5 Accounting Tools Recommended by Small and New Businesses

5 Accounting Tools Recommended by Small and New Businesses

So you’re finally starting your own business, but can’t quite figure out how to handle finances and accounting, something which you last learnt only in college or maybe even school? You already know it – you need to find the best small business accounting software that meets your needs without having to break the bank.

This search can be intimidating – the accounting software landscape is a packed one. It can be really tough to know where to start, which are the best plans and features, which ones meet your budget and so on. 

To help make this decision easier for you, we’ve put together a list of the best accounting software just for small and new businesses. We have covered everything, from pros and cons, suitability, right down to pricing.

How Do You Know Which Accounting and Bookkeeping Software You Should Use?

Before we move onto the list, here are a few things to keep in mind as a small/new business owner when you’re searching for accounting software and tools:

Pinpoint your needs accurately.

Take a stock of WHAT you need an accounting system for – Make a list of your needs and prioritize them from least to most important. It’s easy to be tempted by tools that provide a host of features, but you may end up getting confused and stressed if you can’t navigate efficiently around the barrage of tools. 

Plan your budget – and be honest about it.

Identify how much you can spend on accounting or bookkeeping software. Once you know how much funds you need to allocate, try to limit your options to only those that fall within these allocated limits.

Evaluate the features that you want to have in your software.  

Like I said, it’s easy to get swayed by the onslaught of attractive features each tool provides. But remind yourself not to get distracted. Revert to your list of prioritized needs and analyse only those tools that meet those needs. 

Now that you have more clarity on what approach to take when evaluating an accounting or bookkeeping software, let’s take a look at our picks for the best accounting software for small and new businesses. 

Best Accounting Software for Small and New Businesses

1. Freshbooks
2. QuickBooks Self-Employed
3. Xero
4. Wave
5. ZipBooks

1. Freshbooks

FreshBooks is ideal for businesses that need to send out recurring invoices, or run a subscription model business. This software makes it so much easier for you to send proposals and invoices, request deposits, collect client retainers, and receive payments.

Pros:

• It has a really user-friendly interface.
• It’s one of the most affordable tools out there.
• Offers advanced invoicing features.

Cons:

• Doesn’t provide payroll services.
• The mobile app has certain limitations.

Who is it best suited for?

Service-based businesses, self-employed professionals, or businesses that bill clients by the hour.

Price:

There are four plans: 

• Lite at $15 per month
• Plus at $25 per month
• Premium at $50 per month
• Select – a custom service with custom pricing.

2. QuickBooks Self-Employed

QuickBooks has everything small business owners need to manage their bookkeeping – Receipt capture, 24/7 chat support, and integrations with PayPal, Shopify, and Square are some of the few features it offers. Advanced plans allow business owners to track inventory, track time, and run full-service payroll.

Pros:

• Syncs with TurboTax, which lets freelancers track their income and expenses for tax return.
• It has a smooth mobile app.
• Let’s you differentiate between business and personal expenses.

Cons:

• There are limited reporting options.
• The data cannot be easily transferred to other accounting software or tools. 

Who is it best suited for?

Part-time freelancers and independent contractors, who may not have a separate bank account for their business activity.

Price:

Plans start at $12 per month.

3. Xero

Xero is brilliant accounting software targeted towards small businesses, and provides ease of use along with mobile utility. It can be synced across multiple devices and offers users updates in real time, giving business owners the latest information any time, any place. It integrates with a third-party payroll service that lets businesses collect online payments from customers through integration with Stripe and GoCardless.

Pros:

• The inventory management interface is very simple.
• Easy integration with third-party apps.
• Provides an efficient mobile app.

Cons:

• There are limited reporting options.
• Limited customer service.

Who is it best suited for?

For micro-business owners who conduct most of their business on the go. 

Price:

Starts at $9/month.

4. Wave

All of the options we’ve looked at so far charge a minimal fee for their services. But if you’re starting out new and small, sometimes even a low fee is a LOT to invest. Which is why Wave might be a perfect fit for you – it’s a 100% free accounting software.  And all of your data syncs with Wave’s software, so your bookkeeping is always updated. 

Pros:

• Free services include accounting, invoicing, and receipt scanning.
• You can run multiple businesses in one account.
• There are no transaction limits.

Cons:

• Doesn’t provide inventory management.
• There are higher fees for credit cards and ACH payments.

Who is it best suited for?

Service-based small businesses that sends simple invoices and don’t need to track inventory or run payroll.

Price:

Free. Sign up for an account here! 

5. ZipBooks

ZipBooks keeps things as simple as possible. It emphasizes the very basics, like accounts receivables, so users won’t spend hours navigating complicated menus or menacing features. Their statements and reports are clean and minimal, focusing on the crucial information entrepreneurs need to run their business.

Pros:

• Easy and simple user interface
• Invoicing is easy to set up and track.
• Quick ease of customer support.

Cons:

• Populating + organizing time entries for invoices.
• Limited mobile apps.
• Limited mobile apps.

Who is it best suited for?

Perfect for freelance and small business owners who might lack experience with bookkeeping.

Price:

The Starter plan is free and has unlimited invoicing, basic reporting, and a single bank account connection. Additional plans start at $15 per month.

The Bottom Line 

Regardless of whether you’re a small, big, old or new business, you could definitely save a lot of time and energy by incorporating a few smart accounting tools like the ones we mentioned in this list. Use these tools wisely to take advantage of your time. Good luck!

Also, if this post helped you decide which software you want to choose, let us know! Tell us which software you will or are currently using in the comments and share this post on your social media to help other business owners get closer to their goals too.