Best Online Accounting Software for Small Business in 2025

For small businesses looking to streamline their accounting process, online accounting software provides a convenient, cost-effective solution. It allows you to manage your financials online while eliminating the need for expensive accounting services and paper invoices. Utilizing online accounting software for small business can make it easier to track orders, generate reports and stay on top of billing and taxes. With a user-friendly interface, online accounting software is an excellent tool for organizations seeking an efficient way to take care of their finances.

Online small business accounting software can be a great way for entrepreneurs to track their finances and stay organized. However, with so many different options in the market, it can be hard to know which will best suit your needs.

A savvy online shopper should take advantage of every free trial offer available before subscribing to an online accounting software package. This gives the user the chance to test out the features and make sure it is the right fit for their business, as well as giving them the opportunity to compare different packages side by side. This can save time and money in the long run, allowing small businesses to find just the perfect online accounting software package at a price that works for them. To help you get started, check out the free trial offers of FreshBooks, Gusto, QuickBooks Online and Zoho Books.

Small businesses

Small businesses are leveraging online accounting software to streamline their various financial tasks, such as tracking expenses and income, preparing tax documents, and creating financial statements. This software can provide a bridge between managing data manually and using traditional enterprise accounting systems.

Online accounting software small business plans help company owners to save time by automating bookkeeping tasks, exchanging information with banks for faster reconciliations; as well as providing real-time updates, enhanced security features, improved scalability and other advantages, at a minimal cost versus buying software license.

Startups

A startup can use online accounting software to gain better financial visibility to minimize their cash burn rate. This includes automating transaction entry and reconciling online bank accounts. The software also helps with year-end reporting, simplifying the process of creating the necessary tax documents. Lastly, the software assists in budgeting, forecasting and creating financial statements, which can provide useful insights into project profitability and future growth planning.

Contractors, freelancers

Online accounting system for small business also fits the needs of contractors and freelancers with projects that have grown to the point they are managing multiple teams and clients at once. It simplifies the process by offering various tools and features to streamline business activities such as invoice creation, which can replace traditional manual processes. For example, they can easily keep track of expenses, send invoices on time, and view real-time analytic results with automated reports. Additionally, many platforms offer extra features like recurring billing and connect with third-party services such as Paypal or Stripe to receive payments securely. Online accounting software can save contractors and freelancers time while providing accurate records of financial transactions.

• FreshBooks is a cloud-based accounting software that simplifies invoicing, bookkeeping, time tracking and reporting. It is designed with small business owners in mind, making it easy to estimate, create professional invoices and collect payment quickly. With FreshBooks’ time tracking feature, users can easily manage billable hours and accurately track projects for clients. Furthermore, users have the ability to generate reports for items such as sales and expenses, allowing them to gain insights into their company’s performance in real time.
• NetSuite ERP is an Enterprise Resource Planning (ERP) system ideal for a growing small business. It provides a suite of applications meant to enhance the whole gamut of financial transactions, operations, and customer relations within a single integrated web interface. NetSuite ERP allows businesses to quickly bring together all their operational and financial data across departments, eliminating duplicate data entry and providing real-time visibility into the current status of business operations on the cloud wherever business happens.
• Gusto is an all-in-one payroll, benefits and HR platform that makes it easier for small businesses to manage their finances. It streamlines HR processes and simplifies payroll management by allowing employees to access pay stubs and other information through the platform. Gusto claims that its system will save businesses time, effort, and money by reducing paperwork and eliminating manual errors.
• QuickBooks Online is the cloud-based edition of the popular accounting software, designed to make financial record keeping and analysis simpler and more efficient. With QuickBooks Online, users can track expenses, manage cash flow, control inventory and invoicing, and more. This powerful tool simplifies important business tasks so that users have time to focus on their business growth.
• ADP Workforce Now is an online platform that provides HR and payroll solutions to small and medium-sized businesses. It offers comprehensive tools to help manage recruitment, onboarding, compensation, benefits administration, time tracking and compliance. By utilizing this technology, businesses can focus on their core functions while ensuring increased productivity and accuracy of workforce management processes.

