Businesses of every size need an accounting system to track revenues and expenses, process invoices and send out bills, and track assets and liabilities. There are many things to consider.
Can your three-person shop make do with simple, user-friendly bookkeeping software package? Does your mid-sized business need a sophisticated system that uses process automation? Do you need payroll or inventory management features? If you already have other systems like ERP, will the accounting software integrate with those systems?
These considerations, as well as usability, vendor support, cost, and the software's ability to grow with your business, should all be in your evaluation plan. We reviewed eight accounting packages -- check them out below.
Acquired by HR Block in 2019, Wave Accounting provides basic functions such as Sales, Purchases, Accounting, Banking, Payroll, and Reports.
Featuring easy navigation and a user-friendly interface, the application itself is free, with additional fees for payments and payroll processing. Wave offers a financial and tax outsource service starting at $149 per month. Wave supports multi-currency accounting, a must for companies doing business internationally.
Wave can integrate with more than 1,500 applications. It has an excellent dashboard that provides an eyeshot view of cash flow and profit and loss. From the dashboard, you can click on invoices and bills to view underlying transactions.
Wave supports double-entry accounting, produces quarterly tax estimates, allows for customized, professional-looking invoices, and uses OCR technology to scan purchase receipts into the system. But if you need to track inventory or billable hours, look for another package.
Wave is a well-rounded accounting package for freelancers, sole proprietors, and very small businesses.View Now at Wave
FreshBooks accounting software supports double-entry accounting and contains modules for invoicing, expenses, time tracking, projects, payments, reporting, and general accounting.
Working intuitively on both desktops and mobile devices, FreshBooks includes project management capabilities, making it a good choice for businesses that work on a per-project basis and need to track billable hours. FreshBooks charges per-use based upon the number of clients that your company has.
For example, the FreshBook Lite plan charges as little as $15 per month for five or fewer clients. This monthly fee can scale up to $50 per month for 500 or more clients.
Note: The latest version of FreshBooks no longer supports inventory management. The software automatically connects with financial institutions that you define for easy transaction transfer.
FreshBooks is a strong accounting package for freelancers, sole proprietors and small businesses, especially those that work on a per-project basis.View Now at FreshBooks
QuickBooks Online comes in four flavors: Simple Start (one user for $8 per month), Essentials (up to three users for $12 per month), Plus (up to five users for $21 per month), and Advanced (up to 25 users for $45 per month). Discounts on pricing are frequently offered.
QuickBooks is a comprehensive solution that scales well as your business grows. It offers core accounting, reporting, banking and invoice functions, and also inventory and project management support. Limited help resources are provided online.
With QuickBooks, companies can track income and expenses, invoice and accept payments, maximize tax deductions, track sales and sales tax, capture and organize receipts, manage bills, track inventory and project profitability, and execute payroll and account reconciliation. Invoicing can be done in multiple languages.
QuickBooks also has a nice collection of customizable reports. Analytics are available with the Advanced version.
For those who want to take a test drive, QuickBooks offers a free 30-day trial.
Quickbooks is a highly scalable software that works for sole proprietors and small businesses.View Now at QuickBooks
Sage 50 Cloud offers bill paying, invoicing, financial reconciliation, inventory management, job costing, and budgeting. It can manage financials for multiple companies. It also has versions tailored to specific industries such as construction, manufacturing and distribution.
Sage 50 Cloud, formerly known as Peachtree in 1978, offers an accessible interface that conforms visually and behaviorally with the Microsoft Windows UI. For Microsoft shops, Sage 50 has full Office 365 integration. Sage 50 offers remote access, but it is fundamentally a desktop system.
Sage 50 can scale from small to enterprise levels. The downside is that the software can be harder to master than others for non-accounting professionals. Entry-level Sage 50 Pro Accounting runs a little over $500/year for a single-user license.
It's a good fit for small, mid-sized and enterprise-level businesses that seek robust financials and inventory management—and that need their accounting system to grow with them.View Now at Sage 50 Cloud
For those just starting their businesses, Zipbooks is a good option because it offers basic accounting and it's free. With the free Starter package, you can perform the "basics" -- such as sending out invoices, accepting digital payments, and managing your customer lists.
You can scale up in sophistication as your business grows. A Smarter package is available for $15 per month and the Sophisticated package is $35 per month. These packages offer payment processing, and the Sophisticated version includes account reconciliation and time tracking.
Zipbooks is a great package for small, startup businesses. Zipbooks also offers a wealth of accounting capabilities that enable companies to scale up in accounting sophistication as they grow.View Now at Zipbooks
If you don't need inventory tracking or fancy billing processes and you're a sole proprietor or small business, Kashoo is worth considering. It has excellent expense and income management, and it supports double-entry accounting, payroll processing, and electronic payments and deposits.
