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Best Accounting Software for Small Businesses

best accounting software for small businesses

Best Accounting Software for Small Businesses

Accounting software for small businesses can bring plenty of advantages, especially when in your business you manage almost all of the departments. Back in the days or some business owners still manually perform accounting tasks. This activity takes out valuable time.

But now, with the advancement of technology, you as a business owner don’t have to worry about hiring an expensive accounting firm or manually manage all your finances and taxes. There are hundreds of accounting software in the market that you can choose from.

In this article, we will be discussing the best accounting software or bookkeeping software small businesses need. But before getting to discuss them further, here are some reasons why you need to get one.

Why Small Businesses Need an Accounting/ Bookkeeping Software?

Saves Time and Enhances Productivity

Most business owners like to manage everything, including their business’ finances. It somehow sometimes results in neglecting other aspects and duties. However, with bookkeeping software, business owners can simply input and avoid juggling through receipts and expenses. Now, they can spend time forming ideas for the growth of their business.

Organizes Everything

Receipts, invoices, and other financial statements can sometimes be mixed up and get lost. But accounting programs can organize everything you input into the system. It manages all finances, from importing payments and transactions to recording all data.

Since it’s all organized, you can effortlessly search for an invoice or payment. All the information needed is organized in the system.

Accurate Calculations

Once the system is set, accounting programs can calculate automatically and eliminate human errors. It can compute sales, include taxes when billing, store supplier contacts, monitor the number of stocks, and more. Ditch the old-fashioned pen and paper for an automatic system that’ll accurately and automatically manage all finances.

All-in-one Financial Management Software

Accounting software programs are not only responsible for computing taxes and tracking payments. It has multiple features that control all financial aspects of a business.

It manages and deals with monitoring inventory, loss, cost, suppliers, invoices, payroll, and customer relationships. Have a centralized software program to manage all financial aspects to save time and money.

Prepares Financial Reports

Using bookkeeping programs helps compute and manage all statements and taxes. All data you input into the system can be easily retrieved and prepare reports for government tax filing and annual return.

Track Cash Flow

You can track the amount of cash that goes in and out of your business. Since most accounting programs are cloud-based, you can bring them anywhere and input data or expenses you have for your business. It also helps check on every profit and loss of your business.

Maintains Security

Most accounting programs are stored and managed in the cloud. Therefore, it is accessible by users anywhere and anytime they need it. However, it doesn’t mean that it is unsafe. Data in most accounting software are completely protected with the best technology.

Aside from data encryption, it is regularly backed up to prevent data loss.

Multiple Users for Collaboration

Collaborate with an accountant or employees by giving them access to the software. It allows them to manage or upload expenses and inventories of the business.

Best Accounting Software for Small Businesses this 2021

Xero

Xero accounting software

Screengrab from Xero’s website

Xero is almost always included as one of the best accounting programs by most reviews online. Although some have mentioned that it is the cheapest bookkeeping program, there are far more affordable software programs than Xero, but we’ll get into that later.

Xero’s plan for small businesses begins at $20 per month. It includes sending up to twenty invoices and quotes, five billable clients, bank transactions, and capture of bills and receipts using Hubdoc. For additional features, such as sending customized invoices, employee spending monitoring, reimburse expenses, and more, require a small monthly payment.

Xero has other plans. So, as your business expands, you can move to another package for more room to manage your finances.

General Features:

  • Tracking of Bills

Check on payment due date, set schedule for batch or advance payment, and manage all of your expenses anywhere you are.

  • Accept Online Payments

Connect your Stripe, PayPal, GoCardless, and other online payment accounts for your customers to have more options. With a simple Pay Now button on the invoice, your customers can pay you with a single click. Also, you can accept credit card and debit card payments.

  • Centralized Information of Customers and Suppliers

Create groups or lists of individuals you made business with, from your suppliers to loyal customers. You can store information about them from email addresses to contact numbers. Furthermore, you can quickly search the history of transactions and payments with these individuals.

  • Capture and Transfer Receipts Digitally

Convert your physical or paper bills and receipt digitally by taking a photo or scanning the document. Xero will extract the data without the need to input it.

  • Create Payrolls

Create, keep a record, and process payroll of employees. You can pay in batch and create payslips send out to employees via email or print.

  • Complete Reporting

Track your business by getting updated reports about your business’s financial standing. You can also customize the reports.

  • Customizable Quotes

Create quotes from scratch or use available templates. Furthermore, you can convert your quotes to invoices to save time.

Pros

  • Begins with an affordable plan
  • Can integrate multiple applications
  • Accessible
  • User-friendly

Cons

  • Additional cost for add-ons
  • Limited to five bills only
  • Multiple currencies not available for lower or basic plans

MYOB

myob banner

MYOB is a favored Australian brand of accounting software. There are only a few MYOB reviews online, but it often has a 4/ 4.5 out of 5 stars when you see one. The TechRadar wrote an MYOB Essentials review, giving it a straightforward and outstanding critic.

The only downside to MYOB is that it’s made for companies in Australia and New Zealand. You can use the software overseas, but it doesn’t comply with other countries’ accounting, taxing, and reporting requirements.

So, for small businesses in Australia and New Zealand, MYOB is a highly recommended accounting program for you.

What does MYOB do?

There are two packages offered by MYOB – Essentials, and AccountRight. Each of these packages has three plans.

For the Essentials package, the plan starts at $27/ month. The beginner’s plan offers up to 25 cashflow management, five invoices, and payroll for one employee. Meanwhile, the advanced plan, Accounting + Payroll, $60/month, has additional features such as multiple payrolls, employee time management, and tracking jobs and projects. Essentials plan is both available for Mac and Windows users.

For the AccountRight package, the lowest plan is $70 a month. The Premier plan, which is the complete and most advanced MYOB plan, is worth $140/month.