ERP

Enterprise Resource Planning (ERP) is a comprehensive software solution with accounting at its core, integrated with key business processes like CRM, sales transactions, inventory management and asset management. It is designed to give businesses a holistic view of financial data and other aspects of operations such as customer/vendor relations, inventory management, and production tracking. ERP enables users to update information at any time from anywhere using cloud computing technology, making it highly convenient and efficient. It provides sophisticated reports about cost, fixed asset expenses, revenue trends, and more; thus allowing organizations to make better decisions based on both financial and operational insights. ERP also helps an organization maintain effective data governance so that its financial information remains accurate and secure.

Core Accounting

In general, when people say accounting software, they mean the core accounting features. They consist of a suite of tools, which supports standard accounting activities such as creating invoices and generating reports. In addition, it can track expenses, income, and taxes at the individual customer’s level.

This type can be considered online accounting software for small businesses, allowing them to manage their finances more effectively and efficiently. The software helps automate tedious tasks, reduce errors caused by manual data entry, enhance financial reporting accuracy, and improve collaboration with other business departments. It also simplifies compliance with government regulations and assists in managing cash flow.

Payroll

Payroll software can be considered a type of accounting software because it accounts for a major element in your financials: calculating wages and paying employees. It is designed to assist in payroll processing, deductions and taxes, and other employee data such as timesheets, cancellations or holidays. This can help to save companies time and effort when managing their workforce, reducing costs while maintaining compliance with tax laws.

Billing and Invoicing

Billing & invoicing is usually a module in a robust accounting system but is also peddled as a standalone solution. As a type of accounting software, it streamlines the entire process, from the generation and sending of invoices to reporting, payments collection and analysis. This type of software eliminates repetitive administrative tasks, saving businesses time and money associated with manual processes. Additionally, it possesses strong security measures to ensure confidential data remain protected at all times.

Project Accounting

Project Accounting software, also known as job costing software, is specifically tailored to the needs of a project-based business. It allows users to efficiently track costs by job or segment and create a comprehensive view of what was spent and if it adheres to the budget set for that project. Conventional accounting software doesn’t provide detailed analysis at the project level and, therefore, may not be suitable for businesses with multiple concurrent projects.

Accounts Payable/Receivable

Accounts payable/receivable (AR/AP) software is specifically designed to manage payments and invoices associated with a business’s customers. In short, accounting software offers more sophisticated features than AR/AP software, including forecasting and analysis of financial data. Organizations typically leverage both types of software to ensure that their financial activities are properly managed and tracked effectively.

