Best Small Business Accounting Software: Xero vs Freshbooks vs Quickbooks vs Wave

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FreshBooks logo
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Xero logo
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QuickBooks logo

As a small business owner, there’s simply no way to avoid this “a” word. Accounting is an often dreaded task, but it doesn’t have to get you down! In fact, investing in the right small business accounting software program could save you a ton of time and money. It will also help you ditch all those paper receipts, calculators and endless paperwork. But how do you know which program will suit your needs when there are so many products to choose from? We’ve done the legwork to make recommendations for the best small business accounting software.

What is 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 for Best Small Business Accounting Software, from pros and cons and available features to pricing and customer support.

FreshBooks Review

#1

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FreshBooks takes our top spot for this small business accounting software comparison and ranks better than Quickbooks and Xero. FreshBooks, a cloud accounting software, 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 5 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. Fresh books 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. Fresh Books 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 and small service-based businesses
  • Robust API for developers
  • 50+ add-ons/integrations, including Paypal, Zapier, wufoo, Live Chat, Mailchimp and more
  • Snail mail invoicing option
  • Customer Ratings and Reviews feature for your clients to rate you
  • Referral program lets you refer other users and accrue free months
  • Credit card processing, even with mobile app

Pros

Cons

  • Converts estimates to invoices
  • Can see when customers view their invoices
  • Phone, email, blog, FAQ, tutorials support
  • Award-winning customer support team
  • Great time tracking feature shows overages on projects
  • Multi-currency support
  • No full-service accounting version option to upgrade
  • No weekend customer service hours
  • Payroll functions only through app integrations – Zen Payroll or Payment Evolution
  • Past invoice organization is cumbersome

Pricing

Try them for free with their 30-day free trial. All plans include free customer service, import and export data, credit card processing, and data backup.

  • Sprout plan: $12.95 per month; 5 clients, 1 user
  • Seedling plan: $19.95 per month; 10 clients, 1 user

Upper-level pricing includes Project Managers, Team Timesheets, Team Expense Reporting

  • Evergreen plan: $29.95 per month; unlimited clients; 1 user
  • Mighty Oak plan: $39.95 per month; unlimited clients; 2 users

Coupon

There are no active FreshBooks coupon codes at this time

Read Our Full Review of FreshBooks

Xero Review

#2

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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! It’s 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 greatest features is a “feature request” in their community forum, and long-time Xero customers say they really do act on feedback by continually improving their software adding new features frequently.

Key Features

  • Best for small to mid-sized businesses
  • Full-accounting features and tools
  • Supports multiple currencies and tax rates
  • 500+ add-ons/integrations, including Salesforce, PayPal, Fathom, Square and Stripe
  • Payroll tool with Premium Plan allows for 10 employees, direct deposit and e-file payroll taxes (Standard Plan allows for 5 employees)

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
  • Full electronic payroll only available in CA, FL, NJ, NY, TX, UT & VA
  • Reporting tools have room for improvement
  • No phone support

Pricing

Try out Xero with their 30-day free trial.

  • Starter plan: $9 per month; $37.80 for 6 months
  • Standard plan: $30 per month; $126 for 6 months
  • Premium plan: $70 per month; $294 for 6 months

Coupon

Xero is offering a special introductory offer: get 30% off the first six months with code XERO30! Nonprofits can receive 25% off all Xero plans. Use this link to take advantage of these offers!

Read our Full Review of Xero

QuickBooks Review

#3

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Intuit QuickBooks rounds out our top three picks for 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. And 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

Pros

Cons

  • Can upgrade to QuickBooks Enterprise when your business grows
  • Inventory tools and payroll with higher paid versions
  • Mobile apps for iOS and Android devices
  • You can photograph your receipts and incorporate into expenses
  • Payroll plans are a significant added fee per month
  • Interface not as user-friendly as other accounting software products
  • No email customer support
  • Site support is largely limited to community forums
  • 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 Quick Books Payments.

  • Self-Employed Plan: $10 per month; 1 user
  • Simple Start Plan: $13 per month; 1 user
  • Essentials Plan: $27 per month; 3 users
  • Plus Plan: $40 per month; 5 users
  • Essentials Enhanced Payroll: $66 + $2 per employee per month
  • Plus Enhanced Payroll: $79 + $2 per employee per month
  • Essentials Full Service Payroll: $126 + $2 per employee per month
  • Plus Full Service Payroll: $139 + $2 per employee per month

Coupon

Get up to 50% off of Intuit Quickbooks for your first six months by using this link

