How to Choose the Best Accounting Software for Small Businesses? [Notes with PDF]

In this article, we will learn in-depth how to choose the best accounting software for small businesses and much more.

Accounting Software for Small Businesses:

It’s essential that you choose accounting software that is both appropriate for your business and simple to use for your employees or yourself.

Manual accounting takes a long time and is vulnerable to human error. A traditional accountant, no matter how qualified, can still make mistakes that software cannot.

Accounting software is used by company owners and individuals to monitor and disclose profits and expenditures in order to keep track of the financial process.

Automation is more reliable and never leads to serious errors, which is particularly important for small businesses.

What are the benefits or advantages of accounting software for small businesses?

Accounting and financial reporting can be unfamiliar to the majority of small business owners. As a result, they tend to use this software to handle their financial information.

The software aids in data reconciliation, receipt generation, and financial data integration. As a result, they don’t have to worry about keeping the company account in balance.

 Furthermore, the transparency of financial data saves time and resources while also improving efficiency and results.

Some benefits or advantages of accounting software for small businesses are as follows:

  1. Keep track of your revenue, expenses, and earnings.
  2. Invoices can be generated and sent in an infinite number of ways.
  3. Keep track of your sales tax and monitor it.
  4. It works on a PC, a Mac, and a mobile device.
  5. Employee management
  6. Keep track of your VAT and tax
  7. Budgets must be managed.
  8. Link your bank to the system.
  9. Bank reconciliation is done automatically.
  10. Cost-saving measures
  11. Improved inventory management.
  12. Provide the most up-to-date business information.
  13. Provide financial statements for the business.
  14. Ensures accountability.

What factors do you consider when selecting accounting software for small businesses?

Choosing small business accounting software for your business can be a difficult decision.

If you choose a software program and then decide you don’t like it, switching systems can be difficult and expensive.

That is why, before making a decision for your small business, you should carefully consider all of your choices.

When choosing a small business accounting software program for your small business, there are a few main factors to consider.

  1. What are the requirements?
  2. Cost
  3. Curve of learning
  4. Quality of input
  5. Capabilities for reporting
  6. Upgrades and Shelf Life
  7. What is the name of the brand?
  8. Flexibility

Here’s what you can look for in each of the above main variables in more detail.

1.What are the requirements?

To begin, make a list of the accounting features you need. If you just need to monitor your income and expenses, as well as profit and loss, the software you’ll need will be fairly straightforward and therefore inexpensive. It’s pointless to buy a Bugatti just to go shopping.

If you run a larger company and want to keep track of the budgets and spending of individual departments or even individuals, you’ll need a few more bells and whistles.

If you work in a field like construction, real estate, or finance, you might want to go for a more costly industry-specific accounting program.

In short, the accounting software you choose should satisfy your requirements, and you will be better off investing in the best solution that meets these requirements rather than a generic multifunctional software with features you would never use.

2. Cost

Compare the costs of all the services you’re thinking about. Be sure to consider whether the program fee is a one-time charge or a recurring fee.

Monthly subscription plans that require you to pay a monthly fee for as long as you use the small business accounting software program can be very costly.

However, the cost isn’t the only consideration; consider the programs’ other advantages in comparison to their costs, as it might be worthwhile to pay a little extra for accounting software that has more features, is simpler to use, or is simply more versatile.

3. Curve of learning

Take into account how long it would take you to understand the system.

If learning an accounting program will take days or weeks, there will be a substantial cost to your company if you choose such a small business accounting software program.

There’s a lot to be said about getting a framework that you or future employees can pick up easily.

4. Quality of input

Consider how long it would take to make journal entries and run reports while calculating input performance.

If one accounting system allows you to enter twice as many accounting entries per hour as another, go with the software that is easier to use.

You’ll have more flexibility to run your business and make more money if you spend less time entering accounting transactions.

5. Capabilities for reporting

The reporting features available within a given framework are one of the main differentiators between small business accounting software programs.

Reporting on your financial results is vital to running your business, which is why you should ensure that the program you buy can easily generate the reports you need.

Many accounting systems come with pre-programmed reports that cannot be changed.

If you’re thinking about buying a software system like this, make sure the regular reports can’t be personalized to provide the details you want.