• Bookkeeping. Complex entries, such as depreciation calculations, can be calculated quickly and accurately in just a few clicks—streamlining day-to-day financial tracking for organizations of all sizes. Accounting software reduces the time businesses spend on mundane data entry tasks and increases accuracy by providing an automated system of checks to ensure data is correct before posting.
• Financial reporting and forecasting. Accounting software enables businesses to produce a range of financial reports that summarize the results of their business operations at any given time. Additionally, it provides insights into how a business has been performing over predetermined periods, allowing for trend recognition and forecasting. Forecasting involves seeing what the outcome of current trends is likely to result in over short- and long-term forecast horizons, helping businesses optimize resources for efficiency.
• Billing and invoicing. Accounting software with built-in billing and invoicing capabilities can be a great way for businesses to save both time and money. This feature allows for easier tracking of payments and collections, allowing businesses to reduce the number of mistakes made during the billing process. It also enables businesses to quickly generate comprehensive invoices for recordkeeping purposes, streamlining the entire process from start to finish.
• Expense management. This feature allows business owners to set up a budget and track where every penny is being spent in real time. Small business accounting software online offers an even more convenient solution, enabling customers to securely manage and execute all accounting activities from any internet-capable device.
• Inventory management. This allows businesses to accurately track and measure activity related to their inventories, giving a full accounting of what needs to be ordered, stored, sold, disposed of or returned. With this information at their fingertips, companies can make smart decisions when it comes to managing their business supplies and optimizing their inventory systems.
• Multicurrency support. Accounting software with multicurrency support is one of the best features to consider when choosing a piece of software for a small business. Having the ability to convert from one currency to another instantly helps ensure accuracy and removes any possible errors that may stem from manual calculations.
• Bank reconciliation. Accounting software with bank reconciliation offers a quick and efficient way to manage incoming and outgoing funds from the company’s accounts. It can be used to quickly identify and reconcile any discrepancies between the business’s books and its actual financial records, helping to ensure accuracy in day-to-day transactions. Furthermore, bank reconciliation also helps businesses keep track of their expenses more easily, as transactions can be logged and tracked within the accounting software.
• Tax management. The best online accounting software for small businesses should also allow users to establish global tax rules within their system accordingly. This gives them greater control over taxation policies while ensuring they remain compliant in all aspects.
• Payroll. Small business online accounting software makes it easy to generate payroll reports, which are often required for tax filing purposes. This streamlines the payroll process, making it faster and more accurate for small businesses.
• Security. Accounting software protects your data using encryption, authentication and authorization processes to ensure its safety from online threats. It also includes audit trails to identify any unauthorized activity or modifications that may have been made to financial records. Having this insight makes it easier to trace back the source of any issue and fix the problem before any major damage can be done.
• Integrations. Key integrations include integration with a database hosting services such as Amazon RDS or Microsoft Azure, an analytics suite such as Power BI or Tableau, connectors between different apps like Zapier, and automated financial reporting tools like Fathom or Xero. All of these integrations will help streamline the process of managing accounts and automate manual routine tasks. Additionally, you want to make sure your chosen software has strong APIs so it can communicate with third-party apps when needed.

Accounting software online small business offers numerous advantages, namely:

Reduce costs

Accounting software can help businesses reduce costs in several ways. First, it eliminates the need to hire extra personnel or invest in expensive accounting software packages. Second, it automates processes that would otherwise require manual verification, saving both time and money. Finally, data reporting is much easier and faster with accounting software, allowing businesses to make timely decisions based on accurate data that reduces the chances of costly errors.

Help oversee finances on a daily basis

Accounting software can help businesses manage their day-to-day finances. It allows the user to keep track of spending, income, and other financial records in real time without needing to manually process or store data. Accounting software also helps users have an overall better understanding of where their money is going, enabling them to make informed decisions regarding their business’s finances and helping them oversee finances on a daily basis.

More accurate reporting

Accounting online software for small business gives businesses the unique capabilities of more accurately recording, tracking and reporting financial transactions. Companies that use accounting software benefit from increased accuracy as transactions are immediately logged and calculations processed at the click of a button. With such enhanced accuracy, companies relying on accounting software often have improved budgets, forecasting and reporting capabilities that can be beneficial to making better-informed decisions.

Reduce the likelihood of mistakes

Utilizing accounting software can help to reduce the likelihood of mistakes occurring when processing and recording financial data, due to its automated capabilities and the ability to easily detect errors.

Promotes transparency

Accounting software greatly promotes transparency in business operations. It automates the tracking and logging of financial data, making it easier to generate accurate and up-to-date reports. As all the information is accessible and traceable, discrepancies can be quickly detected, leading to increased accountability and trustworthiness for the company.

Increasing proportion of accounting processes being automated

With manual accounting processes still in place for over three-quarters of businesses according to a Deloitte survey, many accounting firms are taking steps to modernize their practices. Implementing technology such as cloud-based solutions, budgeting and forecasting software, and data analytics tools can revolutionize the way accounts are managed. Automation has obvious benefits in regard to efficiency, but can also offer companies a greater range of services, improved communication channels and more accurate insights. It is highly recommended that accounting firms explore areas where they can leverage technology and automation so they can continue delivering valuable services while staying ahead of the competition.

