Best Accounting Software For Small Business (2022): Xero vs FreshBooks vs QuickBooks vs Wave & More

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1st
FreshBooks logo
2nd
Xero logo
3rd
QuickBooks logo
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As a small business owner, accounting can be a dreaded task, but it doesn’t have to be. Investing in the right small business accounting software will save you a ton of time and money in the long run, and the best solution is likely more affordable than you think.

Article Overview

What’s The Best Small Business Accounting Software?

All of the software reviewed here is cloud-based, so no downloading or installation is necessary — and you can tackle your accounting tasks from almost anywhere, including your smartphone. See our top three picks, from pros and cons and available features to pricing and customer support.

Winner: FreshBooks

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FreshBooks takes our top spot for this small business accounting software comparison. FreshBooks is just what its name implies — a fresh take on a tedious task, with an easy, intuitive interface, tons of great features, and excellent mobile apps.

FreshBooks has grown to more than 10 million users since being created in 2003 out of a small business owner’s sheer frustration with his billing options. The major downsides for some potential users? It’s geared toward service-based small businesses, so if you need inventory support, look elsewhere.

FreshBooks also lacks some of the more advanced accounting features other software services provide (including payroll). Think of FreshBooks as more of a small business bookkeeping software. FreshBooks offers a wide array of add-ons and integrations, so it’s easy to make up for most of those shortcomings.

Key Features

  • Best for independent contractors, agencies, firms, and consultancies
  • Robust API for developers
  • 75+ add-ons/integrations, including Paypal, Zapier, Gusto, wufoo, Live Chat, Mailchimp, and more
  • Project budgets
  • Credit card processing, even with mobile app

FreshBooks screenshot

Pros

Cons

  • Converts estimates to invoices
  • Can see when customers view their invoices
  • Great time tracking feature shows overages on projects
  • Multi-currency support
  • Award-winning customer support team
  • Phone, email, blog, FAQ, tutorials support
  • 30-day money-back guarantee
  • No full-service accounting version option to upgrade
  • Payroll function only through app integration with Gusto
  • No inventory tracking
  • No weekend customer service hours

Pricing

Try them for free with their 30-day free trial (no credit card required). All plans include free customer service, import and export data, credit card processing, and data backup. You can save 10% off the following pricing if you pay annually.

  • Lite: $15/month for five clients
  • Plus: $25/month for 50 clients
  • Premium: $50/month for 500 clients
  • Select: Contact FreshBooks
  • $10/month/person for additional users

Promotions

New Year’s Sale – save 60% for your first 6 months by clicking here.

Read Our Full Review of FreshBooks

Runner-Up: Xero

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Who knew accounting could be enjoyable? Xero, our number two pick for best accounting software, is (dare we say it?) fun. Its easy-to-use interface takes a lot of the headache out of having to do your books.

Cloud-based Xero is one of the fastest-growing small business accounting solutions on the market and an excellent QuickBooks alternative. A New Zealand team launched Xero in 2006. Xero is anything but stale — one of its most outstanding features is a feature request in their community forum. Long-time Xero customers say they act on feedback by continually improving their software and frequently adding new features.

Key Features

  • Best for small to mid-sized businesses
  • Full-accounting features and tools
  • Supports multiple currencies and tax rates
  • 700+ add-ons/integrations, including Salesforce, PayPal, Fathom, Square, and Stripe
  • Payroll tool* with Premium Plans allows for ten employees, direct deposit, and e-file payroll taxes (Standard Plan allows for five employees)

*Xero Payroll is unavailable in the U.S. as of December 31, 2018. (At that time, their payroll services moved to Gusto).

Xero screenshot on computer and phone

Pros

Cons

  • Unlimited users with every plan and all plans include direct deposit and e-file payroll taxes
  • Very intuitive interface that brings items needing attention to the forefront
  • Manages basic inventory
  • Excellent 24/7 customer support via responsive email, live chat, and site support
  • Blog, community forums, webinars, social media
  • Time and job tracking only available through integrated apps
  • No automated invoice reminders or overdue notices
  • Reporting tools have room for improvement
  • No phone support

Pricing

Try out Xero with their 30-day free trial.

  • Early: $12 per month (limited to five invoices and five bills per month)
  • Growing: $34 per month
  • Established: $65 per month

Read Our Full Review of Xero

3rd Place: QuickBooks Online

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Intuit QuickBooks rounds out our top three picks for the best small business accounting software. QuickBooks has all the features a small to medium-sized business would want and more, with both an online small business accounting version and downloadable software.

