What accounting software do startups use? FreshBooks, Zoho Invoice and Xero, QuickBooks Online easily come to mind. They are rich in features, are easy to use and with pricing scaled to budget tiers. The choice, however, depends on the company’s priority, so should your decision be based on when shopping around for accounting software. You’ll find the top solutions here ideal for startups (and small business) organized around these priority features:
Aside from technology solutions specific to your business like a CRM, sales or marketing software, accounting software would be among your list of must-have technology solutions if you’re starting out and have a few employees. You would want to keep your finances accurate and in order right from the onset and getting an accounting software demo can help you do that. However, the needs of a startup are different from those of a medium or large company and not just any accounting software will do. Fortunately, with so many accounting tools in the market today there is no scarcity of options to address the unique requirements of small teams and businesses.
In this article, we’ll go over the accounting software that startups utilize based on features and capabilities that are most relevant and useful to them considering their situation. We’ve gathered some of the leading accounting apps from our database and analyzed their distinct offerings that best cater to the demands of starter teams and small growing business. But first, let’s have a look at some interesting findings about the startup and small business landscape and why accounting software is important.
As you can glean from the above statistics, efficiently managing finances is crucial as it can spell the difference between success and failure.
Before going any further, let’s put things in proper perspective by understanding some terms. The U.S. Small Business Administration defines small businesses as:
A startup often begins as a microbusiness and is generally defined as “a newly formed business that’s designed to quickly grow.” With those cleared up, let’s dive right in.
Automation is the engine that runs almost every facet and feature of an accounting software. This capability is important because it allows you to streamline tasks and processes for faster and more accurate financial operations which translate to efficiency, productivity and savings – matters that are vital to growing businesses. Many accounting tools already employ automation and the examples below has taken this capability to the next level.
FreshBooks is an award-winning, cloud-hosted invoice and accounting app that can automate as much or as little as you require of your financial activities including functions for calculating taxes, sending reminders, securely charging your client’s credit card, updating your FreshBooks account, creating invoices, categorizing expenses, importing expenses from your bank, logging work time and billing tracked hours, billing for payments, and more. Such capabilities empower small teams and startups to do as much in shorter time and in a more efficient manner. If you want to try this software at no cost, this is possible. You can easily sign up FreshBooks free trial here.
Short of putting your business on auto-pilot, FreshBooks lets you streamline tasks like invoicing, organizing expenses, tracking your time and following up with clients in just a few clicks with intuitive features and simple navigation, all done in one dashboard so you can optimize your time and focus on serving your clients. And since it’s a cloud platform that comes with mobile apps, you are afforded unparalleled flexibility to do your work with whatever connected device, unhindered by time and location.
Online Invoices solves the problem of startups which usually do things in-house – they may not yet have a full-time accountant. You don’t need to be an accountant or get one to manage your finances since the software is built to be as simple as possible to use with fully-customizable, automated, and advanced features. Online Invoices comes in four modules – sales and invoice management, inventory management and control, online accounting and CRM, and client management and follow-up – which you can enable or disable to exactly fit your business. It brings two dozen features and capabilities to streamline your system including automatically updating stock levels whenever sales orders and POs are made; tracking time and billing; calculating taxes; monitoring sales/purchase statistics; creating product estimates; and instantly converting estimates into invoices.
The cost of the accounting software will always be a major consideration. The good thing is that there are several free accounting software solutions available which can be more than enough for basic financial activities and accounting tasks. Another positive note is that top premium solutions almost always offer a wide range of pricing packages for all user types – from freelancers and professionals to startups and SMBs and to large enterprises.
Zoho Invoice is a good entry point if you want a no-cost option since it offers a free edition. And even if you upgrade to paid plans, you get affordable subscription prices from $7 to $30 per month which include features such as time tracking and timesheets, expense tracking, customizable invoice templates, recurring invoices, customer portal, multi-currency support, SSL encryption, and variable number of customers and users (unlimited for the $30/month plan), among others. In addition, it’s a Zoho product which means smooth interoperability and integration with dozens of other function-specific apps – CRM, collaboration, office, sales, marketing, communication, etc. – from the Zoho line-up of business solutions.
