How to Choose the Best Accounting Software for Your Small Business

Choosing the right accounting software is crucial for managing the finances of your small business. With so many options out there, it can be overwhelming trying to find one that meets your specific needs and budget. This comprehensive guide will walk you through the key factors you need to consider when selecting small business accounting software. Follow these steps and you’ll be able to find the perfect solution for your company.

Compare Features to Your Accounting Software Needs

The first thing you should do is make a list of must-have features based on how you run your business. Here are some common features to consider:

  • Invoicing – Create quotes and invoices, automate recurring invoices, accept online payments
  • Expenses – Track expenses, upload receipts, categorize spending
  • Payroll – Pay employees and contractors, calculate taxes, generate forms
  • Reports – Cash flow, profit and loss, sales tax, customized reports
  • Bank reconciliation – Connect bank and credit card accounts, match transactions
  • Multi-user access – Set user permissions, enable accountant collaboration
  • Inventory management – Track stock levels, record cost of goods sold
  • Time tracking – Log hours worked on projects and tasks
  • Mobile app – Manage finance on-the-go from your smartphone

Match your list against software options to see which provides the functionality you need.

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Compare Pricing Models

Small business accounting software is available in several pricing models:

  • Free – Free versions exist for most software. They have limited features and capacity. Best for very small, simple businesses.
  • Freemium – Basic features are free, upgraded plans unlock more advanced capabilities. Scales from small to larger businesses.
  • Subscription – Pay a monthly/annual fee based on number of users and features needed. Scales as your business grows.
  • One-time license – Pay a single upfront cost for the license to use the software. Own it indefinitely. Extra fees for add-ons.

Factor in the number of users you need, features required, and stage of growth to select a model that fits your budget. Watch for hidden fees too.

Best Accounting Software for Your Small Business

Consider Support Options

Even user-friendly accounting software will require some troubleshooting questions or technical support. Consider what support options are offered:

  • Knowledge base – Searchable articles and tutorials for self-help. Useful for basic questions.
  • Email support – Email questions to customer service reps. average 1-2 day response time.
  • Live chat support – Get instant answers to quick questions via chat. Limited availability hours.
  • Phone support – Call and speak to a live rep. Most robust option but potential fees.
  • User community – Consult fellow users in forums. Good for personalized advice.

Ideally, choose a software that offers email, live chat, and community forums for free. Paid premium support tends to be more comprehensive for complex issues.

Check Accounting Software Platform Compatibility

You’ll want accounting software that works seamlessly across the devices and operating systems used in your business. Most programs are web-based or offer cloud hosting, with cross-platform apps available. Check that:

  • The software works on your team’s desktop OS – Windows, Mac, Linux
  • Mobile apps are offered for iOS and Android devices
  • Any other desktop access tools integrate (e.g Quickbooks Online integrates with Outlook)

Browser compatibility is also useful to review before choosing software accessed via web.

Evaluate Ease of Use

Accounting software packed with features is pointless if your team finds it too complex and confusing to use on a daily basis. Prioritize programs with:

  • Intuitive graphical interface
  • Simple navigation and workflows
  • Built-in setup wizards for ease of configuration
  • Automation for routine tasks like bank feeds and invoicing
  • Educational resources like demos and getting started guides

Factor in the technical proficiency of end users before committing to a solution. Strike a balance between power and simplicity.

Assess Security protections

As a steward of sensitive financial data, security is an absolute must for accounting systems. Look for the following protections:

  • Bank-level encryption for data in transit and storage
  • Regular audits and security certifications (SSAE, PCI)
  • Role-based user access controls
  • Remote multi-factor authentication
  • Activity logging for auditing

Reputable software companies enable strong security controls and compliance by design.