6. Upgrades and Shelf Life

You must ensure that your applications will not become outdated as the next generation computer arrives.

Some software programs cost more than the hardware they run on, so it’s important that you get free updates as hardware improves.

Your accounting software should also be upgradeable as your business expands. Rather than purchasing a new package, look for software that allows you to add extensions or updates to your existing package to accommodate your growing company.

7. What is the name of the brand?

There are several different accounting software packages to choose from, and the well-known brands aren’t necessarily the best value for money.

After you’ve settled on the options you need, you’ll still have a lot of options to choose from – how do you decide?

The following are critical considerations:

  • To ensure that you have all of the features you need,
  • Is the support satisfactory?
  • Is it possible to get a free trial before committing?

8. Flexibility

Finally, the eighth aspect to consider when choosing a small business accounting software program is the program’s flexibility.

The ease with which the requisite data can be extracted from the system is an example of flexibility.

It also considers how simple it is to make changes to the software or move it from one device to another.

The last thing you want is to have all of your accounting data locked up in your small business accounting software program and be unable to access or change it as required.

When deciding on small business accounting software, consider how each choice compares on all eight of these factors, as well as which of the eight factors is most applicable to your specific business and circumstance.

Only you know what the accounting software for small businesses needs to be able to do. If you follow this procedure, you will be able to make an educated decision about which small business accounting software program is best for your business.

What is the best accounting software for small businesses?

It can be difficult to find the right accounting software for your business.

Software created for one industry should not be appropriate for another.

It is determined by the size of the business, the revenue flow, the accountants’ level of experience, and the company budget.

If you’re looking for accounting software, it’s always a good idea to look at some of the features before making a decision.

Here are some of the best accounting software for small businesses, each of which stands out for its excellent features and functionalities.

Intuit QuickBooks: Best Overall

What is the best accounting software for small businesses?

Intuit’s QuickBooks is a piece of accounting software. It has a standalone desktop edition that you can purchase and install, as well as a cloud-based system that was launched in 2019.

QuickBooks accounting is used by millions of companies because it is designed for small and medium-sized businesses.

It is very user-friendly, and business owners love it because it allows them to manage their finances even though they have no prior accounting experience. When it comes to the cost, it is extremely fair.


QuickBooks Accounting has the following features:

  • Keep track of your income and expenses.
  • It assists in the filing of quarterly and annual tax returns by providing user manuals and tax data export.
  • Integration of financial institutions.
  • Calculations of sales taxes and tax payments that have been registered.
  • Sales and expenses are automatically sorted into tax classes.
  • The invoices are accompanied by scanned receipts.
  • Produce personalized cash flow analyses.
  • Run the most powerful and comprehensive reports.


QuickBooks Accounting comes at a cost-effective price:

  • Simple Start: For business beginners, a simple start is $12.50 per month.
  • Essentials: $20 a month for company maintenance and expansion
  • Plus: $35 a month to assist with more developed projects and inventory management.
  • Advanced: $75 a month with more information and committed support.

Note: It has different plans depending on the country.

They are currently offering a 50% discount for three months and a 30-day free trial.

Sage Business Cloud Accounting: The Best Accounting Software for Multiple Users

What is the best accounting software for small businesses?

Sage business cloud accounting is a multinational brand that offers small businesses online accounting.

It was founded in 1981 in Newcastle, England, and caters to small businesses. It allows you to choose your business, company size, and needs.

It is used by over three million businesses. Users may do this without any accounting experience and set it up for many users.


The following are the key features:

  • Manage the accounting and cash flow of the company.
  • Create and share invoices.
  • It is available on all platforms and can be accessed from anywhere.
  • Auto-entry and synchronization are also accessible.
  • Integration of the company’s software and other applications.
  • Tax enforcement software and a user-friendly dashboard.
  • Cash flow forecasting and inventory control
  • On any device, you can collaborate with your accountant.


The following is the pricing for Sage Business Cloud accounting:

  • Sage Accounting Start: $10 per month for start-up funding to assist with cash flow management.
  • Sage Accounting: $25 a month includes invoicing, cash flow monitoring, and actual entries in a cloud accounting system.