Features:

  • Customize Your Invoices

Have the freedom to create and customize your invoices and quotes using any device. It also simplifies the paying process for your customers with the Pay Now button added to the invoice. You can remind customers of unpaid invoices, get real-time updates on cash flow, and see if invoices are opened, printed, or paid.

  • Monitor Multi-Currency Rates

With over 150 currencies, you can track updated exchange rates, get reports of your business’ overseas spending, and connect international banks to your account.

  • Online Payroll

The Single Touch Payroll can help you prepare/ set up, calculate, record, and send payslips to your employees. It also provides an update with every change on the ATO, from taxes to reporting regulations.

  • Tracking of Expenses

With any of your devices, you can input data about your expenses and bills. It is to keep track of what goes out of the business. In addition, you can send your suppliers’ bills directly to their software.

  • Stock Inventory

Get real-time updates on your inventories, compare the cost vs. selling price, and link stocks to your bank account for easy purchase.

  • Collaborate with Others

Give access to your accountant or bookkeeper to check on your finances and taxes. You can also control who can access or see your data.

  • Employees Monitoring

Track your employees’ time and performance by clocking in and out using the MYOB team app. Get your employees’ daily or weekly records, check their timesheets, and approve to create payslips. Furthermore, you can customize the time and salary of employees depending on their position in the company.

Pros

  • Multiple plans
  • Accessible through mobile devices
  • Tracking of employees’ time and performance
  • Easy to use
  • Made for businesses in Australia and New Zealand

Cons

  • Limited to Australia and New Zealand businesses
  • Expensive

FreshBooks

freshbooks

Screengrab from FreshBooks’ website

FreshBooks is one of the most affordable bookkeeping software in the market, with a basic plan of $6 a month or $108/ year. The basic plan alone can send unlimited invoices to five clients, track your expenses, accept payments, get reports and sales tax, and access all your finances using a mobile device.

As you move on to other plans, the number of billable clients increases and the features.

Basic Features:

Some features of Freshbooks are similar to all other bookkeeping software.

  • Customizable invoicing with professional looks. Freshbooks ability to create unlimited invoices, even with the most affordable plan, makes it one of the best bookkeeping programs for creating invoices. However, it is limited to only five clients, so the Lite plan is only designed for super small businesses and freelancers.
  • Transforms all paper documents to digital copies, so you don’t have to worry about missing receipts. It organizes all your data, and you can retrieve it any time you need.
  • The time tracking feature monitors you and your employees’ time and activities. It transfers the records of your employees and automatically turns them into an invoice.
  • Collaboration is made possible by adding members to your account. You can communicate and share project schedules with your team. However, adding a team member to any FreshBooks plan requires an addition of $10/person/month.
  • Receive payments anytime and as early as 11 days, but if you want to charge clients in advance, an addition of $20/month for an add-on is available.
  • Collaborate with your accountant, get a complete report of your business’s financial status, and bring your work with you wherever you go with the mobile app version.

Pros

  • Free 30-day trial on all plans
  • Manage or navigate with user-friendly features and dashboard
  • Affordable than its competitors

Cons

  • Limited billable clients
  • Additional payment to add team members 
  • Lack features for the cheapest plan, which requires additional cost

Zoho Books

Zoho Book software

Screengrab from Zoho’s website

Zoho Books is known for being one of the best accounting software for small businesses. Even with its lowest plan, the features included are enough to manage most of a business’s accounting needs.

Furthermore, Zoho Books have other applications such as project management and customer relationship management, which are purchased separately and can be integrated into Zoho Books.

What’s Included in Zoho Books Plans?

Zoho’s basic plan costs $9 a month or $90 a year.

  • Create transactions with up to 50 customers or vendors
  • Allows two users (accountant and owner)
  • Create invoices, allow time and expense tracking, get a financial report, and link bank accounts. The basic plan doesn’t allow billing. So, you can opt for the Standard plan. When you have a billing feature, you can create a bill and save them for recurring purchases, so you don’t have to create a new one anymore. You can automate almost all of your billing process.
  • Can be integrated into other Zoho applications
  • Manages 25 scanned documents for an addition of $15
  • Access content on mobile devices

For more advanced features such as billing, vendor credits, stock inventory, and additional contacts and users, there are the Standard ($19/ month) and Professional ($29/month) plans.

Pros

  • Automated workflow even with the basic plan
  • Affordable
  • Packed with a lot of features even for the basic plan

Cons

  • No payroll included (only available to Califonia and India)

Wave

wave accounting software

Screengrab from Wave’s website

Last on our list of the best accounting software programs you must try is Wave. It is the most affordable among all the mentioned software. With only $0! Yes, Wave is a free accounting software program that has quality features.

  • Tracking of expense and income
  • Unlimited members
  • Report
  • Organize all data
  • Scan receipts with mobile app
  • Support multi-currencies
  • Invoice
  • Allows multiple banks and credit card connections

Wave is often used by freelancers and small businesses. However, there are still features not available on Wave. There are additional costs involved if you want payroll and customer payments services.

Pros

  • Free
  • Can create multiple invoices
  • Supports multiple currencies
  • Instant payouts
  • Mobile app for Android and iOS for invoicing and receipt scanning

Cons

  • No time tracking feature
  • Basic reporting
  • Customer and payroll payments no available (requires payment)
  • Mobile application is for limited use

Conclusion

When you invest in an accounting software program, you save time and money for your business. Instead of spending time computing and managing stocks manually, with accounting programs, it automates the process, simplifies the workflow, prepares invoices, sends out bills, checks on stocks, creates payrolls, and so on. With everything taken care of by your accounting program, you can focus your energy on new ideas to grow your business or take it to the next level.

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