Check Add-on Apps and Third Party Integrations

Expand the possibilities of your accounting software by connecting it to other business apps via integrations. Look for these add-on capabilities:

  • eCommerce integration – Shopify, WooCommerce, Amazon, eBay, etc
  • POS integration – Square, Clover, Vend, etc
  • CRM integration – Salesforce, HubSpot, Zoho etc
  • HRIS integration – Gusto, BambooHR etc
  • Document storage integrations – Google Drive, Dropbox, Box
  • Business intelligence integration – Google Data Studio, Cyfe etc

In addition, some accounting platforms offer their own proprietary suite of add-ons for extended functionality from a single solution.

Consult User Reviews

Don’t decide purely on claims from the software vendors’ marketing. Take feedback from fellow users who’ve implemented the solution into account. Look for reviews on:

  • Usability – Is the product easy and intuitive or overly complex?
  • Customer service – How helpful and responsive is tech support?
  • Value for money – Does the functionality justify the pricing?
  • Pros/cons – What are the standout strengths and weaknesses?

Independent user perspectives will give you candid insights on how suitable the software really is for small business accounting.

Choosing the right accounting software takes research and careful evaluation. Take your time considering all of the key factors outlined above. Once implemented, the right accounting platform will provide invaluable financial visibility and efficiencies for better small business management.

Compare Top Software Options

To help you start your research, here is an overview of five top-rated small business accounting solutions:

Quickbooks Online

Quickbooks Online from Intuit is the most popular cloud accounting software for small businesses. It packs a wide breadth of features for managing finances, payroll, payments and more.

Key features: invoicing, expense tracking, inventory management, multi-user access, 400+ integrations, mobile app. Robust ecosystem of add-on apps.

Pricing: starts from $25/month. Discounts for annual plans.

Best for: growing small to mid-sized businesses that want an established, reputable solution.

Xero

Xero is a cloud-based accounting platform trusted by over 1 million businesses worldwide. The interface is very user-friendly and intuitive for most.

Key features: automated bank feeds, invoicing, expense claims, multi-currency support, 700+ app integrations.

Pricing: starts from $12/month. Volume discounts available.

Best for: SMEs who want simplicity and seamless experience across desktop and mobile.

Zoho Books

Zoho Books is part of Zoho’s extensive suite of business apps. It provides complete accounting capabilities with excellent value.

Key features: double-entry accounting, inventory and order management, time tracking, project costing, multiparty accountant collaboration.

Pricing: starts free for a single user, $9/month for 5 users. Discounts on annual plans.

Best for: lean small businesses who want quality accounting at affordable pricing.

Wave

Wave is a freemium accounting platform suitable for basic small business finances. It has solid invoicing, accounting, and payroll features.

Key features: unlimited invoicing, bank reconciliation, income/expense tracking, payroll tax remittance, reports.

Pricing: 100% free for core accounting features. Paid plans add $20-$35 for more users, features, and support.

Best for: bootstrapped startups and nano businesses with simple, free accounting needs.

Freshbooks

Freshbooks is a longstanding accounting app focused on small business owners, freelancers, and solopreneurs. Very user-friendly workflows.

Key features: intuitive double-entry accounting, smart payment processing, automated late payment reminders, capture expenses via mobile.

Pricing: starts at $15/month, discounts for annual plans.

Best for: non-accountants who want simple DIY accounting without complexity.

This covers a cross-section of options at different price points. Do further research to find the platform that best aligns with your business requirements and budget.

Key Takeaways

  • Compare accounting software features to your must-have list
  • Understand the pricing models – free, freemium, subscription, or one-time
  • Check support options – community forums, email, phone, chat etc
  • Ensure compatibility with your OS, devices and browsers
  • Prioritize ease of use and simplicity where possible
  • Only choose secure, audited software handling your finances
  • Add functionality via integrations with other apps
  • Read independent user reviews before deciding
  • Consider Quickbooks Online, Xero, Zoho, Wave, and Freshbooks as leading solutions

Choosing the right accounting software is a big project, but immensely valuable. Follow this guide to match a platform perfectly suited to the way your small business operates. Proper accounting management will provide the financial visibility and control needed to drive smarter decisions and growth.

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