They are currently offering a 70% discount for the Sage Accounting plan for the first 6 months and a 30-day free trial.

Xero:  A popular accounting software that has a lot of great features.

What is the best accounting software for small businesses?

Xero is a cloud-based accounting platform for small and rising businesses. Xero, which was established in New Zealand in 2006, is preferred by small business owners and accountants.

This program is simple to set up and use even though you have no accounting experience. It is well-liked for its simple dashboard and ability to communicate with multiple users at the same time.

Because of the features and ease of use, small business owners like it. Its two-step authentication keeps your data safe, and each plan has a very fair price.


The following are the key features:

  • Keep track of your bills and pay them on time.
  • Make it easier for employees to submit expense claims.
  • Connect to Stripe, GoCardless, and other payment processors to accept payments online and get paid up to twice as quickly.
  • Integration of the company’s software and other applications, such as HubSpot and Square.
  • With intuitive invoicing software, you can work smarter. As soon as the job is completed, submit invoices from your phone or laptop.
  • Bank reconciliation is completed quickly.
  • Financial reports that are constantly updated.
  • Financial information that is kept confidential.
  • Collaboration with a number of different accountants.


The following is the Xero pricing:

  • Early: Send 20 invoices, enter five bills, reconcile bank statements, and collect bills and receipts for $11 a month.
  • Growing: Submit invoices and quotations, enter bills, reconcile bank statements, and collect bills and receipts for $32 a month.
  • Established: $62 per month, which includes all of the features of the Growing tier as well as multi-currencies, expenditures, and projects.

Any package includes a 30-day free trial for unlimited users.

Zoho Books: Best of automation

What is the best accounting software for small businesses?

Zoho was established in India in 1996 and has a headquarters in California. Its small business accounting software, Zoho Books, has outstanding features that allow you to monitor your finances, produce invoices, interact with users in real-time, and much more.

Customer relationship management (CRM), human resource management (HRM), and inventory control are all available via Zoho.

For automation, bank reconciliation, invoicing, and more, small business owners choose Zoho books.

You can use the app integration to connect to other apps that you already have. It also offers payroll services to Indian businesses.


The following are the key features:

  • Income reporting and tax enforcement
  • With their online payment options, you can create personalized invoices and get paid faster.
  • Invoicing and sales management.
  • Reconciliation of bank accounts.
  • Keep an eye on inventory levels to spot fast-moving goods and ensure they’re well-stocked.
  • Easily retrieve your bank transfers, categorize them, and reconcile your accounts.
  • Portal for clients.
  • Reports and records are essential.
  • Taxes are calculated automatically.


The following is the pricing for Zoho Books:

  • Standard: $12 per month, which includes up to 3 users, 5000 invoices per year, and 5000 bills per year, as well as all of the free features.
  • Professional: $24 per month, covers up to 5 users as well as all of the standard features and more.
  • Premium: $36 per month, covers up to 10 users includes all of the features of professional and more.

A 14-day free trial is currently available.

FreshBooks: the best accounting software for service-based businesses.

What is the best accounting software for small businesses?

FreshBooks was established in Canada in 2003. It is one of the most successful accounting programs for small companies.

In comparison to other accounting software, FreshBooks allows for more invoicing customization.

FreshBooks makes it easier to run your business and saves you time every day.


The following are the key features:

  • In seconds, you can create professional invoices.
  • Without Lifting a Finger, Keep Track of Your Business Expenses.
  • Provide a report on your productivity.
  • Makes it easier for your customers to pay electronically, allowing you to get paid twice as quickly.
  • Provide simple dashboards and reports so you can see how your business is doing.
  • You’ll be able to keep in touch with your clients and take care of your accounting from anywhere with the FreshBooks mobile accounting app.


  • Lite: $4.50 per month for Professionals with basic requirements
  • Plus: $7.50 per month for a business owner looking for more automation and information
  • Premium: $15 per month for rising businesses that want to give their workers more leverage.
  • Select: Custom pricing for businesses with more specific requirements

It doesn’t matter if you have some prior accounting experience; any of these simple small business accounting software options will allow you to effectively handle your accounting and balance the books.

Finally, the decision will be based on your budget as well as the features and functionality that your business needs.

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