QuickBooks Online is another low-priced choice designed for small businesses. The web-based platform gives you impressive capabilities like recording expenses for tax time; creating custom invoices complete with your company branding; automatically downloading, categorizing, and reconciling bank and credit transactions; and taking control of your cash flows, among others. You can even capture and save receipts with your iPhone for anytime, anywhere tracking of expenses. Prices are all budget friendly, beginning at €4.20/month for the starter plan and topping out at €8.70/month for the full-featured package.
An efficient billing and invoicing system ensures that you get paid on time for your products and services – a critical aspect for businesses starting out. There are several standalone billing and invoicing software but the feature is increasingly being included as a standard component or module of end-to-end accounting solutions since it is an integral financial function.
Zoho Books provides a complete solution for growing businesses to handle their finances and stay on top of their cash flows. It is the pioneering accounting product of Zoho that allows you to pull off invoices for each estimate, record your offline payments, or even associate those to selected projects and invoices. With invoice templates, you can easily create professional looking invoices and customize them with your brand. You get to keep a record online of all your estimates, invoices, credit notes, and recurring invoices as well as convert estimates to invoices in a click while using filters to track invoices which need your attention. Alongside these, you reconcile every type of transaction, process online payments, manage inventory, track expenses, handle POs and sales orders, and facilitate tax compliance. The solution is also built to manage finances per project where you can assign tasks and follow processes via your mobile device.
Tipalti supports multi-currency, global payment processing, and international bank/wire transfers. Startups are able to grow and expand quickly because they are able to harness business solutions that let them operate beyond boundaries and locations. Tipalti is one such solution. Its automated invoice management provides a complete and integrated approach for accounts payable to reduce workload, accelerate approvals, and increase payment accuracy. With the cloud platform, you’ll be able to capture supplier invoices from email or a web portal; reduce data entry with OCR and advanced data extraction; match POs to invoices and receipts; intelligently route approvals; schedule batch invoices for payment; and automatically reconcile supplier payment, among others. Effortless invoice management, automated PO matching, unified payment processing, and more, elevate your billing, invoicing, and payments for global operations.
Zumzum is a comprehensive cloud-based business accounting solution designed to unify one’s CRM, finance, and marketing processes. With all operations centralized on a single platform, it eliminates instances of duplicate data entry and allows for effective automation, allowing you to automatically send invoice payment reminders or deposit payments to bank accounts, among others. This greatly accelerates one’s order-to-cash processes so you can quickly reap profits and improve your ROI. Zumzum also provides you with a complete 360-degree view of your entire operations and derive insights from real-time reports and analytics for smarter execution of plans.
Scalability answers the question – can its features and capabilities match your needs as your business grows and adds more users, services more customers, and takes on heavier operations and more complicated activities? As defined earlier, a startup is a business designed to quickly grow, and accounting software should be dynamic and flexible enough to address growth requirements.
Scoro is a comprehensive business management platform that lets you bring structure to your work, especially if you are into providing professional and creative services. It allows you to manage your work more efficiently by helping you organize every aspect of your business – from planning and tracking your work and managing your quotes and invoices to tracking and your time and billing for completed work as well as managing and controlling your entire business from a single solution. Scoro lets you scale your business requirements from managing basic projects, invoices and expenses, and financial processes to more advanced task management, budgeting and forecasting, and resource planning. Plans are available to let your start simple and upgrade to more advanced features with sophisticated tools.
1&1 Online Accounting comes in three modules – invoice, accounting, and inventory manager – which you can avail individually or all at once depending on your particular accounting requirements. The modular approach allows you to get the basic features you need for the meantime and upgrade later on. If your initial need is invoice creation, the solution takes care of that with a plan for such specific function that includes sending and quotes and invoices with one click, converting quotes to invoices, providing invoice templates, and sending of automatic reminders. The accounting module lets you pair off quotes and invoice functionality with core accounting features to let you manage your cash flow, create and maintain an overview of cost centers, and digitally file and send documents. The most robust module combines quote and invoices with accounting and inventory management to easily book stock entries and invoices, update stock inventories, write delivery notes, and check customer and supplier prices.
This expands your accounting software’s capability and lets you open and use third-party apps and services right from within your accounting platform. Small teams and startups definitely benefit from this as it eliminates the need for purchasing additional software to work with your accounting solution, saving you cost while enhancing productivity. Your accounting software becomes an all-in-one solution that can handle payment processing, collaboration, communication, CRM, and sales and marketing, among others.
