If you run a business, one of the first applications you need to buy and set up is accounting software.
You need to choose an application that’s reliable, accurate, and easy to use since you will be using it a lot to keep track of your income, expenses, receivables, assets, and liabilities. You will also need to generate regular reports so you can track how your business is doing.
Most accounting software nowadays is cloud-based. This means you don’t need lots of storage space and advanced computers. In addition, the existence of mobile apps means you can look at your business’s financial health any time, even when you’re on vacation.
Not all accounting applications are alike. Some of them have special features that make them ideal for certain platforms, like Mac OS. Others offer just basic features that make them popular for businesses on a shoestring budget.
Before we discuss these applications in detail, here is an overview. We’ll start with our favorite tool.
| Software | Starting Price | What We Like About It | What We Don’t Like About It |
| QuickBooks | $10 per month. | Widely used; built-in reporting; wide range of integrations. | Inflexible subscriptions; no mileage tracking in cheaper plans. |
| Wave | Free. | It’s free and offers more features than some paid alternatives. | Can’t track billable hours, inventory or BOs; no fixed asset management tools. |
| Xero | $9 per month. | Easy registration; intuitive UI; mobile app; you can export to QuickBooks. | Invoices aren’t very customizable; not widely used by accountants. |
| FreshBooks | $15 per month. | Customizable invoices; fast payments; multiple languages and currencies. | No inventory management; limited mobile app. |
| Zoho Books | $9 per month. | Easy to use; customizable invoices; project management and time tracking functions. | No payroll tools; limited to preparing 1099s for independent contractors. |
Here are the best accounting software for businesses, and the users they’re right for.
Best Free Accounting Software: Wave
If you’re running a small, one-person business or are doing freelance work, you probably won’t need all the bells and whistles that come with most paid accounting software.
Wave Financial, now part of H&R Block, offers free, cloud-based accounting applications that have an extensive set of capabilities.
Signing up for Wave Accounting is very easy. Creating an account just takes seconds, and if you already have a Google or Yahoo account, Wave will set up an account for you.
Once you’re in, you are asked to input your business name and type, contact information, and other details that will appear on your invoices. The user interface is simple and clutter-free.
A sidebar menu has different, easy-to-understand headings that divide the features into core functions.
These include Sales, Purchases, Accounting, Banking, Payroll, and Reports. The main part of the screen displays a dashboard that shows you snapshots of your cash flow, bank and credit accounts, and payable and receivables.
Wave also provides many of the features that small business owners look for in accounting software:
- Bank feed – Wave securely connects to banks, credit cards, and online payment channels like PayPal to help you keep track of deposits, payments, and other financial data in real-time.
- Invoicing – Wave helps business owners save time by offering invoicing tools such as recurring billing, automatic payment reminders, and quote-to-invoice conversion.
- Mobile app – Wave has mobile apps available for iOS and Android devices. There are two downloadable apps specifically for receipts and invoices. Wave Receipts uses OCR technology to convert photos of receipts into expense transactions, while Wave Invoices allows you to create and keep track of invoices and accept payments.
Because Wave is cloud-based, it automatically backs up your data securely. If your phone or computer gets lost or stolen, you don’t have to worry about losing your financial information.
Best Accounting Software for Mac Users: Xero
Many businesses are starting to replace their Windows machines with computers running Mac OS. However, many Mac users complain that a lot of accounting software for Mac OS doesn’t have the same features as their Windows-based counterparts.
While this is mostly true, Xero offers most of the features of Windows accounting software at competitive prices.
The registration process for Xero is quick and straightforward. As soon as you log in, a clean, intuitive interface greets you.
Navigating the screen is easy thanks to dropdown menus, while the dashboard shows outstanding bills, pending tasks, bank and card balances, and other information.
You can move these widgets around the dashboard and clicking on them brings you to other parts of the application.
Xero offers a lot of functions that many Mac OS accounting applications don’t have on top of the standard accounting features. These include:
- Inventory management – Xero can track how many products you have in stock, helping you identify your best selling items. You can also create and send purchase orders directly from Xero and use the data to generate bills and invoices.
- Invoicing – Xero allows you to create and send electronic invoices with buttons that let your customers pay online with just one click. It can convert estimates or quotes directly into invoices. You can also set up schedules to send recurring invoices and payment reminders to customers.
- Bank reconciliation – Connecting your bank accounts to Xero is a breeze. Once you connect your accounts, Xero automatically imports the transactions related to them. This is particularly useful for reconciling transactions in bulk based on rules that you specify.
- Mobile app – The Xero Accounting & Invoices app, available for iOS devices, gives you a real-time snapshot of your cash flow, lets you create invoices, and track your ongoing projects.
Xero is a relatively powerful accounting software that comes in handy for Mac users. It offers a feature-rich accounting experience wrapped in a clean, intuitive user interface.
Best Accounting Software for Invoicing: FreshBooks
More often than not, invoicing software lacks advanced accounting features.
It’s even harder to find accounting software that has a high level of invoicing customizability. FreshBooks offers a reasonably priced subscription package that makes it easier for small businesses to customize and send invoices.
To sign up for a trial account, all you need is an email address. You don’t need a credit card just yet.
Everything you need to customize, create, and send invoices is on the left side of the screen. The dashboard that occupies the rest of the screen shows basic information, such as outstanding revenue and total profit.
