Top 5 Accounting Software for Small Business in 2017

FreshBooks: Top Accounting App

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Many accounting software solutions are more similar than different in terms of features. Standard modules include general ledger management, invoicing, and payment processing.

So aside from key features, when choosing the best accounting software for small business in 2017 consider these other aspects: ease of use; compatibility and integration; and security. More importantly, you should prefer a cloud based software SaaS model if you’re a small player.

SaaS accounting gives you flexibility like customizing processes, integrating third-party apps, and scaling pricing based on your current needs. As SaaS cloud based software solutions drive the whole cloud service industry to a $244 billion total value this year (Gartner), the features are getting more robust, sophisticated, yet easier to deploy and use more than ever.

In particular, SaaS accounting solutions are helpful to small businesses in times of regulatory upheavals. For instance, when the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) finalize a new standard on revenue from contracts with customers, many accounting systems have to be updated to match the new set of standards. If you’re using a cloud solution, the system upgrade is taken care by the vendor.

In this article, let’s compare five top accounting software that are most useful for small business, which includes freelancers, consultants, micro-enterprises, and fairly established small companies. We’ll also include reliable inexpensive and even free solutions for companies with a limited budget for their bookkeeping and accounting needs.

Best Accounting Software for Small Business

Here’s what our experts found to be the most reliable accounting solutions on the market:

  1. Freshbooks – overall best accounting software for small business with great scalability and freemium
  2. QuickBooks Online – most widely used but features are limited
  3. Zoho Books – with most complete basic features but which you can easily outgrow
  4. Wave – best freemium with a wide range of features
  5. Xero – recommended for Mac users

1. Freshbooks

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FreshBooks won our Best Accounting Software Award for 2016

Freshbooks is our category leader ideal for freelancers and small business owners. It is well-balanced in terms of key features, inexpensive pricing, and support. For this, it is granted our Best Accounting Software Award for 2016 and the Supreme Software Award for 2016.

One of its main strengths is its scale depth. From a freemium app to integrated features, such as, time tracking and expense management, the software can grow with your needs. Likewise, aside from its cloud invoicing, reporting, and payment processing, Freshbooks has a reliable API and tax management add-ons.

It also has the most responsive mobile app with a clean interface accessible to Android, iPhone, and mobile web users.

Freshbooks also offers great customer support. You can get in touch with the vendor via phone, online, knowledge base, and video tutorials. It is worth noting that the vendor responds to user reviews, which shows its proactive approach to ensuring customer satisfaction.

The accounting app features advanced security tools including HTTPS and multiple location data backup.

The vendor offers a great free trial plan that allows you to easily try out the software first. You can sign up for Freshbooks free trial here.

2. QuickBooks Online

quickbooks online

Perhaps the most popular online accounting software for small businesses aimed at users with the bare accounting needs, QuickBooks Online has features you can easily outgrow. It’s mainly useful for small players like freelancers, consultants, and mom-and-pop shops.

The software has one of the easiest interfaces and tools. It largely consists of completing forms, while the software does the accounting. It’s so intuitive and user-friendly that the vendor claims over one million accountants use the software.

It comes with over 40 reports including Profit-Loss Statement, Balance Sheet, and Cash Flow Statement. QuickBooks also includes inventory management and budgeting.

Mind that the software lacks full support. Instead, you may need to tap a third-party QuickBooks-certified accountant for a fee to fully optimize the solution.

3. Zoho Books

zoho books

Zoho Books is one of the top accounting software for small business. It is most ideal for micro-businesses as the app has the most extensive basic accounting tools among our five options, perhaps, in a close matchup with Freshbooks. The only difference is Freshbooks lacks customizable templates.

Key features include automatic bank feeds, automatic payment notifications, online collaboration with customers, invoice tracking, reconciliation, time tracking, API, inventory management, and automated workflows.

It is also noteworthy that the software comprises the Zoho productivity and business suite. For one, it can natively integrate with more than twenty-five Zoho apps.

Like Freshbooks, Zoho Books offers a comprehensive support network of phone, online, knowledge base, and video tutorials.

But the software has no freemium plan, which starts at $9 monthly fee.

4. Wave Accounting

wave

Wave is the most comprehensive freemium for basic accounting. This online accounting software for small businesses is ideal for freelancers, consultants, or small business with nine or fewer staff. Note that the app has display ads.

Day-to-day office processes and simple financial reporting are easily handled by Wave. These include balance sheet, profit-loss reports, invoicing, and receipts. It can also manage payroll and direct deposit. But cash management is difficult for lack of cash flow reporting or the ability to track bills and payments.

Likewise, Wave is so basic that should your cash transactions get complex, you may need to migrate to another accounting software. If you are prepared for this small inconvenience, Wave is a useful freemium for companies with tight budgets.

5. Xero

xero

Xero has almost similar interface and feel as QuickBooks Online, but with more features. It is perfect for QuickBooks users that are thinking of transferring to a more robust accounting solution.

Xero stands out among our top choices of accounting software for one thing: Mac integration. Unlike other solutions that only feature a plugin, Xero has a Mac module that natively connects to the Mac UI.

Other key features are integrated payroll module, balance sheet, bank reconciliation, expense claims, dashboard, financial reporting, inventory, and invoicing.

The software, however, doesn’t have direct relationship with US banks, but this should not be a major obstacle once you’ve set up the software with your bank.

