Small Business Accounting Software: A Strategic Guide for Business Owners

The application of accounting software is an indispensable part of any modern business. Be it a small business or large enterprise no one can ignore its usefulness. 

 Small business accounting software allows in-depth tracking of financial transactions, report generation, analysis, and tracking of the same. These software automates regular tasks like report creation and analysis. It reduces the costs of finance and saves time for making better financial decisions.

Are you someone who has just started a small business and want to gain insights on the bookkeeping and finance system for small business and how it works in the modern era? Keep reading this article to know more about it.  

What is Small Business Accounting Software?

Let us begin with the definition of accounting software. Accounting software is a computer-based program that helps bookkeepers and accountants to record and report financial transactions of an organization. The functionality of an auditing software differs from product to product. Large to medium sized firms may choose to implement a customized solution for calculations that integrates a huge amount of data from all concerned departments. 

Small organizations are also choosing accounting software for their business purpose. The monetary system for small businesses slightly differs from their larger counterparts. Medium to large enterprises can allocate budget to upgrade these software when required. 

Small businesses run on tight budgets. That is why most of the time they choose any ready made or off the shelf accounting software to run their business.      

 The online accounting software for small businesses also allows for storing huge data without ending up taking up any extra space. Earlier when automation was not their business they used to manage a separate accounts department to get all these works done. The number of employees used to be more. Even for the accounts department, companies allocated larger rooms as they had to store ledger books, and big files filled with all transactional information.

We know you can easily recall those days when the finance system for businesses used to be like this. Thanks to the online accounting software for small businesses, offices can be smaller.

 Less office space means they can save more on this and spend on some other thing. Employees of the accounts department can also contribute more to the overall business growth. 

As a small business owner, you may find it challenging how to find out the best accounting software for small business? 

We are here to help you in terms of selecting the best online accounting software for small businesses. Always remember, almost all top accounting software for small business can be operated by our own. All you need is a little hand holding from an expert CPA or bookkeeper, who will guide you in the beginning.   

List of Best Online Accounting Software for Small Business in 2022 

As a small business owner, if you are still thinking that I need accounting software for my small business- you may end up shutting down your company! Software for calculation is a must-have for all businesses, irrespective of company size, employee strength, and industry. 

 Do you know that 64.4% of small business owners use software for sumation instead of having a team of dedicated CPAs and bookkeepers? This is a great proof of why small business owners prefer online accounting software for small businesses.

Small business owners benefit from computing software because it assists them to track accounts payable and accounts receivable, tracking all financial transactions, generating reports to conduct audits, and being prepared for taxation.  

The main advantage of having a small business is you can easily select the top accounting software for small businesses without needing many customizations.The best approach is to understand the bookkeeping system for small businesses at first. It will help you to understand the best accounting software for small businesses. 

How many of you have a doubt about whether the calculation system takes care of small business bookkeeping-related needs or not? We would like to inform you that you can select the best bookkeeping software for small business .

There are various types of software available for small businesses calculation ranging from high to low. A small business owner must think about the industry, number of employees, and purpose of buying a particular small business accounting software. 

After doing thorough research on finance software made for small businesses, we have listed the best online accounting software for small businesses of 2022. 

QuickBooks Online

The best accounting software for small businesses is QuickBooks Online as per the owners. The reason behind this popularity is most small business owners settle down for this software as it is easy to use. Most of the users have confessed that they got prompt support from the customer care team.

Even the knowledge base section of the website is filled with guides if you got stuck with some process while working on this software. You can browse online to find out online training resources available for QuickBooks Online. Once you open the application, you can see all features are available on the main dashboard.

A user can enjoy 30 days of free trial after opening the account on QuickBooks online. Once the trial period is over, four types of subscription plans are available. The basic one costs around 25$ per month followed by essentials at 50$ per month, plus at 80$ per month, and advanced at 180$ per month.  

As the name suggests, the simple plan offers basic bookkeeping features. Usually plus and advanced plans are perfect for small business accounting needs. These plans come with advanced features like inventory management, time tracking, and budgeting. The advanced plan is perfect for those organizations who want a robust solution in business accounting. 

Monthly plans are the most popular ones. As your business grows, you can upgrade your package as required. There are various customization options available with the mobile application for reviewing reports, receiving payments, tracking business growth, and many more.

All plans allow integration with third party payments gateways like Stripe, PayPal and Square. A user can easily integrate QuickBooks Online with the help of any automated accounting software. 

Xero

Right after QuickBooks, if there any software for calculation suits well for small to large sized enterprises- that is Xero. Micro business owners can rely on Xero for their accounting system. Those who all are looking for an easy accounting program for small business, Xero is the best choice. 

The user interface of the Xero software fully integrates with a third-party payroll service. Organizations can easily collect payments from online through the integration of Xero software with multiple payment gateways. 

Xero is very popular among the business owners of the New Zealand and Australia region. The application of this small business accounting app is increasing globally, especially in the U.S.A. region. 

