Small Business Accounting Needs
Accounting platforms are typically built around a general ledger that supports double-entry bookkeeping. While the foundation is similar across products, each accounting software provider designs its own workflow for capturing transactions, organizing records, and producing reports.
Small businesses commonly use accounting software for day-to-day bookkeeping, producing financial statements, creating invoices, tracking bank and credit card activity, organizing purchase records, running payroll (where supported), and monitoring cash flow.
Accounting Solutions for Small Businesses
Business owners and their accountants use accounting software to track transactions and generate financial reports for operational and decision-making purposes. In some cases, the software includes these capabilities natively. In other cases, third-party services integrate with the accounting platform to extend functionality.
Regardless of the setup, there are core functions that many small businesses expect from an accounting software solution.
Common Accounting Software Features
- Inventory management
- Invoicing and billing
- Financial reporting
- Payroll
- Revenue analysis
- Fixed assets
- Accounts payable and accounts receivable
Which Accounting Software Should You Choose?
When shopping for the software that fits your business best, it is advisable to review the program’s support portal and product documentation and ask questions about which plan best matches your needs. Key considerations often include cost, ease of use, training resources, customer support responsiveness, plan limitations, accountant access, compatibility with payment tools, transaction processing capabilities, and tax-related reporting support.
What Are the Pricing Options for Accounting Software?
Pricing typically depends on the size and complexity of the business and the features included in the plan. Most accounting software products are offered as monthly subscriptions, and many entry-level plans for small businesses are priced under $100 per month. Higher-tier plans often add multi-user access, automation, advanced reporting, inventory features, or payroll-related capabilities.
Leading Small Business Accounting Software Options
Below is an overview of widely used accounting software solutions for small businesses. Descriptions are based on information published on each provider’s official website.
Wave Accounting
Wave Accounting provides cloud-based bookkeeping, invoicing, and expense tracking. According to the provider, Wave includes a free starter option for core accounting features, with optional paid services available.
FreshBooks
FreshBooks focuses on invoicing, time tracking, and expense management. The provider states that FreshBooks offers a free trial and subscription-based plans designed to support client billing and project-based workflows.
QuickBooks Online
QuickBooks Online is a cloud-based accounting platform offering invoicing, expense tracking, bank connectivity, and financial reporting. Intuit publishes multiple subscription tiers with varying feature sets for small and growing businesses.
Zoho Books
Zoho Books offers online accounting tools including invoicing, expense tracking, bank reconciliation, and reporting. According to the provider, Zoho Books includes multiple plans and a free option for eligible small businesses.
Xero
Xero is a cloud-based accounting solution that includes bank reconciliation, inventory features, and multi-user access. Xero states that it offers a free trial and tiered subscription plans.
Sage Business Cloud Accounting
Sage Business Cloud Accounting provides accounting tools such as invoicing, cash flow management, and reporting. Sage indicates on its website that a free trial is available.