Comparison Table

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

 FreshBooksXeroQuickBooksKashooWaveZoho Books
FreshBooksXeroQuickBooksKashooWaveZoho Books
Read ReviewRead ReviewRead ReviewRead ReviewKashoo ReviewWave Accounting ReviewZoho Books Review
Visit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit Website
Free Trial30 Days30 Days30 Days14 DaysFree Plan14 Days
Lowest Price Per Month$12.95$9.00$13.00$29.95Free Plan$9.00
Highest Price Per Month$39.95$70.00$40.00$29.95Free Plan$29.00
Number of Clients5-unlimitedUnlimitedUnlimitedUnlimitedUnlimited50-Unlimited
Number of Users1-2Unlimited1-51-20Unlisted1-Unlimited
Accountant AccessCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmark
Multiple CurrencyCheckmarkCheckmarkCheckmarkCheckmarkCheckmark
Number of InvoicesUnlimitedUnlimitedUnlimitedUnlimitedUnlimitedUnlimited
Customizable InvoicesCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmark
Print & Mail InvoicesCheckmarkCheckmarkCheckmarkCheckmark
Credit Card ProcessingCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmark
CRM IntegrationCheckmarkCheckmarkCheckmarkCheckmark
Supports PayrollIntegration OnlyCheckmarkAdditional ChargeIntegration OnlyAdditional Charge
Supports Contract PaymentsIntegration OnlyCheckmarkAdditional ChargeIntegration Only
Payroll TaxIntegration OnlyCheckmarkAdditional ChargeIntegration OnlyAdditional ChargeCheckmark
Prints ChecksIntegration OnlyCheckmarkAdditional ChargeCheckmarkAdditional Charge
Prepares 1099sIntegration OnlyCheckmarkAdditional ChargeIntegration OnlyCheckmark
Manual JournalCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmark
Recurring Bill PayerCheckmarkCheckmarkCheckmarkCheckmarkCheckmark
Sync with Bank AccountsCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmark
Number of Reports20+40+65+7930+
Budget ManagerCheckmarkCheckmark
InventoryCheckmarkCheckmarkCheckmark
Auto BackupCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmark
Mobile AppsCheckmarkCheckmarkCheckmarkCheckmarkiPhone OnlyCheckmark
TutorialsCheckmarkCheckmarkCheckmarkCheckmarkCheckmark
Community ForumsCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmark
Customer SupportM-F: 8am-8pm ET phone & email form24/7 emailM-F: 6am-6pm PT phone onlyM-F: 6am-5pm PT phone, email, live chatM-F: 9am-5pm ET email (upgrade for phone, live chat)M-F: 24 hours phone & email
Visit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit Website
Read ReviewRead ReviewRead ReviewRead ReviewKashoo ReviewWave Accounting ReviewZoho Books Review

Other Best Small Business Accounting Software Reviews

On average, only half of small businesses survive after five years and one-third after 10 years, according to an article from The Washington Post. Of course, there are many reasons for the longevity of a small business, 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 suits your needs perfectly. Click on one of the links below to see the other accounting software for small business.

Kashoo Review | Wave Accounting Review | Zoho Books Review

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 their 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. It’s an incredibly quick and easy-to-use program that has a pretty good bang for the few bucks you’ll pay each month, with pricing starting at only $5 per month. 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
  • Bank level security
  • Excellent iPad app (most downloaded accounting app on Apple App store)
  • Mobile apps for iOS and Android
  • You can manage up to 5 businesses from same account/same price
  • Customer support via live chat, phone and email (M-F)
  • Payroll only through Paychex integration in the U.S. (several others for Canada)
  • 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.

  • $29.95 per month (no contract required)
  • $199.95 per year

Wave Accounting Review

Visit WebsiteWave Accounting logo

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 and iPad apps. There are some limitations, and the system can be buggy at times. Customer support is only available via email (and it can be slow), or you can upgrade to live chat and phone (for a fee). 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)
  • Handful of integrations/add-ons – Paypal, Stripe, Wave Payroll, Etsy, Shoeboxed
  • Supports multi-currency
  • 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 Android app
  • Doesn’t support 1099 contractor payments
  • No API for developers
  • Reporting features need improvement

Pricing

  • Free plan
  • Payroll tools: $15.00 + $4 per employee per month
  • Customer support upgrades:
  • Plus Package: $9.00 per month (Live chat)
  • Advanced Package: $19.99 per month (Phone and live chat)

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, unlike most other small business accounting software products. This omission could be a deal breaker and makes ZohoBooks best suited for micro- to smaller-sized businesses who don’t 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
  • No check printing feature
  • Phone support can have long wait times
  • Lacks advanced project management tools, like document management

Pricing

They offer a 14-day free trial.

  • Basic plan: $9/month/organization
  • Standard plan: $19/month/organization
  • Professional plan: $29/month/organization

What Are Some Common Accounting Mistakes Small Businesses Make?

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.

Other Financial 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 and receipt organization.

Which accounting software do you use and what do you like and dislike about it?

Sally has coupled her passion for writing with her (slight) obsession for the latest high tech gadgets. While she’s not daydreaming about the beach, she’s taking advantage of all the activities her hometown has to offer in the Blue Ridge foothills.

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3 Comments on "Best Small Business Accounting Software: Xero vs Freshbooks vs Quickbooks vs Wave"

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Tim goodwin
Tim goodwin

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

Mera C.K. Diaz
Mera C.K. Diaz

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.

Melody
Melody

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?

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