Xero is a small business accounting software that integrates with over 600 apps, giving you a powerful and comprehensive solution with capabilities to handle just about anything – ecommerce, conversions, document management, online storage, CRM, inventory, payment processing, invoicing, POS, payroll and HR, reporting, bills and expenses, practice management, scheduling, and many others – from a single platform. Xero comes with all the features you expect from an accounting solution such as invoice creation, inventory management, payments scheduling, PO creation, and expense claims, to name some. It can reconcile foreign currency accounts with exchange rates updated hourly. It also allows you to work on the go with mobile apps for iPhone and iPad and Android phones. Its extensibility with massive integration of any app you need for your work makes it a highly popular choice. In fact, over a million users subscribe to the Xero platform.
Invoice Ninja is a billing, invoicing, and payment management platform intended for freelancers and SMBs. It helps you create invoices in real-time even as you add clients and project details; track tasks, time and projects; customize invoices with your branding; create auto-bill and recurring invoices; and accept deposits and partial payments, among others. The open-source, cloud-based solution is ideal for professionals, sole proprietors and small businesses which are into providing services or are engaged in ecommerce or online selling because of a big advantage it offers – support for over 40 payment options. Invoice Ninja integrates with leading payment gateways and online payment processors such as PayPal, Braintree, Stripe, WePay, Authorize.net, Apple Pay, Sage Pay, PayFast, WorldPay, and more. With the software and its expansive payment integration and options, you’ll be able to quickly create professional invoices from anywhere and get paid from everywhere.
Small and starting businesses need all the support they can get from the vendor like trainings, webinars, video tutorials, how-to guides, knowledge center, customer portal as well as multi-channel availability through phone, email, live chat, social media, and tickets.
Crunched is a smart cloud accounting software that helps you manage your bookkeeping, send invoices, collect payments, and more. With the software, you can track your cash flow, record receipts and reimbursements, and print out checks with the system. You can stay on top of your income and expenses, record journal entries and post yearend adjustments, stay compliant with tax laws, generate accurate financial reports, integrate with online payment systems, and organize and maintain databases of your contacts, customers, vendors and sales items. Customer support is world-class with live professional experts that you can contact aside from other channels like phone, email and in-app live chat. A help center is also provided consisting of tutorials, article and videos, while a community is in place if you need more topics and ideas.
Zoho Expense automates a variety of expense management-related tasks such as easily recording transactions, automatically converting receipts into expenses, and generating reports whenever you need them. Furthermore, it lets you simplify approvals, do multi-stage workflows, undertake expense analytics, control expenditures, gain visibility into spending, import card transactions, automate expense recording, and more. It’s from Zoho, known for the reliability and quality of their products and, of course, top-level customer support. Every Zoho solution comes with comprehensive resources like user guides, FAQs, blogs, forums, videos, and webinars. They can be reached through phones, tickets, email, and social media.
TEM Suite Call Accounting is a call accounting software designed to help companies track their telecommunication usage and costs for actionable data that can be used to enhance their communication infrastructure and better manage expenses. The software, which supports both wired and wireless communications, directly captures data from your centralized communications with its integrations with popular PBX platforms including Cisco, Microsoft Skype for Business, Unify, Mitel, Nortel, and many more. Data collected by the software can be turned into statistical reports for easy analysis.
There are many challenges in running a small business and one SMB survey found out that 94% of them cite financial management as an area where they will be looking for support, and that 70% of them consider themselves beginners in financial management, marketing, and HR when they started out. Such is the critical role and importance of accounting software for startups and SMBs that only a most capable and reliable solution would do.
This said, FreshBooks is our top pick for startups looking for an accounting software. All the features that we mentioned in the article (and many more that we haven’t) are definitive offerings of the FreshBooks system. The software is up to the task based on our reviews, a finding shared by 97% of small businesses owners who said they will recommend the accounting solution.
In the end, the right accounting software is the one that fits your needs. If you want to speed up your product research you can start shortlisting these leading small business accounting software solutions. Many of these apps provide a free trial offer and we highly recommend that you take this deal before committing to a plan.
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