The Best Small-Business Accounting Software of 2020

Best overall: Xero

Xero scores big for its robust features and low starting price. For just $9 a month, you can send custom invoices, reconcile bank transactions to balance the books, capture receipts for easier record keeping, and track inventory.

But Xero really stands out on the collaboration front. Unlike nearly every other accounting solution (including QuickBooks and FreshBooks), Xero’s plans all include unlimited users. You don’t have to pay extra to delegate responsibilities like bank reconciliation or expense tracking to another team member: time-saving collaboration is built into your price.

However, Xero’s $9 a month plan limits you to sending five invoices and bills a month. You can send unlimited invoices and quotes with only the Growing and Established plans, which start at $30 and $60 a month, respectively. Plus, you’ll only get multi-currency payment support, expense tracking, and project management with the $60 plan—a lot of other accounting software options offer multi-currency support and expense tracking up front.

Best invoicing: FreshBooks

Unlike Xero, FreshBooks lets you send an unlimited number of invoices and estimates with every plan. Each plan also includes time tracking for easier, more accurate client billing, plus expense tracking to keep your budget balanced.

Alas, also unlike Xero, FreshBook isn’t great for collaboration. If you want to add people to your plan, you’ll pay an extra $10 per month per user. Solopreneurs and freelancers shouldn’t have an issue with FreshBooks’ costly collaboration. But businesses that need more than one set of eyes on their finances should check out Xero or a provider like QuickBooks that rolls additional users into its higher-tier plans.

FreshBooks also limits the number of customers you can bill each month, so while you can send those customers an unlimited amount of invoices, you can’t have more than five clients on your roster. That means FreshBooks’ cheapest plan works best for freelancers and super small businesses. Midsize and growing businesses will want to consider the Plus plan, which limits you to 50 billable clients, or the Premium plan, which limits you to 500.

Most user-friendly: QuickBooks Online

Intuit, QuickBooks’ parent company, handily deserves its reputation as one of the most reliable accounting software brands. QuickBooks Online, Intuit’s cloud-based accounting software solution, includes typical features like invoicing, billing, and receipt scanning—and even its cheapest plan includes more comprehensive tracking than many competitors:

• Mileage tracking
• Sales tax tracking
• Automatic tax deduction categorization
• 1099 contractor payment tracking

Along with letting users track more data points than many competitors, QuickBooks also offers the absolute best mobile accounting app you can find. The app can do basically everything the software can (a rarity for any software provider, no matter the industry). If you work on the go, QuickBooks’ app and mileage tracking might make it a good fit.

QuickBooks’ stellar reporting features come at a price, though: its cheapest small-business plan starts at $25 a month and restricts you to one user plus an accountant. Its priciest plan, which allows for 25 users, starts at $150 a month. You can take it for a spin with the 30-day free trial, but if you do, bear in mind that you’ll waive QuickBooks’ 50% off the first three months deal.

Most affordable: Wave

At the beautiful starting price of exactly $0, Wave presents you with a slick, user-friendly dashboard and a slew of features that rival those of its paid competitors. For instance, Wave Accounting includes multi-currency support, expense tracking, unlimited invoicing, and double-entry accounting—a more accurate method of accounting that FreshBooks’ cheapest plan notably lacks.

Wave also lets you juggle multiple businesses with the same account, so if you’re an Amazon seller who also manages a small team of contractors, you can track both sets of finances without paying anything.

Even though Wave has a useful payroll tool, its accounting software isn’t necessarily right for businesses with dozens of employees. Since Wave offers just one accounting plan, businesses can’t scale up to plans with more features as they grow. And Wave’s lack of inventory tracking makes it better matched to service-based solopreneurs and freelancers.

Best automation: Zoho Books

Zoho Books easily automates the most common (and, let’s face it, boring) bookkeeping tasks—which means you can dedicate more time to your business and customers and less time to the tedious task of data entry. Most notably, it lets you set automatic customer payment reminders, create recurring expense profiles, and automate inventory tracking.

Plus, Zoho Books is just one piece of software in the larger suite of Zoho products. Each Zoho product integrates easily with the rest, which means you can use Zoho for accounting, project management, and customer relationship management (CRM) for a start. Like Xero, Zoho Books starts at $9 a month. You’ll pay another $2 per month per additional user, which is a standout bargain compared to FreshBooks’ $10 per user.

Unfortunately, Zoho Books has one huge flaw: Zoho doesn’t offer a payroll plan unless you live in California, Texas, or India. And it doesn’t integrate with third-party payroll providers either. Instead, you have to manually update the payroll-related aspects of your books—which detracts from Zoho’s primary perk of automation in a big way.

Honorable mentions

Not sold on our top picks? Here are five more recs for your browsing pleasure.