Rise of neobanks and its impact on small business accounting

Neobanking is a relatively new concept that is revolutionizing the realm of small business accounting. It changes the game in two primary ways—providing these businesses with modern tools to manage their finances and creating greater convenience for customers who pay these businesses. Neobanks are digital-only bank accounts designed to help streamline the way small business owners operate and offer simple services like receiving payments, budget tracking, making payments, and more. This new technology allows small businesses to operate more efficiently and easily by having a central saving and accounting system that works best for them. Customers benefit from neobanking with increased security and easier payment options as well as faster, more intuitive account verification systems.

Increasing use of AI in accounting

In recent years, the use of artificial intelligence (AI) in accounting has increased significantly. AI-powered online accounting and payroll software for small business allows these companies to quickly process large amounts of data to intelligently suggest financial projections, leading to more informed decision-making. In addition, AI helps automate manual processes—such as banking reconciliations and tax filing—saving time and effort that would otherwise go into completing these tasks.

Use of blockchain technology in accounting

Blockchain technology is increasingly being adopted to achieve greater accuracy and efficiency in accounting software for small business online communities. This distributed ledger technology creates a shared record of entries that are stored in multiple locations ensuring unprecedented levels of data security. It also removes the need for middlemen as transactions are directly recorded onto the blockchain, improving both transparency and accuracy. By introducing this secure online process, online accounting and payroll systems become more reliable, accurate, and cost-effective.

Accounting jobs conducive to remote work

Accounting jobs can be particularly well-suited to remote work since the tasks involved are largely online activities utilizing online accounting and payroll software for small business. Accounting is one of the few fields where online presence is highly valued, as computing technology has become more pervasive. There has also been a rise in online courses that offer specialized training and skill-building, ensuring accountants have the expertise they need to do their job properly.

By removing the need to have an in-house accountant, small businesses are able to cut down on some overheads, while relying more heavily on technology solutions. Remotely working accountants can also be accessed around the clock, meaning business owners can access their financial services at any hour. Remote working has its benefits for both sides: small businesses gain expertise at a fraction of the cost, while remote accountants benefit from improved flexibility and autonomy in their job roles.

Accounting software is a great tool to help small businesses manage their finances and taxes. However, the wrong choice of accounting software can potentially create issues and increase costs.

• Getting the wrong feature set. The selection of what is the best online accounting software for small business should be made after careful research, as different tools might have different features and some of them may not meet your specific requirements. As discussed above, accounting software comes in different types. Some are comprehensive ERP systems while others are specific to one accounting process only, such as payroll, invoicing or expense management.
• Limited integration. There also could be compatibility issues when one tries to install it on their computer. The best online small business accounting software solutions integrate with key business systems including CRM, ERP, inventory management software and payroll software.
• Poor tech support. Poor customer service or a lack of frequently updated versions can also lead to difficulties in using accounting software properly.

What is the best online accounting software for small business? In large part, that will depend on the type of deployment matching your needs.

• Cloud-based accounting. A cloud-based deployment means the software runs on remote servers hosted online. This type of deployment usually requires a subscription fee and has the advantage of being accessible from any device connected to the internet. 
• On-premise. An onsite or on-premise deployment means the software runs on a server stored within a business’s office building, which may also run other day-to-day applications. While this type of setup requires specialized equipment, it allows for greater control over data security.
• Hybrid. A hybrid deployment combines elements of both cloud and onsite deployments offering the best of both worlds—greater usability and first-rate security.

Generally speaking, payment schemes vary greatly—there are online solutions that charge monthly fees or standalone installations that require a purchase price and license fee. Costs can range from free to several thousand dollars depending on the complexity of the software required, whether or not support is included, and various other factors. Evaluating these costs and payment schemes is paramount when assessing an appropriate accounting software solution.