You don’t have to be a financial wiz to use its wealth of accounting features. QuickBooks’ interface is relatively easy to navigate and organized well. The issues keeping QuickBooks out of the top two?

They dropped many features and lost some of their functionality when they revamped their online software in 2013. And their customer support needs improvement no email support, long call-in wait times, and minimal online support tools.

Key Features

  • Best for small to mid-size businesses
  • Online version supports PC, Mac, and Mobile
  • More than 200 add-ons/integrations, including TSheets Time Tracker, PayPal, Method CRM, Zapier, and more
  • Easy-order products: printable checks, W-2 and 1099 tax kits, custom printed envelopes, labels, and forms
  • Searchable “Find a QuickBooks Expert” near you
  • Self-employed plan calculates and pays quarterly taxes and puts deductions into Schedule C format

QuickBooks screenshot

Pros

Cons

  • Can upgrade to QuickBooks Enterprise when your business grows
  • Inventory, time, and project tracking with higher-paid versions
  • Mobile apps for iOS and Android devices
  • You can photograph your receipts and incorporate into expenses
  • Plus plan is integrated with G Suite
  • Payroll plans are a significant added fee per month
  • Interface not as user-friendly as other accounting software products
  • No email customer support
  • A number of customer complaints about support staff’s lack of knowledge about software

Pricing

Comprehensive 30-day free trial that includes all features, Online Payroll, and QuickBooks Payments. If you opt to purchase right away without using the free trial, you can typically get the first three months at a discount.

Self-Employed Simple Start Essentials Plus Advanced
Price Per Month $15 $25 $50 $80 $180
Number of Users 1 1 3 5 25

Comparison Table

See our side-by-side table to help you compare small business accounting software features, pricing, and more.

1st Place: FreshBooks Xero 3rd Place: QuickBooks Online Bench Kashoo Sage Wave Zoho Books
Free Trial 30 Days 30 Days 30 Days 30 Days 14 Days 30 Days Free Plan 14 Days
Lowest Price Per Month $15 $12 $15 $249 Free Plan $56.08 Free Plan Free Plan*
Number of Clients 5-unlimited Unlimited Unlimited N/A Unlimited Unlimited Unlimited 50-Unlimited
Number of Users 1 ($10/additional user/month) Unlimited 1-5 Unlisted Unlisted 1-Unlimited Unlisted 2-10
Accountant Access Checkmark Checkmark Checkmark Unlisted Checkmark Checkmark Checkmark Checkmark
Multiple Currency Checkmark Checkmark Checkmark Unlisted Checkmark
Number of Invoices Unlimited Unlimited Unlimited N/A Unlimited Unlimited Unlimited Unlimited
Customizable Invoices Checkmark Checkmark Checkmark N/A Checkmark Checkmark Checkmark
Print & Mail Invoices Checkmark Checkmark Checkmark N/A Checkmark
Credit Card Processing Checkmark Checkmark Checkmark N/A Checkmark Checkmark Checkmark Checkmark
CRM Integration Checkmark Checkmark Checkmark Checkmark
Supports Payroll Integration Only Checkmark Additional Charge Integration Only Integration Only Additional Charge
Supports Contract Payments Integration Only Checkmark Additional Charge Integration Only Integration Only
Payroll Tax Integration Only Checkmark Additional Charge Integration Only Integration Only Additional Charge Checkmark
Prints Checks Integration Only Checkmark Additional Charge Checkmark Integration Only Additional Charge Additional Charge
Prepares 1099s Integration Only Checkmark Additional Charge Integration Only Integration Only Checkmark
Recurring Bill Payer Checkmark Checkmark Checkmark Checkmark Checkmark
Sync with Bank Accounts Checkmark Checkmark Checkmark Checkmark Checkmark Checkmark Checkmark Checkmark
Number of Reports 20+ 40+ 65+ Financial Statements Each Month 7 23 9 30+
Budget Manager Checkmark Checkmark Checkmark
Inventory Checkmark Checkmark Checkmark Checkmark
Auto Backup Checkmark Checkmark Checkmark Checkmark Checkmark Checkmark Checkmark
Mobile Apps Checkmark Checkmark Checkmark Checkmark Checkmark iPhone Only Checkmark
Tutorials Checkmark Checkmark Checkmark Checkmark Checkmark Checkmark Checkmark
Community Forums Checkmark Checkmark Checkmark Checkmark Checkmark Checkmark Checkmark
Customer Support M-F: 8am-8pm ET phone & email ticket 24/7 email 24/7 chat support Via phone & email M-F: 6am-5pm PT phone, email, live chat Phone, email, live chat Email; live chat for paying customers M-F: 24 hours phone & email

* Zoho Books free plan for business with < $50,000 annual revenues

More Small Business Accounting Software Reviews

On average, only half of small businesses survive after five years and less than one-third after ten years, according to the Bureau of Labor Statistics. Of course, there are many reasons for a small business’s longevity, but having sound accounting practices is a major key to survival.

