Top 5 Accounting Software for Small Business in 2017


accountantMany accounting software 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.

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.

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Best Accounting Software for Small Business

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

1. Freshbooks

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

It stands out for its scalable features, starting with a freemium all the way to advanced features like API, time tracking, and expense tracking. Other key features include: online invoicing, payment processing, and accounting reports and taxes.

Likewise, it 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.

2. QuickBooks Online

quickbooks online

It is designed for various types of small businesses, from consultants to freelancers and online merchants to sole proprietors. QuickBooks Online is best known as the entry level accounting software. Most small businesses start with it, but outgrow its features once the business expands.

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.

Another great aspect of this software is it is part of the Zoho suite of business apps. Your Zoho Books account lets you access over 25 other Zoho apps.

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

The only drawback is the vendor has no freemium. Price starts at $9 per month.

4. Wave Accounting

wave

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

Wave can manage daily business transactions and generate basic financial statements such as profit-loss statements and balance sheet reports. Key features include: invoicing, payroll, receipts, and direct deposit. However, you cannot run cash flow statement or pay bills and track payments in it.

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

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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.

Why is Xero in our list of top accounting software for small business? Its most renowned feature is its Mac adaptability. Xero is fully integrated with Mac. Compared to other applications that only offer Mac versions or plugins, Xero’s architecture has a built-in Mac module that ensures the software optimizes Mac interface and graphics.

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 of our small business accounting solutions are user-friendly designed for entrepreneurs with little accounting knowledge. Their interface are easy to navigate, the tools are highly usable, and the onboarding tutorials are easy to understand.

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

Zoho Books and Freshbooks have the most complete features among the small business accounting solutions. They offer features that are not present in the other accounting solutions. These include API, data import, and expense tracking (available in Wave).

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.

Other accounting solutions only offer a Mac version or, worse, none, but Xero is designed for Mac users. It solves the problem common with Mac versions of PC-based solutions like Zoho Books or Wave: you avoid bloated features.

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

Wave is an unbeatable freemium. Unlike most freemiums with limited features, Wave has a wide range of features from accounting to invoicing and receipt scanning.

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.

Freshbooks and Zoho Books have complete support channels, such as, phone, online, video tutorials, and knowledge base. Furthermore, we find the knowledge base of both vendors extensive and can answer most of our FAQs during onboarding.

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

Xero and Zoho Books have the most comprehensive security suite. They cover payment certifications, data encryption, authentication process control, and data backup.

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

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