asset management
- Bank reconciliations
- Multi-currency
- Cash management
- General ledger
- CPA Firms
- Tax management
- Billing and invoicing
- Expense tracking
- Customizable invoices
- Forecasting
Pros
- FreeAgent sends out a Monday Motivator email which contains a summary of your agenda for the week and includes details regarding unbilled hours logged, pending bills, etc.
Cons
- Exporting data can sometimes be tricky and require some manual effort.
Pricing Plan
- Limited Company
- Monthly – £14.50/month + VAT
- Annual – £145/year + VAT
- Partnerships & LLP
- Monthly – £12/month + VAT
- Annual – £120/year + VAT
- Sole Trader
- Monthly – £9.50/month + VAT
- Manual – £95/year + VAT
10. OneUp
OneUp is an all-in-one accounting software that has been designed to help small businesses effectively manage their finance functions. This multi-functional software includes the functionalities of accounting software, CRM software, inventory management software, and billing and invoicing software. You can use OneUp to create, customize, and send your invoices, track your expenses, monitor your inventory levels, and more – all with just one click. The software is compatible with desktops as well as mobile devices.
Features
Some of the key features of OneUp are:
- Accounts payable
- Accounts receivable
- General ledger
- Expense tracking
- Multi-currency
- Tax management
- Cash management
- Billing and Invoicing
- Collections
- Bank reconciliations
- Purchasing
Pros
- One of the major advantages of OneUp is that it is a multi-functional software which means that businesses can access a wide range of functions from one single platform.
Cons
- There are some key features missing in the software, such as time tracking, payroll, integrations, etc.
Pricing Plan
- Self – $9 per month
- Pro – $19 per month
- Plus – $29 per month
- Team – $69 per month
- Unlimited – $169 per month
Conclusion
So, here was our comprehensive list of the top 10 accounting software for small businesses. We recommend that you go through each of the software listed here in detail and choose the one that best matches your business requirements.
You can check out SaaSworthy for more such useful software.
Also read:
