Accounting Software for Small Businesses: Which One is Right for You?
Today’s fast-paced business landscape often puts small businesses at a disadvantage. Staying organized, efficient, and financially healthy is crucial to getting through the first five years of operations. This period is generally considered critical for business growth and success.
A must-have in every business owner’s toolkit is accounting software. Accounting software makes day-to-day operations more manageable and helps you stay on top of business finances. Having an advanced tool to help you manage invoices, run payroll, keep your books up-to-date, and prepare taxes will save you time, reduce mistakes, and help your business grow.
There are tons of options available; so, how do you choose the right one for your needs?
As a Certified QuickBooks ProAdvisor, I’m eager to share my top choices for small business accounting software.
Best Small Business Accounting Software: What Are Your Options?
Not all accounting software programs are the same. You need to look at the following factors to help you identify software that will best suit your small business needs:
- Efficiency. Your chosen software should allow automation of basic accounting tasks, such as invoicing, payroll, and financial reporting.
- Accuracy. The best software miminizes human error and ensures clean and audit-ready books.
- Integration. Your software should allow seamless integration with your point-of-sale (POS) systems, payroll platforms, and banks.
- Compliance. The right software simplifies tax filing and keeps up-to-date with federal and state regulations.
Let’s take a look at the most popular accounting software options available right now.
QuickBooks Online
Most suitable for: Small- to mid-sized businesses
Price: $30-$200/month
As a Certified QuickBooks ProAdvisor, I always recommend QuickBooks Online to my clients. QuickBooks for small businesses offers an all-in-one solution with a good balance of power and ease of use. It’s also the top accounting software choice for most businesses and accounting professionals because of its strong customer support and community backing.
Pros:
- Industry leader with robust features
- Seamless integration with POS, payroll, and third-party apps
- Scalable for growing businesses
- Real-time collaboration with accountants
- Mobile app option for on-the-go access
Cons:
- More expensive than other accounting software programs
- Learning curve for beginners
Gusto
Most suitable for: Payroll and HR processes
Price: $40-$80/month + $6-$12/employee
Gusto is a great choice for businesses that need a reliable software program for payroll and HR processes. Businesses with a significant workforce can benefit from the software’s specialized administrative capabilities, automating processes that take a huge chunk off your administrative plate.
Pros:
- Excellent payroll and benefits administration
- Employee onboarding and time tracking
- Integrates with QuickBooks, Xero, and other similar programs
- Compliance alerts and tax filing
Cons:
- Only ideal as a payroll add-on
- Limited accounting features; not a complete accounting suite
Xero
Most suitable for: Tech-savvy users looking for an alternative to QuickBooks
Price: $15-$78/month
Xero is a solid, intuitive, and modern option for tech-savvy users. The program is particularly popular outside the U.S., but has started gaining traction in the country in recent years.
Pros:
- Clean and elegant user interface
- Automated bank feeds and reconciliation
- Strong third-party app ecosystem
- Unlimited users on all plans
Cons:
- Limited features in lower-tier plans
- Limited U.S.-based customer support options
FreshBooks
Most suitable for: Service-based business and solo professionals
Price: $19-$60/month
FreshBooks simplicity makes it great for beginners, particularly creatives, consultants, solo professionals, and micro- to small-sized businesses. This beginner-friendly accounting software is a good option if you only need help with basic bookkeeping tools
Pros:
- User- and beginner-friendly interface
- Solid time tracking and invoicing features
- Good for client portals, expense tracking, and project-based billing
Cons:
- Limited inventory management
- No payroll feature; requires third-party integration
Wave
Most suitable for: Micro-businesses and startups on a tight budget
Price: Fee; with paid add-ons for payroll and payments
Wave is another excellent option for beginners, especially if you’re a new business with a limited budget. As your business needs become more complex, however, you’ll most likely outgrow the software and require a more advanced program.
Pros:
- Accounting, invoicing, and receipt scanning features are free
- Simple interface
- Ideal for sole proprietors
Cons:
- Fewer features and integrations
- Limited scalability
- Customer service is sometimes slow
Choosing the Right Accounting Software: Frequently Asked Questions
What software is best for POS integration?
If POS is a core process in your business, you need an accounting software that seamlessly syncs with your POS. The right software will help make day-to-day operations more efficient and deliver long-term financial clarity.
Choose a software program that can sync sales, manage inventory, and automatically update your books. POS integration saves you hours of manual entry and ensures real-time accuracy.
Here’s how each of our select accounting software programs delivers:
- QuickBooks. The software integrates with popular POS systems, like Shopify, Square, and Clover. It allows automatic syncing of sales data, inventory updates, and customer information.
- Xero. This is a good option if you need to integrate with Shopify, Vend, or Lightspeed. Integration with Xero helps streamline inventory and sales management.
- FreshBooks and Wave. These programs only offer basic invoice and payment features, and limited POS integration which typically requires a third-party app.
What accounting software is most suitable for payroll and HR?
QuickBooks and Xero have reliable payroll features. However, Gusto offers better HR automation. The software is best used as an add-on and integrated with your preferred accounting software to build a more robust ecosystem.
Gusto offers the following special features:
- Full-service payroll in all 50 states
- W-2s and 1099s
- Employee benefits administration
- Time-off and PTO tracking and management
- Compliance and labor law alerts
Do I still need to work with an accountant when I have accounting software?
If you choose QuickBooks as your accounting software, you should consider working with a Certified QuickBooks ProAdvisor. They can provide expert guidance on the following:
- Choosing the right QuickBooks version for your business needs
- Customizing your chart of accounts and workflows
- Optimizing integrations and troubleshooting issues
- Ensuring your data is accurate, clean, and tax-ready
- Providing training for you and your team
Final Thoughts
When choosing the best accounting software for your business, consider your business’s size, industry, budget, and future plans. The right software should align with how your business operates, offer flexibility to grow with you, and make your life easier.
Do you need help getting started? Bayshore Accounting offers professional and personalized advisory to match your business with the right tools and help set you up for success.
Contact us today to schedule your accounting software consultation!
