Credits (1)

The 5 Best Accounting Software Options for Your Growing Small Business

The 5 Best Accounting Software Options for Your Growing Small Business

Introduction to Small Business Accounting Software

Accounting software is an essential tool for small businesses to efficiently manage their finances. Proper accounting is crucial for making strategic business decisions, remaining compliant with regulations, and having clarity into the company's financial health. However, many small business owners still rely on spreadsheets or even paper-based bookkeeping. This is time-consuming, prone to errors, and lacks reporting features. Investing in small business accounting software pays dividends through automation, insights, and scalability.

Small business accounting software helps track income, expenses, account balances, and transactions. It generates financial statements like profit and loss, cash flow statements, and balance sheets. Features like invoicing, billing, inventory management, and payment processing are also included. Cloud-based software provides anywhere access via web and mobile apps. This allows collaboration across locations and remote work.

There are a few types of accounting software tailored for small business needs. Entry-level options have basic accounting capabilities and cash flow reports. Mid-level software adds features like inventory and payroll. Robust systems offer advanced customization, consolidation, and industry-specific tools. Choosing the right software depends on the size and complexity of the business. Reviewing costs, features, integrations, and ease-of-use is key to find the best fit. With the right accounting software, small businesses can save significant time and make better financial decisions.

Features of Accounting Software

Accounting software helps small businesses automate many accounting tasks that were traditionally done manually. Key features of modern accounting software include:

Automating Tasks - Accounting software can automatically handle tasks like tracking income and expenses, reconciling bank accounts, sending invoices, managing inventory, generating financial statements, and calculating taxes. This saves small businesses significant time compared to tracking everything manually in spreadsheets.

Cloud Access - Most accounting software today is cloud-based, allowing access from anywhere on any device with an internet connection. This enables staff to enter data and business owners to monitor finances remotely. Cloud software also provides automated backups of data.

Mobile Apps - Many accounting platforms offer intuitive mobile apps in addition to web access. Mobile apps allow owners and employees to manage accounting tasks on-the-go from their smartphones and tablets.

Bank Account Integration - Linking bank, credit card and other financial accounts allows transactions to automatically sync with the accounting software. This eliminates manual entry of transactions.

Invoicing - Accounting programs make it easy to quickly create professional invoices, manage billing and payments, and automate reminders for overdue invoices.

Reporting - Key reporting features include dashboards to monitor financial KPIs in real-time, as well as tools to generate detailed financial statements, profit and loss reports, cash flow reports, tax summaries, and more. The reports provide insights to make informed business decisions.

Types of Accounting Software

Accounting software generally falls into a few main categories:

Cloud-Based vs. Desktop

  • Cloud-based accounting software is accessed online via a web browser. Data is stored on remote servers maintained by the software provider. Cloud-based software offers advantages like automatic updates, easy access from any device, and collaboration features. However, it relies on an internet connection.

  • Desktop accounting software is installed directly onto computers. Data is stored locally. Desktop software does not require an internet connection. However, updates need to be installed manually. Desktop software may offer better performance when working with large local datasets.

Free vs. Paid Options

  • Many accounting platforms offer free versions with limited features. These can work for basic accounting needs.

  • Paid versions provide additional features like advanced reporting, invoicing, inventory management, and integration with other software. Paid accounting platforms are best for growing businesses with more complex needs.

Industry-Specific Software

  • Some accounting software is tailored for specific industries and business types like:

    • Retail
    • Nonprofit
    • Service-based businesses
    • Manufacturing
    • Farming
    • Restaurants
  • Industry-specific software has tools and reports geared toward the needs of those businesses. This allows for greater efficiency and convenience.

QuickBooks, Xero, FreshBooks, Zoho Books, and Wave are some of the most popular small business accounting software options on the market today.


QuickBooks is made by Intuit and is the most widely used small business accounting software. It offers a robust set of features for tasks like invoicing, expense tracking, inventory management, and reporting. QuickBooks is available in online and desktop versions.


Xero is a cloud-based accounting solution that focuses on ease of use. It has beautiful dashboards and reporting features. The online version starts at $9 per month. Xero integrates with hundreds of third-party business apps.


FreshBooks is an online invoicing and time tracking service designed for service-based small businesses. It offers double entry accounting, expense management, and project costing. FreshBooks mobile apps are user-friendly.

Zoho Books

Zoho Books is an affordable, cloud-based accounting software with invoice creation, time tracking, expense monitoring, and other features. It connects with other Zoho business apps. The basic plan is free for a single user.


Wave Accounting is a free, cloud-based accounting platform for invoicing, payments, accounting, and payroll. There is also a tax preparation service. Wave is best for very small, simple businesses just starting out.

Choosing the Right Software

Choosing the accounting software that's right for your small business can feel overwhelming with all the options available today. Here are some key factors to consider when evaluating accounting software:

Consider Business Size and Needs

Think about the size of your business, number of employees, and what accounting features you require. A microbusiness may only need basic invoicing and expense tracking, while a larger company may benefit from more advanced inventory management and reporting. Make sure the software scales with your expected business growth.

Compare Features and Prices

Create a checklist of must-have features like invoicing, financial reporting, and payroll. Then compare software options to see which provide those features. Also consider the pricing structure - subscription, one-time fee, or free plan. Calculate the total cost of ownership over time.

Look for Ease of Use

The software should be intuitive and easy to use for non-accounting staff. Look for simple navigation, tooltip guides, and online training resources. The easier it is to implement the software, the faster your team can be productive.