The companies below didn’t make our top three, but you might find that one of them perfectly suits your needs. Click on one of the links below to see the other accounting software for small businesses.

BenchKashoo | Sage Accounting | Wave Accounting | Zoho Books

Bench Accounting Review

Bench Accounting LogoVisit Website

Bench differs from the other software services we include in these reviews, but we think they’re worth including (although they’re expensive). A Canada-based company, Bench offers a team of bookkeepers to do your books and intuitive software to monitor your financials. They do all the legwork for you.

Each month, your Bench team reconciles your accounts, categorizes your transactions, and produces your financial statements. They also ensure everything is tax-compliant. The cost is high, which will be a deal-breaker for small businesses, but if you are behind in your bookkeeping, you can sign up for a month or two to catch up.

Pros

Cons

  • Dedicated bookkeepers to handle your financials for you
  • 256-bit security to share your accounting information
  • Syncs with all major banks
  • High customer support ratings
  • Expensive
  • No payroll, time tracking, invoicing, or other features (only bookkeeping)
  • Lacks any integrations with other software

Pricing

Bench offers a 30-day free trial (no credit card required).

  • Essential: $299/month ($249/month if paid annually)
  • Premium: $499/month ($399/month if paid annually)

Kashoo Review

Kashoo logoVisit Website

Why weed through a bunch of advanced features you won’t ever use if you can quickly get down to business? Kashoo may be perfect for you if simplicity is what you seek in accounting software.

Based in Canada, Kashoo has kept its approach to accounting simple and streamlined since launching in 2008. Not feature-rich by any means (on purpose), Kashoo does offer most of the basics an independent contractor or micro or small business would want.

However, Kashoo won’t be enough for many small business owners. You can take advantage of the 14-day free trial to decide for yourself – and they offer a money-back guarantee with each plan.

Pros

Cons

  • Real-time dashboard view of business’ financial health
  • Easy-to-use
  • Supports multiple users at no added fee
  • Mobile apps for iOS and Android
  • You can manage up to five businesses from the same account
  • Customer support via live chat, phone, and email (M-F)
  • Payroll only through Paychex integration in the U.S.
  • No CRM integration
  • Very limited add-ons or integrations
  • Can’t manage inventory
  • Doesn’t support multiple currencies
  • No weekend customer support

Pricing

Each plan offers unlimited transactions, invoicing and expense management, automatic bank transaction sync, reporting, and more. Kashoo also offers a 14-day free trial and a money-back guarantee with each plan.

  • Truly Small Invoices – free invoicing only tool
  • Truly Small Accounting – $20/month
  • Kashoo – $30/month

Sage Accounting Review

Sage logoVisit Website

Sage offers several accounting platforms and other business software, but its Business Cloud Accounting is best for small business owners. This cloud-based software has good bookkeeping and basic accounting features and is a steal at $25 per month for its highest plan.

What’s Sage Business Cloud Accounting missing? There’s no time tracking, no project management, and no payroll, but if you don’t need these features and are looking for easy-to-use software, this software could be right for you.

Pros

Cons

  • Sleek, easy-to-use interface
  • Advanced inventory tools
  • 30+ integrations and three payment processors
  • Solid reporting tools
  • Supports multi-currency
  • Good online knowledge base
  • Limited features compared to big names
  • Payroll only available with Sage Payroll for hefty added fees
  • No time tracking or project management

Pricing

Sage Business Cloud Accounting (50cloud) offers a 30-day free trial for either package (no credit card required).

  • Pro Accounting – $56.08/month
  • Premium Accounting – $87.58/month
  • Quantum Accounting – $145.17/month

Promotions

New customers save 40% for the first year.

Wave Accounting Review

Wave Accounting logo

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Self-employed or own a mom-and-pop shop and can’t afford accounting software? Cloud-based Wave could be your solution. Wave’s essential accounting and invoicing functions are entirely free, and they have an impressive number of features for free software — and a lot of usability with their iPhone app.

