Choosing the Best Accounting Software for Small Business

Choosing the Best Accounting Software for Small Business

The market for small business accounting software is growing and has a lot to offer. There’s one thing for sure — committing to any software is going to require research and analysis of the things you need from such a system. It’ll help you if you decide early on whether you’ll need to process payroll, accept payments using your accounting software, and maintain an inventory. Answering these questions will help you finalize the top contender list and choose the best accounting software for a small business.

What is the best accounting software?

There are many small business accounting software options. Some of them are free, while others are only available by purchasing an annual subscription. 

There’s a number of questions to consider. Would you like to keep your information in the cloud, or is desktop-based service better for your specific security requirements? Will you be recording inventory? Is it important for you to automate various workflows or would you like to manually perform those repetitive processes? What kind of subscription would you prefer: monthly or annual?

Here are some tips on how to choose accounting software for your business:

1. Keep in mind your budget limitations 💸

Getting accounting software is great not only for your business, but also for you. Manual tasks become automatic and you free up time to analyze and create new growth strategies. But a penny saved is a penny earned, so don’t act recklessly when choosing accounting software for small business. 

2. Make a list of the must-have features 📝

There are a bunch of different small business accounting software solutions and deciding which one suits you best can be difficult, so it’s important to make a list of required features. Since some solutions even vary depending on the business, you must be as specific with your needs as possible.

3. Consider your accounting skills or consult your accountant ⚖️

You definitely don’t want to mess things up on the first day of using your accounting software. That’s why you need to clarify whether you or your accountant will be able to manage everything yourself, or whether the company provides users with a thorough demo session and helps to connect all your platforms.

📌 Note: when using some small business accounting software solutions, there might be an extra fee for more than one user per account. 

Benefits of implementing accounting software into your business routine

The most inefficient and time-consuming business tasks are often related to bookkeeping, accounting, and financial reporting. What’s more, they can be rather costly. 

Here’s what you’ll gain when using small business accounting software:

  • One place to store all the financial information about your business.
  • More free time to create new strategies since the accounting operations are mostly done in the background and don’t need your assistance.
  • Automated recording of your sales from more than one platform due to integrations.
  • Higher accuracy of the final reports.
  • Additional unique features that’ll ease your accounting tasks A LOT. 

Now let’s consider 6 small business accounting software solutions that might interest you.

List of accounting software solutions

In this part you’ll find details about the following small business accounting software options:

1. Freshbooks

2. Wave

3. QuickBooks Desktop

4. Synder Accounting

5. Xero

6. QuickBooks Online

Freshbooks

Best for: service-based companies

FreshBooks is a cloud accounting software that helps small businesses manage their expenses and get paid faster. It’s easy to use, affordable and made for small business owners. Freshbooks can help you track time, invoice clients, manage your expenses, and even generate reports. 

Accounting software top features:

  • Customized invoicing
  • Expense recording
  • In-app estimates and proposals
  • Checkout links

✔️ Pros:

  • Operates safely and robustly with large amounts of information
  • Project management
  • Real time invoice tracking

❌ Cons:

  • The accounting side is not as developed as the invoicing
  • Mobile version has issues when working with some features
  • No ability to customize interest/late fees per client or per invoice

Wave

Best for: small business owners looking for free software to manage their finances

Wave accounting software is famous among new service-based business owners. The reason behind this is that you can do quite a lot of accounting for free. It’s truly the ultimate free small business accounting software for many users.

Accounting software top features:

  • Recurring invoices
  • Auto-categorization 
  • Expense tracking
  • Inventory management

✔️ Pros:

  • Free and easy to use
  • Cloud-based so you can have access from anywhere
  • Unlimited users

❌ Cons:

  • Slow payment speed
  • Payroll is shown in summary (not per person)
  • There might be some issues with bank and credit card connection

QuickBooks Desktop

Best for: mid and large-sized businesses who don’t need high mobility

 Most people in the tech world would say that the future belongs to cloud applications, but the popularity of QuickBooks Desktop shows that there’s still a place for it in the accounting world. This accounting software may be overwhelming if your business is very small. But if you’re looking for a stable solution and don’t need high mobility of having your data in the cloud, QuickBooks Desktop may be a good option for you. 

Accounting software top features:

  • Automated payment reminders
  • Receipt management
  • Invoice history tracking
  • Payroll liability reminders

✔️ Pros:

  • Memorized transactions
  • Easy invoice tracking
  • Lots of templates and formatting forms

❌ Cons:

  • Sorting is not supported
  • May be difficult to handle without basic accounting knowledge
  • The number of simultaneous users is limited

Synder Accounting

Best for: e-commerce business owners and accounting professionals who need a better understanding of their accounting

Synder Accounting is a simple accounting software for small business that reflects the actual cash flow that is happening between your sales channel(s), payment gateway(s), and real bank account. Synder syncs the individual sale into the clearing account and once the payment happens, it transfers the sale to the checking account. It serves as an ecosystem where your business data is stored and analyzed. Visit Demo to learn more.

Accounting software top features:

  • Multi-currency management
  • Instant analytics and reporting (P&L, Balance sheet)
  • Meticulous inventory tracking
  • No-code Smart Rules feature for categorization and classification

✔️ Pros:

  • Access to consolidated cash flow
  • Detailed data from all available sources
  • Native integrations with Shopify, Amazon, eBay, Etsy, Ecwid, BigCommerce, WooCommerce

❌ Cons:

  • Lots of features that might seem overwhelming at first 
  • Online only
  • The number of syncs is limited

Xero 

Best for: mid-to-large-sized businesses who want to optimize their accounting

Among some of the best things about Xero accounting software are its user-friendly UI and the possibility to add an unlimited number of users for free. Unlike other software, Xero makes most features available to all users (except for multi-currency, expenses, and projects that are available only in the top-tier plan). 

Accounting software top features:

  • Payroll processing
  • Multiple reports
  • Automated daily bank feeds
  • Simplified double-entry accounting

✔️ Pros:

  • Cloud-based
  • Add-on applications available through Xero Marketplace
  • Customized templates for invoices

❌ Cons:

  • Not all banks are available for bank feeds
  • Email support only
  • Reporting system might be confusing for non-accountants

QuickBooks Online 

Best for: a wide variety of small business owners who want to manage their finances better 

Perhaps the most well-known small business accounting software, QuickBooks can automate your business a lot. QuickBooks Online is a tax and accounting software solution that helps you manage your finances, keep the books balanced, send invoices, track online payments, and grow your business.

Accounting software top features:

  • Reconciliation
  • Built-in reports
  • Invoicing
  • Inventory management

✔️ Pros:

  • Customizable reporting
  • Payroll automation
  • Expense tracking

❌ Cons:

  • You can’t change the version of QBO
  • Difficult to understand when you don’t have any accounting background
  • Possibility of missing entries

Pro-tip to summarize

Choosing the best accounting software for your e-commerce business can be a daunting task. There are countless options to choose from, each with its own features. Considering strengths and weaknesses might seem tedious and pointless now, but choosing a small business accounting software that best fits your needs will save time and money in the long run. 

As either you or a member of your staff will be spending a lot of time with this accounting software, it’s crucial to evaluate the quality of the support available. To help you decide, ask questions and see which database and live support provides the best and the most efficient assistance. 
We hope that you’ve found some answers on how to choose accounting software for your business!

Fanya Becker

Fanya Becker

Fanya Becker is a Synder expert with sound experience in consulting various clients on automation solutions. She researches and provides guidance for small businesses on their path towards automating mundane and recurring parts of their workflow, works with professional accountants, and frequently interviews industry experts to create relevant and forward-looking content for Synder.

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