Comparison of Freshbooks, Zoho Books, Xero, Wave, and QuickBooks

Ease of use

All five accounting software are easy to use. They have clean interface that’s easy to navigate. Furthermore, even non-accountants can figure out at once the workflows and tools. All have quick onboarding process aided by intuitive tutorials.

Likewise, all solutions are accessible via Android, iOS, and web. Among the mobile apps, we find Freshbooks the most responsive.

Another important aspect of ease of use is, when the software is familiar to many users. This means new accounting hires or external users are likely familiar with the software.

On this note, QuickBooks Online is hands down a winner. The software is part of the QuickBooks ecosystem, the “standard” entry accounting system for small business. It is used by over one million accountants; one of whom may be your future staff or consultant. We also note Xero and QuickBooks Online have almost similar interface, so shifting from one to another poses little problem.

Takeaway: All our small business accounting solutions are easy to use, but Freshbooks has the better mobile app, while QuickBooks Online is most widely used.

Key Features

When it comes to range of features, Freshbooks and Zoho Books top their class. Both have a wide array of accounting tools that are not always present in most small business accounting software. These include API, expense management, and data import.

If features is a numbers game Zoho Books tops our list. Aside from the unique features it shares with Freshbooks, Zoho Books has purchase orders, custom fields, balance sheet, and timesheets. However, it lacks multi-currency support and receipt management which are offered by Freshbooks.

For general accounting use, Zoho Books appears a good choice with its full range of features. But if your accounting requires time tracking—maybe not now, but tomorrow—Freshbooks is the best choice. Having a time tracker lends to small businesses the option to beef up their manpower with freelancers or consultants who are paid by the hour.

On the other hand, where QuickBooks is the most popular, it has the least number of features. You will quickly outgrow its invoicing and balance sheet as your business grows.

Takeaway: Zoho Books has the most number of features, while QuickBooks Online has the least.

Compatibility and Integration

Xero has the most number of integrations among our five accounting apps. It integrates with around 252 apps including important and popular apps as G Suite, MailChimp, and PayPal. Not only that, if you’re a Mac user you’ll love Xero.

While other accounting solutions provide Mac integration plugins, Xero has a built-in Mac module. It is designed to work with the Apple interface. Its native integration is superior to clunky plugins of Windows-based accounting software like Zoho Books and Wave.

Even as QuickBooks has a Mac app or Wave has a plugin compatible with Mac OS X Sierra, they cannot match Xero’s Mac architecture, which maximizes Mac cool features like fast boot-up and clean graphics.

Meanwhile, all accounting software have Zapier integration except Wave. Zapier connects to over 750 apps; as such, Wave has greatly limited its extensibility.

Takeaway: For sheer number of integrations Xero is the winner, while Wave is the biggest loser in this area.

Price

When it comes to pricing, Wave is the most cost-effective. In fact, it doesn’t cost a dime. But unlike many free apps, Wave has a good set of features like invoicing and receipt scanning on top of core accounting.

If you only need the basic invoicing, credit and debit card transactions and profit/loss reporting, Wave offers these for free. The only drawback is there’s no cash flow management and payment processing. Plus, the app has display ads.

On the other hand, Freshbooks has a freemium that may be a better fit. It has limited features, but good enough to manage three clients. Moreover, as your business grows you can easily scale its features, too, to accommodate more cash transactions and generate reporting. With Wave, you definitely need to migrate to another app as your company demands more sophisticated accounting features.

The rest of the accounting solutions don’t offer freemium. QuickBooks has the highest price point entry at $10 per month, followed by Zoho at $9 per month and Xero at $7 per month.

Takeaway: Wave is the most complete freemium, while Freshbooks has a freemium scalable to your needs.

Support

No matter how intuitive the software is, one way or another you’ll need support. Generally, the more support channels the vendor offers, the better the service. In short, the vendor makes support accessible to different sets of customers.

The more support options you have the better. That’s why Freshbooks and Zoho Books ace this spec. Both have phone and web hotlines, plus they have robust knowledge base and intuitive video tutorials. Their onboarding is also smooth and quick.

Moreover, browsing through review sites, we note that Freshbooks is the most consistent in replying to user reviews both positive and negative. This signals to potential buyers the vendor’s sincerity in building relationships with customers.

Meantime, Xero and Wave have no phone support, while QuickBooks has only knowledge base. QuickBooks’ case is unique when it comes to support: it has over 20,000 QuickBooks certified third-party consultants who can help you for a fee.

Takeaway: Freshbooks and Zoho Books have the best support network.

Security

Security is paramount in accounting. Sensitive financial data must be kept secure at all times. On this note, Zoho Books and Xero excel. Both have payment certifications, data encryption, data backup, and authentication control.

On the other hand, Freshbooks lack complex authentication for access control and payment process validation, such as, Payment Card Industry (PCI), Data Security Standards (DSS), and SOC 2. These limitations may not necessarily compromise your business barring highly classified records. For instance, access control is only critical to small business with third-party users, while PCI is only optimized for companies with client-supplier network that heavily depends on credit card transactions.

Takeaway: For complete security blanket, Xero and Zoho Books are good options.

Category: B2B News

One Comment »

  • Sarina Mandal says:

    I enjoy using Wave Accounting. I started with them and then moved to QB Online and then went back to Wave Accounting. It has improved a lot over 5 years, I highly recommend it!

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