You can import banking transactions and information such as clients, invoices, payments, and expenses from other systems; and you can set up a merchant account. Data can also be exported to commonly used formats such as Excel, CSV, and Google Sheets.
Kashoo features a straightforward user interface and has strong online user support and documentation. It also has project cost tracking capability. One disadvantage: Android support is in the works, but not yet available.
At $19.95 per month, Kashoo is affordable. This makes it a nice fit for sole proprietors and smaller businesses.
Zoho Books scales from basic accounting to full-featured software that is more customizable than most offerings. It integrates with Zoho project management and with Office 365, but its Achilles heel is that it doesn't offer payroll processing outside of California and Texas.
Zoho Books includes Banking, Sales, Purchases, Time Tracking, Accounting, and Reports. This functionality can be used generically or customized. Zoho supports inventory management and workflow automation. Zoho's user interface is well designed, and the software can integrate with a variety of mobile and desktop devices. User support is solid.
Basic Plan pricing starts at $9 per month and includes invoices, expense tracking, projects, and timesheets. However, you're limited to 50 contacts, one user, one account and five automated workflows.
Zoho's Standard Plan is $19 per month, and adds bills, vendor credits, reporting, and multi-level purchase. Meanwhile, professional level Zoho ($29 per month) gives businesses unlimited contacts and users, up to 10 automated workflows, and purchase orders, sales orders and inventory tracking.
Zoho Books works for small businesses seeking fully featured, affordable accounting with a well-designed user interface and full support for mobile devices.
Tipalti is an accounting software well suited to companies doing business internationally that are also looking for automation of their accounting processes to save staff time.
It ocuses on the automation of accounting processes. It's not strictly a bookkeeping software, so it's best suited for mid-sized companies that have accounting expertise on staff. Tipalti is very customizable, boasts a user-friendly interface, and supports accounting regulations and currencies in other countries. It includes machine learning that makes the software smarter over time as it learns the accounting rules of your business.
Tipalti's functionality includes global payments, supplier management, tax compliance, payments, reconciliation, and more. It integrates with Sage, Netsuite, and Quickbooks. It also allows you to build custom integrations. Tipalti does not offer 24/7 support, but it does have a reputation for being responsive and knowledgeable when support is needed.
Pricing for Tipalti is determined by each customer's needs.
Tipalti is a good fit for small and growing businesses and for mid-sized companies that have accounting expertise on staff and that are doing business globally.View Now at Tipalti
How we evaluated
Accounting software must be functional, affordable, scalable, usable, well supported by the vendor, and flexible in its integration options. One characteristic shared by all of the software packages that we evaluated was that pricing was based on use. This helps ensure that companies get the best value for their money since they only pay for what they consume.
Beyond that, different accounting software offerings have different strengths.
All accounting software packages address the core functionality of accounting, such as income and expenses, receivables and payables, but some software is richer in functionality than others.
There is accounting software that has an integrated payroll function, which is important for companies that must issue paychecks or direct deposits to employees. In other cases, the accounting software includes international capabilities, such as multi-currency processing, processing intelligence of other countries' accounting regulations, and the ability to accept and remit foreign payments.
Some software offers customized versions for specific industry verticals; and software that is designed for companies where project management is an integral part of their business. For organizations with in-house accounting expertise, there is also software that provides process automation for repetitive functions, such as invoice processing, and that feature artificial intelligence and machine learning.
These accounting packages also have varying abilities to integrate with other in-house systems such as ERP, office management, inventory management, and project management. Some feature large libraries of application programming interfaces (APIs) and even the opportunity to custom develop interfaces to other software; while other packages are very basic and offer little integration -- but they can do the job for a sole proprietor or very small business at an attractive price point.
This broad spectrum of accounting functionality makes it important for companies to evaluate both their current and anticipated accounting needs upfront and to develop a written set of accounting software requirements before they go shopping for software.
Equally important is software that has a short learning curve and is easy to use, especially for smaller organizations that lack internal accounting expertise.
Usability considerations include an attractive user interface (UI), screen functions that are easy and intuitive to navigate, and also the ability to access the software from a plurality of devices that range from desktop computers to mobile smartphones and tablets.
We also looked at vendor support for the software. Did the vendor offer 24/7 service? Was online documentation helpful? Did users also have access to professional consulting services if they wanted them?
Collectively, these criteria identified certain software packages that were "best fits" for companies in different situations -- from sole proprietors and one-person shops to small- and mid-size companies that could scale up to enterprise-level organizations. What we found was that "best fit" software varied, depending upon the needs of the company procuring it, and in some cases, the industry the company was in.