It offers a 30 days free trail to the users so that they can explore all features they are offering to the customers. There are three plans available. Early plan starts from 12$, Growing will cost you around 34$ followed by the Established plan. 

This Established plan will charge you around 65$ per month. You can opt for the additional payroll service by paying some extra amount.

Is there any small business owner who is reading this article and thinking, do I need accounting software for my small business? Yes, you do and Xero is the best. This plan can be used for 20 invoices and five bills per month, depending on the consulting or small service provider.

Growing and Established plans offer unlimited invoices and bills for your business. We know some of you had a confusion about the top accounting software for small business. The eternal battle between should you choose Xero or QuickBooks as your accounting software is still there in the market. We would suggest you choose as per your business needs. 

Wave

How many of you are searching for the best bookkeeping software for small businesses that will be free of cost? Wave is the perfect software for a service-based small business. These kinds of organizations need to send invoices and do not need to maintain or manage a payroll system.

Let’s take another example of a freelancer or microservice-based business that rarely needs to think about -invoices or other stuff. Wave is the best choice for calculation for you people free of cost. It offers you all the basic accounting and bookkeeping needs that a small business owner or a freelancer needs.

You need to give the transaction details. CPAs can take out important reports from Wave and prepare tax returns in detail. Most businesses need basic accounting features like income and expenditure tracking, invoicing, financial reporting, invoicing, and scanning receipts- everything is included in this free software.  

These features are accessible through websites and applications both. Those who all want to avail themselves of customer payment processing and payroll services- need to pay an extra amount. The basic bookkeeping, reporting, and invoicing features are absolutely free.

An unlimited number of users can avail the features at the same time without shelling much. This free-of-cost desktop accounting software for small businesses offers multiple transaction benefits to the users.

This online solution for small businesses has limited third-party integrations. While doing any transactions through a credit card, it deducts or charges an extra amount. The same thing is applicable for the ACH transactions as well. 

The full-service payroll services are limited to only 14 states of the USA. It means, the rest of the world has to go with the basic free version. 

FreshBooks 

Are you someone who is the owner of a service-based organization and wants a solution for invoicing? FreshBooks is the best option. Those who are not sure and want to know the difference between FreshBooks and QuickBooks, please keep on reading this part. 

FreshBooks gives more customizations for invoicing purposes, compared to other options. The main purpose of using FreshBooks is to send, receive, pay, and print invoices. Besides, taking care of your accounting-related needs in a small business can take care of your basic bookkeeping-related needs too. 

Any small service-based business can easily send proposals, receive payments, and track projects on time with the help of FreshBooks. This is the best for small businesses.FreshBooks is mainly an invoicing software that helps you in your small business accounting-related works. So, as a small business owner, you can understand that when it comes to the basic invoicing management needs, nothing can beat FreshBooks. But we will slightly differ from what you usually hear about the utility of FreshBooks.

FreshBooks is one of the best small business accounting software for mac when it comes to basic bookkeeping needs. This affordable option has a user-friendly interface that helps new users to understand how to make use of the software.  

There are four unique plans, and organizations can get a 10% off if they pay the amount early, instead of a monthly basis. Also, FreshBooks offers a 60% off rebate each month for a long time. There are four plans. Lite starts at 6$/month, Plus will cost you around 10$/ month, Premium will cost you around 20$/month.   

Zoho Books

Time to discuss the most comprehensive calculation solution for small businesses. Zoho Books is one of the online accounting software for small businesses. It automates the most common bookkeeping tasks so that you can devote more time to your business needs and less time to the tedious task of data entry. 

A user can automate customer payment reminders, manage contractors, create expense profiles, manage inventory, etc. Zoho Books offers a larger network of Zoho products. You can say, Zoho Books is more like an umbrella that offers multiple programs. You can use Zoho for inventory management, customer relationship management, and project management.

Small business owners, those who earn within 50$k/ month, can use the free plan of Zoho Books. Zoho Books has paid plans as well. The price of the most affordable paid plan starts from 15$/ year and 20$/month. 

Three users can use this plan at the same time. You have to pay an extra 2.50$/ month for each additional user.

Zoho Books provides extra discounts to the non-profit organization as they are the one who needs encouragement and funding for welfare measures. That is why this small business accounting tool is very famous among Non-Profit organizations and NGOs.

Even after being such a good all-in-one solution, Zoho Books does not offer a payroll plan integration, apart from Texas, India, and California-based customers. Another major drawback this Zoho Books is that Zoho Books does not integrate with any third-party payroll providers.

Every time you need to update the payroll-related details manually. That’s the reason why consumers are trying out other automated software. On the other hand, the cheapest plan of Zoho Books does not include automatic journal entry creation. 

Going back to the Zoho Books and uploading each transaction manually creates huge difficulties among users. The main purpose of automation is to ease the hassle and save time for users.  

Now, let us see the benefits of having softwares for accounting for small businesses

Benefits of Accounting Software for Small Business

• User Friendly

Small business accounting software is easy to learn and use in day-to-day business operations. All you need to do is to set up and keep your accounts up to date with a few regular entries. 