There are some limitations, and the system can be buggy at times. Customer support is only available via email (and it can be slow), but hey, it’s free. You do get live chat if you pay for add-ons. Overall, Wave is worth looking into if your needs are basic — and you can use it for free for as long as you like!

Pros

Cons

  • Integrate personal and business accounts
  • Credit card processing (on iPhone and iPad as well)
  • A handful of integrations/add-ons – Paypal, Stripe, Etsy, Shoeboxed
  • Community forums, Facebook, Twitter, LinkedIn
  • Great site resources, Help Center, webinars, article, tutorials
  • No cash-based accounting (only accrual)
  • Long wait times (2-7 days) for free email support
  • Can’t set up recurring bill payments
  • No comprehensive Android app
  • Doesn’t support 1099 contractor payments
  • No API for developers
  • Reporting features need improvement

Pricing

Wave accounting offers a free plan plus several add-on services.

Add-ons

  • Payroll tools: $20-$35/month + $6 per employee or independent per month
  • Credit card processing: 2.9% + 30¢ per transaction (Visa, Mastercard, and Discover); 3.4% + 30¢ for American Express
  • Bank payment processing: 1% per transaction

Zoho Books Review

Zoho Books logoVisit Website

Zoho Books has demonstrated a great deal of promise since its rocky launch in 2011 by software powerhouse Zoho. This cloud-based program offers some great features, including excellent invoicing and one of the most functional mobile apps we’ve seen in this industry.

What’s missing? Zoho Books has no payroll features or add-ons (other than with other Zoho software), unlike most other small business accounting software products. This omission could be a deal-breaker and makes Zoho Books best suited for micro- to smaller-sized businesses who does not require payroll as part of their bookkeeping.

 

Pros

Cons

  • Streamlined dashboard lets you view a lot at once without seeming cluttered
  • Excellent invoicing features and tools
  • You can access your dashboard with mobile apps (iOS, Android)
  • Powerful API
  • Customer support via phone, email 24/5 (M-F)
  • Community forums, Facebook, Twitter, LinkedIn
  • Good site resources – webinars, blogs, how-to-guides
  • Only payroll function is tracking subcontractor expenses and preparing 1099s
  • No payroll add-ons/integrations
  • Check printing is an added fee
  • Phone support can have long wait times
  • Lacks advanced project management tools, like document management

Pricing

They offer a 14-day free trial. You can also get two months free if you pay annually.

  • Free: free plan for businesses with less than $50,000 in annual revenues
  • Standard: $10/month/organization
  • Professional: $20/month/organization
  • Premium: $30/month/organization

Common Accounting Mistakes You Can Avoid (Video)

Most small business owners don’t have an accounting background. There are a lot of things to learn about managing your business’ finances. Watch this video to avoid some common mistakes small business owners make when doing their accounting.

More Financial Management Tools For Your Small Business

Another thing to consider is how you want your business to handle payroll. Companies like QuickBooks offer accounting and payroll needs, so you can do two things with one program. Take a look at this payroll software comparison to see if your business could benefit.

We also have reviews of many other small business financial tools, including inventory management software, point of sale software, online lending services, online time clocks, receipt organization, and a guide to self-employment tax deductions.

About The Author:

While attending the University of North Carolina at Chapel Hill’s graduate school for journalism and public relations in the late 1990s, Sally began a long career researching and writing about business, technical and scientific topics.

Her decades of experience as well as a passion to stay on top of the latest online tools and resources combine to help small businesses (and freelancers like herself) flourish. Her work has appeared in many notable media outlets, including The Washington Post, Entrepreneur, People, Forbes, Huffington Post, and more.

Disclaimer: This website contains reviews, opinions and information regarding products and services manufactured or provided by third parties. We are not responsible in any way for such products and services, and nothing contained here should be construed as a guarantee of the functionality, utility, safety or reliability of any product or services reviewed or discussed. Please follow the directions provided by the manufacturer or service provider when using any product or service reviewed or discussed on this website.

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Quickbooks is the better Accounting Software for use. However, there are many accounting software in the market to look for with much more advanced tools available in it.

Out of date pricing and features now sorry. Not relevant.

There are many reasons why I like Slickpie. It allows me to access my clients book and make adjustments to their accounting entries. It provides a great support and online help. It is a free online accounting software, Mostly to send invoices to clients on a daily basis.

The apps I cannot live without – 1. Uber – I have to use it constantly 2. SmartClothed – I never knew how much I need this, until I started using it 3. HBO GO – for when I need to relax after a long day 4. QuickBooks – I need an app to help me take control over my money…What were we doing without smartphones, seriously?