The main draw of FreshBooks, though, is its invoicing capabilities.
While other accounting programs make creating invoices more complicated than it should, FreshBooks makes it seem so easy. Here are some of the features that make FreshBooks your top choice for invoicing:
- Easy input – Many invoicing-centric programs require you to create customers, products, and notes on a separate screen or window. All you need to do is click on the screen, type in your data and the item will appear on the invoice right away.
- Quick payments – FreshBooks allows your customers to pay online using a payment button on your invoice. For now, the software only accepts credit card payments.
- Payment tracking – Each invoice can record how much of the amount was already paid and whether there is still an outstanding balance, No more need to track the information manually.
- Expense tracking and project management – You can take photos of receipts and attach them to expenses. You can even connect the receipts to transactions imported from your bank account. In turn, you can connect expenses to projects and clients.
- Collaboration – FreshBooks has some basic team collaboration features. For example, you can share files, discuss project details, and set project timelines. Your employees can even track their time on FreshBooks, allowing you to bill clients for hours worked.
If you’re looking for an invoicing tool with the capabilities of accounting programs, FreshBooks is the way to go. We highly recommend FreshBooks for service or project-centric businesses, or if you work with freelancers.
Best Accounting Software for Small Businesses: QuickBooks
Who doesn’t know QuickBooks? Ask any accountant who has worked with small businesses and chances are they are very familiar with QuickBooks and its wide array of features.
Not only does it have almost all of the features accountants look for in accounting software; non-accountants can also use QuickBooks with just a bit of training.
QuickBooks offers either a demo or a 30-day free trial to let you get a better feel of the software.
The interface is easy to use. The features are all located at the side of the screen, while the dashboard shows financial information such as sales, expenses, profits, losses, bank and card balances, and overdue and paid invoices.
The graphs on the dashboard are clickable and take you to detailed reports or action menus.
What makes QuickBooks so popular among accountants? Most users say that QuickBooks lets them save time and energy, thanks to the features listed below:
- Built-in reports – QuickBooks is best known for its financial reporting features. These include general ledgers, trial balances, and 1099 transaction detail reports, which come in handy when it’s time to report taxes. You can find the reports you’ve marked as favorites at the top of the Reports page.
- Automation – The software can automate most accounting tasks, including the reports we mentioned above. You can also schedule them for specific times or frequencies. Aside from reporting, you can also automate recurring bill payments, invoices, and expense reconciliation and categorization.
- Invoicing – One unique feature of QuickBooks’ invoicing capabilities is progress invoicing (available in certain plans), which is particularly useful for projects or deliverable-based engagements. Aside from this feature, QuickBooks allows you to send invoices through email. If you have a Google account, QuickBooks actually lets you create and send invoices from Gmail.
- Mobile apps – QuickBooks has iOS and Android apps that have much of the functionality of the desktop version. You can create and send invoices, view account balances and P&L’s, and check customer data.
While QuickBooks does have its shortcomings, these are mostly minor ones. QuickBooks’ plethora of features, easy-to-use interface, and powerful reporting tools make it the choice of most accountants across all industries.
Best Accounting Software for Micro-enterprises: Zoho Books
Whether you run a Fortune 500 company or a small, one-person freelancing operation, you need accounting software.
If you are just starting your business or plan to keep it small, you need something that delivers more than the basic features at a low price point. Zoho Books ticks both boxes.
Setting up a Zoho Books account is easy, even for those who know next to nothing about accounting or tech. You just type in your business name and information and set a password, then choose modules that you plan to use.
Zoho Books is simple to use and looking for functions is very easy. The dashboard offers a quick glance at your financial status, including a cash flow graph, payables and receivables, and billable projects.
What do micro-business owners have to say about Zoho Books? Many of them consider the following its brightest selling points:
- Invoicing – Converting estimates or sales orders to an invoice takes just a few clicks. You can also edit the invoice if needed. To rearrange items, all you need to do is drag and drop them. You can send the invoice right away and attach a link to your preferred payment channel, or schedule the system to send it at another date.
- Automation – You can set up Zoho Books to do tasks such as sending payment reminders and invoices and notifying you when you have unpaid bills. Setting up rules to recognize transactions as they’re imported from your bank is also quick and easy.
- Online payments – Zoho Books can be connected to payment channels such as PayPal, WePay, WorldPay, and Braintree. This makes it easy for you to track your invoices and gives your customers a convenient way to pay you.
- Project management tool – Freelance work normally consists of one project after another, or even at the same time. Zoho Books lets you create tasks, track billable hours, and budget your hours across different projects.
The one thing that’s missing from Zoho Books is payroll, but if you are intent on keeping your operations small, that shouldn’t be much of a factor.
You may, however, print 1099s for independent contractors. Nevertheless, Zoho Books is a robust accounting solution for even the smallest businesses.
The Best Accounting Software for Your Business
All of the accounting software we have listed above have common features: dashboards, invoicing, some automation, and online payments. However, you may decide you need to get more out of your accounting software.
If you don’t have much of a war chest and would rather use your money to expand your operations, Wave might be a great option. It is supported by an industry giant and has a good set of features that won’t break the bank.
If you are looking for an accounting software made for both business owners and accountants, QuickBooks is the undisputed king of the hill. It is easy to use and has a full suite of reports that will be useful once tax season comes around.