Bank statements and invoices can be updated and processed automatically. It means you can handle your small business accounting efficiently with a few clicks.

• Security

Online software for calculation stores data so a small business owner some of you might get worried about the security. As this online accounting software mostly runs on cloud to make the accounting process easy and accessible for everyone- you may have a doubt on the security part. For your information, all this software is a security complaint.

• Payroll

Gone are those days when paperwork used to take place in offices. Online software for calculation for small businesses makes it easy for employers to fill up forms accurately on time and get the job done properly. 

• Cash Flow

Efficiently managing your cash flow helps your business to save money. Tools for calculation for small businesses makes it simple to find out the figure of incentives for employees and reductions for customers. This automated cash flow allows a business owner to view profits and losses in a comprehensible way. 

• Invoicing

Invoicing process is very important from the perspective of business. Creating invoices with the help of software for calculation saves your time and prevents losses caused by human error. Try sending invoices to your client over mail to save the environment. 

• Accuracy

Accuracy is an absolute must for any type of business calculations. Mistakes made in calculation can lead to serious mistakes. Calculation for small business ensures accuracy 24*7. 

• Cost

The primary reason why people are switching to the top accounting software for small business is the cost. This cost-effective option is great for small businesses as they need to run on a tight budget. 

Application of accounting software effectively reduces the cost of recruiting an accountant to get the accounting jobs done. If you upgrade your accounting system with online software, you just need to purchase the product and train your employees to use the same.  

• Productivity  

Employees used to keep on filling the same data again and again earlier. Paperwork can be tiring, tedious and mostly employees become less productive. Accounting software for small businesses increases productivity by replacing redundant jobs with automation. 

What to Look for in an Online Accounting Software for Small Business?

Now you know that accounting software helps you to run your business better but as a small business owner, it is important to know about which software you should select for your business purpose.

Here are a few key features or things to consider before you select the best bookkeeping software for small business.  

User Friendliness

Having real-time access to your data supports smart business decisions and ensures a better cash flow. Here are the features to be aware of:

Dashboard

Any top accounting software for small business will organize receipts, purchase orders, invoices, tracking income and expenses, bank reconciliation, financial statements and balance sheets, time tracking, accounts payable, and receivables.

Settings

You can control what users can see right after visiting the settings section of the Dashboard.

Record Creation

An accounting software will let a user create inventory, purchase record, product and service descriptions easily.

Chart of accounts

Setting up accounting charts are simplified with accounting software. Most software offers you an option to create a standard and customized account of your own.  

Reporting Solutions

As a company starts growing, the need for reporting gets increased. Reporting allows you to pull data for custom reporting that lets you conduct an in-depth analysis of business.

·   Unlimited lists that allow for classes, charts of accounts, and projects.

·   Custom benchmarking with the ability to customize KPI’s. It allows you to fix the impact of the bottom line the most.

·   Dynamic dashboard that processes information and works on multiple data sources in a single space to complete a picture of performance. 

Last but not the least, consider selecting what is the best accounting software for small business based on the pricing factor as well. At first, check for the prices before finalizing the perfect one for your concern. 

How Much Does Accounting Software for Small Business Cost?

Accounting software is becoming a famous and lifeline of many businesses when it comes to managing the entire finance of a business. Luckily, all this software that is available in the market is not too costly! 

Having an eye on the budget and opting for an accounting software based on the budget is possible. Check out various plans offered by the leading accounting software service providers across the globe. 

One Time Payment

Most of the desktop accounting software for small businesses provides this one-time payment offer to their customers. It sounds like you need to pay a huge amount to get this software. In general, small to micro businesses find this plan as a better alternative to other plans. QuickBooks Pro offers this one time facility to the customers, starting from 220$. 

Annual Subscription 

Those who all opt for an annual subscription plan can enjoy an additional 10-20% discount on the total amount. Zoho Books, QuickBooks, and other similar top accounting software for small businesses offer annual subscription plans that allow you to make the most out of their applications.

Annual subscription plans relieve you from paying recurring costs every time. Once you purchase an annual plan, you do not need to think about the expiry date of your accounting software.  

Monthly Subscription

There are some companies who find out this one-year time is too long to invest in particular software. They generally prefer to try multiple accounting software in a short span. In that case, a monthly subscription to a particular plan is the greatest option.  All the best online accounting software for small businesses offers their plans on a monthly subscription basis.

From Xero to QuickBooks, all leading accounting software offers this monthly subscription facility to customers. The monthly billing cycle of a particular plan is as good as any other plan. Once you recharge the plan on a particular day in the next month, your plan will work perfectly. This is the most popular subscription-style among small business owners. 

In Conclusion

Selecting the small business accounting software seemed difficult for you when you tried to choose one for your concern.  Now that you have reached the conclusion, we can assume that you have got fair enough understanding of the top accounting software for small businesses. You can easily choose the best one that offers you the maximum benefit at the least amount.

So, whenever you buy an accounting software for you, try it before purchasing so that you can understand whether you should invest your money over there or not? We hope this article has helped you to get a glance of the latest accounting software.

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