See If There Is Mobile Access

Consider whether you need to access the accounting platform and data via a mobile app. Remote access can be helpful for business owners and employees on the go. Review mobile app ratings and functionality before choosing software.

Choosing accounting software takes research to find the right solution for your small business's budget and needs. But the upfront investment of time will pay off with greater efficiency, insights, and cost savings over the long term.

Implementation and Training

Implementing new accounting software takes careful planning and training to ensure a smooth transition. Here are some key steps to take:

Data Migration

  • Work with your software provider to map data from your old system to the new system. Identify any data that will need cleansing or reformatting beforehand.

  • Set a cutover date and have your provider assist with migrating historical data to the new system. Confirm everything transfers correctly.

  • Plan for running parallel systems for a short period during implementation to catch any data discrepancies between old and new systems.

Learning the Software

  • Create a training plan and schedule for your accounting team. Include both initial and ongoing training.

  • Take advantage of resources offered by your software provider, such as live training, videos, user communities, and support articles.

  • Identify power users on your team who can learn the software in-depth and assist others. Allow time for self-paced learning and experimentation.

Getting Staff Onboard

  • Communicate timelines and training plans to alleviate anxiety among staff around learning a new system.

  • Involve staff in software selection and implementation planning so they feel invested in the process.

  • Start users off slowly as they learn. Then progressively give them access to more modules and functionality.

  • Designate internal experts and mentors to provide ongoing support and answer user questions after implementation.

Integrating Accounting Software with Other Business Tools

Accounting software becomes even more powerful when integrated with other systems used to run your business. Modern solutions make it easy to connect your accounting platform with other tools to enable seamless workflows and free up more time for strategic tasks.

Some key integrations to consider include:

  • Point of Sale (POS): Integrate your POS system and sync all sales in real time to your accounting software. This eliminates manual data entry and provides up-to-date visibility into revenue and sales trends.

  • Payroll: Connect payroll to sync employee data, compensation, and tax information. This automates paycheck calculations and payments based on hours logged in the POS or time tracking system.

  • CRM: Sync customer details and invoices directly from your CRM to accounting. This provides a single source of truth for client data.

  • Inventory: Integration with inventory management provides real-time tracking of stock levels and automates purchase orders as inventory depletes.

  • Banking: Automatic bank feeds and integration with payment processors enables up-to-date financial reporting. Transactions are categorized and reconciled automatically.

  • Bill Pay: Pay bills directly within your accounting platform to eliminate manual processes. Bills can be scheduled for auto-payment as well.

  • Email/Calendar: Receive invoice reminders and payment receipts via email or calendar. Easily share invoices and financial statements right from your accounting platform.

  • 3rd Party Apps: Many accounting platforms offer integrations with hundreds of popular apps to connect every system you use to run your business.

Leveraging integrations ensures your systems "talk" to one another to eliminate duplicate data entry and manual processes. This saves significant time, reduces errors, and enables smarter business decisions with data flowing seamlessly across all platforms.


Accounting software handles sensitive financial data, so security is a top concern when evaluating options. Cloud-based software introduces unique security considerations compared to desktop packages.

Cloud Security

With cloud-based accounting platforms, data is stored on remote servers operated by the software provider. This removes security responsibilities from the small business, but relies on the provider to manage authentication, encryption, infrastructure security, and more. Research the provider's security standards, certifications, and protocols.

Data Protection

At a minimum, accounting software should use SSL/TLS encryption for data transmission and logins. Data at rest in the cloud should also be encrypted. Review what protective measures are in place and the provider's policies for security breaches or data incidents.


While cloud services take care of real-time backups, small businesses should still consider how they will download and store their own periodic backups for redundancy. Confirm that the software allows data export and backups outside of the cloud environment. Local backups are important in case of service outages or disruptions.


To get the most out of your small business accounting software, you'll need to devote some time to ongoing maintenance. Here are some key maintenance tasks to stay on top of:

Software Updates

  • Accounting software publishers regularly release updates to fix bugs, patch security flaws, and add new features. It's important to promptly install these updates so you are always running the latest and most secure version. Often the software can update itself automatically in the background.

Ongoing Training

  • When your team is first getting started with the accounting software, provide adequate training resources and documentation. But don't stop there - offer periodic refresher trainings as your business needs evolve. Advanced features and new workflows will require additional learning.

Tech Support

  • Even after thorough training, your team may occasionally need help troubleshooting technical issues or solving problems. Take advantage of the publisher's technical support resources by phone, email or online chat. Paid support packages can provide faster response times for immediate issues.

Staying current with regular maintenance will help you maximize the return on investment from your accounting software and allow you to fully leverage its capabilities.


Choosing the right small business accounting software is a crucial decision that can have significant long-term impacts on your company's growth and success. This article has covered the key features to look for, from invoicing and billing to inventory and payroll management. We've also explored the pros and cons of desktop vs cloud solutions as well as highlighting popular software packages like QuickBooks, Xero and FreshBooks.

When evaluating options, focus on finding a solution that aligns with your business's size, industry and specific needs. Prioritize core accounting capabilities as well as ease of use, accessibility and scalability. Don't forget about implementation and training costs in your decision making process. Leveraging integrations with other business apps can maximize productivity.

As the small business accounting software landscape continues evolving, expect to see even more sophisticated AI and automation capabilities. The goal is to not only digitize manual processes but to provide real-time financial insights that empower better decision making. With the right solution in place, you can focus less on accounting busy work and more on profitably growing your business.

See all postsSee all posts