Best user experience runner-up: Sage Business Cloud Accounting

Sage Business Cloud Accounting software lets you create invoices, track customer billing and amounts owed, and more. It syncs with your bank account and provides real-time financial data. Sage’s pricing and plans are a little bit confusing (and the site is frustratingly hard to navigate), but you can choose from six plans tailored to small, medium-sized, and large businesses starting at $10 a month.

See Plans

Best for sales teams: OneUp

Like Zoho, OneUp’s plans include customer relationship management (CRM) features, which makes it perfectly suited to sales teams that frequently follow up with customers. Plus, it’s affordable: pricing for one user starts at $9. But if you’re a Mac user, you’re out of luck: OneUp works only for Windows users.

See Plans

Easiest setup: Kashoo

Got a minute to spare? You can set up Kashoo in 60 or so seconds, and the app immediately starts to categorize your expenses and learn your business spending habits. Like Zoho Books, Kashoo’s automation is its selling point—and unlike Zoho Books, it syncs with SurePayroll, one of our top payroll providers. However, Kashoo’s simplicity makes it ill-suited to larger businesses that need more features and functions than Kashoo’s straightforward software can provide.

See Plans

Best bookkeeping only: GoDaddy Online Bookkeeping

Don’t need full-service accounting software? GoDaddy Online Bookkeeping is an easy-to-use bookkeeping software program perfect for small-business owners who don’t need more than the basics. This bare-bones, no-frills software lets you process debit and credit payments, send invoices, and track finances for $4.99 a month. Bear in mind, though, that it’s just bookkeeping: GoDaddy can help you chart your finances, but it can’t really help you analyze those finances to grow your business.

See Plans

Best free alternative: ZipBooks

If you don’t need quite as many features as Wave offers, ZipBooks is a solid free alternative. Even though it’s free, it doesn’t limit the number of invoices you can send (like Xero) or clients you can bill (like FreshBooks) per month—you can access unlimited customizable invoices and accept payments too. ZipBooks’ paid plan starts at $15 a month and offers better bookkeeping and automation features. But if you prefer your accounting tools on the go, look elsewhere: ZipBooks’ mobile app is, by all accounts, absolutely wretched.

See Plans

Accounting software FAQ

What is the best accounting software for small businesses?

Most accounting software have perks to recommend them, but the best one for you depends on the type of business you run. For instance, Wave works very well for freelancers on a budget, QuickBooks helps small-business owners who travel a lot for work, and Xero works nicely for companies with lots of fiscal collaboration.

Is QuickBooks the best software for small businesses?

QuickBooks is definitely among the most popular accounting software for small businesses, but being popular isn’t the same as being the best. QuickBooks might be right for you, or you might find its pricing too high and its payroll plans too flimsy. Depending on what you need, another software pick like FreshBooks or Sage could be better for your business.

Our list of the year’s best QuickBooks alternatives has a few solid options.

Should I hire an accountant?

When you no longer have time to keep an eye on finances yourself, it’s probably time to invest in an outsourced or in-house accountant. Accountants can oversee finances and handle reports, invoicing, and other financial tasks.

Like small-business owners, accountants use accounting software. If you have a QuickBooks, FreshBooks, or Wave account, it’s easy to add your accountant to your existing plan so the two of you can collaborate on finances.

What is the best free accounting software for small businesses?

It’s hard to beat Wave’s comprehensive, completely free accounting software. Its user-friendly dashboard, low learning curve, and easy expense tracking make it ideal for freelancers and small-business owners who don’t mind finding another app to manage inventory.

But if Wave isn’t what you’re looking for, you have other options—ZipBooks, SlickPie, or another free accounting software provider could work better for you.

Can I use accounting software with payroll software?

Most accounting software providers offer their own payroll software or sync with one or more popular payroll providers. Xero, FreshBooks, and QuickBooks all sync with Gusto, our favorite payroll provider for small businesses. (Gusto starts at $39 a month.) QuickBooks also offers its own payroll plan, but we don’t recommend it: with a $45 a month starting price, it’s expensive and fails to meet some key industry standards. Wave Payroll’s self-service plans start at $20 a month while its automatic tax-filing plans start at $35 a month.

The takeaway

Maybe it sounds overly dramatic, but finding the right accounting software for your business can seriously transform your working life. With less time spent on data entry, you have more time for the things you like most about small-business ownership, whether that’s getting to know customers or making products you’re proud of.

Most of our top 10 picks are either free or include a free trial, so don’t be shy about trying a few different brands if you don’t hit on your favorite right away.

Need to pair payroll software with your new accounting software? Head on over to our piece on the best payroll software for small businesses.

Disclaimer
At Business.org, our research is meant to offer general product and service recommendations. We don’t guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.