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 often offensive “a word.” 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.

FreshBooks Review

#1

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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

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 5 clients
  • Plus: $25/month for 25 clients
  • Premium: $50/month for 500 clients
  • Select: Contact FreshBooks
  • $10/month/person for additional 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
  • 700+ add-ons/integrations, including Salesforce, PayPal, Fathom, Square and Stripe
  • Payroll tool with Premium Plans allows for 10 employees, direct deposit and e-file payroll taxes (Standard Plan allows for 5 employees)

**Xero Payroll will be unavailable in the U.S. as of December 31, 2018. (Their payroll services are moving to Gusto).

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.

  • Starter plan: $9 per month (limited to 5 invoices and 5 bills per month)
  • Standard plan: $30 per month
  • Premium plan: $70 per month

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 Online Review

#3

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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

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 Quick Books Payments. If you opt to purchase without using the free trial, you get the first 3 months at 50% off.

 Self-EmployedSimple StartEssentialsPlus
Price Per Month$10$20$35$60
Number of Users1135
Price Per Month w/ Enhanced PayrollN/A$59+$2/Employee$74+$2/Employee$99+$2/Employee
Price Per Month w/ Full Service PayrollN/A$119+$2/Employee$134+$2/Employee$159+$2/Employee

Coupon

[quickbooks-coupon]

Comparison Table

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

 1st Place: FreshBooks2nd Place: Xero3rd Place: QuickBooks OnlineIONOSBenchKashooSageWaveZoho Books
FreshBooksXeroQuickBooks OnlineIONOSBenchKashooSageWaveZoho Books
Read ReviewRead ReviewRead ReviewRead ReviewRead ReviewRead ReviewRead ReviewRead ReviewRead ReviewRead Review
Visit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit Website
Visit WebsiteVisit Website
Visit WebsiteVisit Website
Free Trial30 Days30 Days30 DaysNone30 Days14 Days30 DaysFree Plan14 Days
Lowest Price Per Month$15.00$9.00$20.00$5$115$29.95$10Free Plan$9.00
Highest Price Per Month$50.00+$70.00$60.00$25$295$29.95$25Free Plan$29.00
Number of Clients5-unlimitedUnlimitedUnlimitedUnlimitedN/AUnlimitedUnlimitedUnlimited50-Unlimited
Number of Users1 ($10/additional user/month)Unlimited1-51-10UnlistedUnlisted1-UnlimitedUnlisted2-10
Accountant AccessCheckmarkCheckmarkCheckmarkCheckmarkUnlistedCheckmarkCheckmarkCheckmarkCheckmark
Multiple CurrencyCheckmarkCheckmarkCheckmarkUnlistedCheckmark
Number of InvoicesUnlimitedUnlimitedUnlimitedUnlimitedN/AUnlimitedUnlimitedUnlimitedUnlimited
Customizable InvoicesCheckmarkCheckmarkCheckmarkCheckmarkN/ACheckmarkCheckmarkCheckmark
Print & Mail InvoicesCheckmarkCheckmarkCheckmarkN/ACheckmark
Credit Card ProcessingCheckmarkCheckmarkCheckmarkN/ACheckmarkCheckmarkCheckmarkCheckmark
CRM IntegrationCheckmarkCheckmarkCheckmarkCheckmark
Supports PayrollIntegration OnlyCheckmarkAdditional ChargeIntegration OnlyIntegration OnlyAdditional Charge
Supports Contract PaymentsIntegration OnlyCheckmarkAdditional ChargeIntegration OnlyIntegration Only
Payroll TaxIntegration OnlyCheckmarkAdditional ChargeIntegration OnlyIntegration OnlyAdditional ChargeCheckmark
Prints ChecksIntegration OnlyCheckmarkAdditional ChargeCheckmarkIntegration OnlyAdditional ChargeAdditional Charge
Prepares 1099sIntegration OnlyCheckmarkAdditional ChargeIntegration OnlyIntegration OnlyCheckmark
Recurring Bill PayerCheckmarkCheckmarkCheckmarkCheckmarkCheckmark
Sync with Bank AccountsCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmark
Number of Reports20+40+65+2Financial Statements Each Month723930+
Budget ManagerCheckmarkCheckmarkCheckmarkCheckmark
InventoryCheckmarkCheckmarkCheckmarkCheckmarkCheckmark
Auto BackupCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmark
Mobile AppsCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkiPhone OnlyCheckmark
TutorialsCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmark
Community ForumsCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmarkCheckmark
Customer SupportM-F: 8am-8pm ET phone & email ticket24/7 email24/7 chat support24/7 phone & emailVia phone & emailM-F: 6am-5pm PT phone, email, live chatPhone, email, live chatEmail; live chat for paying customersM-F: 24 hours phone & email
Visit WebsiteVisit WebsiteVisit Website
Visit WebsiteVisit WebsiteVisit Website
Visit WebsiteVisit Website
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Read ReviewRead ReviewRead ReviewRead ReviewRead ReviewRead ReviewRead ReviewRead ReviewRead ReviewRead 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.

IONOS | BenchKashoo | Sage Accounting | Wave Accounting | Zoho Books

IONOS Review

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IONOS (previously 1&1) is best known for its web hosting and domain name services but has recently added a cloud-based set of bookkeeping packages. The software is a breeze to use and navigate, and you get 24/7 customer support. All pricing plans, however, lack several features you’ll get with alternative software (and often at a lower price).

Plans start with Invoice, a bare-bones package that only prepares quotes and invoices. Their middle-tier plan adds cashbook management, scan and capture apps, document filing, an overview of cost centers and separate access for employees and tax advisors. IONOS’s highest plan adds warehouse and stock management tools.

If you’re looking for simplicity, IONOS Accounting is a good choice, but we think it’s overpriced for what you get.

Pros

Cons

  • Intuitive, easy-to-use interface
  • Converts estimates to invoices
  • Manage cash book online
  • Cost overview management
  • Good inventory management tools
  • 24/7 customer support
  • 30-day money back guarantee
  • Pricey for its lack of features
  • Lacks integrations with payroll, CRM, and other third-party apps
  • Very limited reporting and online knowledgebase
  • Lacks time tracking
  • Doesn’t support multiple currencies

Pricing

IONOS Accounting offers a 30-day money back guarantee.

 InvoiceAccountingInventory Manager
IncludesQuote & InvoicesQuotes & Invoices
+ Online Accounting
Quotes & Invoices
+ Online Accounting
+ Inventory Manager
Price Per Month$5$15$25
Number of Users1310

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 a lot of small businesses, but if you’re 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). The following prices are if you pay annually.

  • Micro Plan: $115/month
  • Boutique: $165/month
  • Venture: $215/month
  • Corporate: $295/month

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.

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 5 businesses from 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.

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

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 an easy-to-use software, this software could be right for you.

Pros

Cons

  • Sleek, easy-to-use interface
  • Advanced inventory tools
  • 30+ integrations and 3 payment processors
  • Solid reporting tools
  • Supports multi-currency
  • Good online knowledgebase
  • 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 offers a 30-day free trial for either package (no credit card required).

Accounting Start

  • $10/month
  • 1 user

Accounting

  • $25/month
  • Unlimited users

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 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)
  • 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 + $4 per employee per month
  • Credit card processing: 2.9%+30¢ per transaction
  • Bank payment processing: 0.1% 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 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
  • 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 2 months free if you pay annually.

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

What Are Some Common Accounting Mistakes To Avoid?

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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newest oldest most voted
Prashant Patel
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.
Tim goodwin
Out of date pricing and features now sorry. Not relevant.
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
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?