Best accounting software for small businesses

Samuel Clennett
30.06.20
6 minute read

Having the right accounting software for your business can make it easier to manage your company cash flow, reconcile payments and file your taxes. It’ll free up your time, so instead of balancing the books, you can invest in activities which really help your company flourish.

This guide covers the best small business accounting software, including a rundown of free account software options, and some ideas about what to look for when selecting the right product for your company.

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What should you be looking for in accounting software?

The market is full of accounting software for small businesses. Doing some research before selecting the right one for you is a sound investment. Here are a few things to think about.

  • Do you want a free accounting package, or are you happy to pay for the right product? Ensure you understand any one off and ongoing fees before you choose the one for you

  • How many people need access to your accounting system? Does your chosen software support this, and are there additional charges if your team grows?

  • If you’re planning on using the product for payroll management, how many people are included in the basic package, and what does it cost to add more?

  • Is the software accessible from your normal devices, including mobile access?

  • What third party integrations are available? Think about both the integrations you use now, and others you might need to add as your business progresses

  • Consider which functionality is essential, what’s desirable and what doesn’t really matter - do you need just basic accounting, or expense tracking and tax preparation, for example?

Some different options

Here are a few of the most popular accounting software options available, to help you along with your research.

Xero

Xero offers smart online accounting, secure data protection and reliable data to help you manage your books¹. The product features you can access vary according to the plan you choose - which means you’ll always be able to get what you want, and you won’t need to pay for anything you don’t use. Xero offers integration with the TransferWise multi-currency account for business, which makes it easier than ever to cut the costs of international transactions while avoiding unnecessary admin.

Here are the account types you can choose from². In addition to these 3 accounting packages, there’s a payroll only option for up to 4 employees - priced at $10/month.

XeroStarterStandardPremium Five
Monthly price$25$50$65
FeaturesSend up to 5 invoices, enter 5 bills Reconcile up to 20 transactions Manage payroll for 1 personSend unlimited invoices and bills Reconcile unlimited transactions Manage payroll for 2 peopleAll standard features, plus: Manage payroll for 5 people Automate superannuation Handle multiple currencies
Optional extrasExpenses - $5 per user/month Projects - $10 for the first user/month, then $7 per month for each additional Discounts available if added to the accounting planExpenses - $5 per user/month Projects - $10 for the first user/month, then $7 per month for each additional Discounts available if added to the accounting planExpenses - $5 per user/month Projects - $10 for the first user/month, then $7 per month for each additional Discounts available if added to the accounting plan

Intuit QuickBooks

Intuit QuickBooks has an opening offer which means you pay only half the monthly fee for the first 3 months of use. Choose from any of the 3 packages available according to the functionality you need - all accounts include secure data storage, mobile access and customer support. You can also add additional payroll to your package for $4 per person/month if you need additional capacity³.

Here’s a rundown of the key features of each package available⁴:

Intuit QuickBooksSimple StartEssentialsPlus
Monthly price$20 ($10 for the first 3 months)$35 ($17.50 for the first 3 months)$50 ($25 for the first 3 months)
FeaturesTrack income and expenses Create invoices and quotes Store receipts and kilometres Payroll for 4 peopleSimple Start features, plus: Payroll for 7 people Up to 3 users Handle multiple currencies Recurring transactionsEssentials features, plus: Payroll for 10 people Up to 5 users Track inventory Manage budgets

Rounded

Rounded is an Australian company, which has launched to support freelancers and the self employed, with efficient friendly customer service, and a range of support geared towards sole traders⁵.

Let’s take a look at the packages on offer⁶:

RoundedStarterPro
Monthly priceUS$15/month (billed annually)US$20/month (billed annually)
FeaturesUnlimited clients and quotes Send invoices and set up recurring invoices Track time and expenses Accept credit payments and send automated payment reminders Reporting to support tax filingAll the features of Starter, plus: Connect your bank account Track sales tax

Sage

Sage Business Cloud Accounting provides accounting software with integrated payroll, which you can access from anywhere. The basic package comes with a good range of features, but you can also buy a number of other bolt-on functionalities, to make your accounting package do exactly what you need it to do⁷.

Here’s how it works⁸:

SageSage Business Cloud Accounting
Monthly price$20/month
FeaturesPayroll for up to 4 people2 usersEmail invoices and statementsReports and BAS report servicesBank and credit card processing
Optional extrasTime tracking - $5/monthMulti-currency - $5/monthDirect bank feed - $7/monthAdditional companies - $20/monthAdditional users - $3/user per monthAdditional payroll - $5-6/employee per month

Zoho

Zoho allows users to manage everything from invoicing and expenses, order tracking and online payments, all in one place. Get a full end to end service with one of the packages available, and you’ll also be able to add on the extras you need to suit your business as it grows⁹.

Here’s what Zoho has to offer¹⁰:

ZohoBasicStandardProfessional
Monthly price$13.20/month$26.40/month$39.60/month
FeaturesUp to 50 customers or vendors 2 users 5 automated workflows Bank reconciliation Invoicing and expense tracking Budgeting Projects and timesheetsAll the Basic features, plus: Up to 500 customers or vendors 3 users 10 automated workflows Purchase approval Twilio integrationAll the Standard features, plus: Unlimited customers or vendors 10 users 10 automated workflows Purchase orders Inventory Custom domain
Optional extrasAdditional users - $2.20/user per month Auto scans - 50 per month $5.50/monthAdditional users - $2.20/user per month Auto scans - 50 per month $5.50/monthAdditional users - $2.20/user per month Auto scans - 50 per month $5.50/month

Is free accounting software available?

If you’re not sure whether or not accounting software is right for your business, you might be tempted to try out one of the free accounting software products available.

This is a good way to get a feel for the type of service and product available - but it’s worth noting that free small business accounting software is usually not as robust as a paid product. You may find you don’t have all the functionality you need in a free product - so don’t give up if a free product doesn’t suit your needs. Many of the paid software products offer free trials which can be a good way to test them out for no fee.

If you’re looking for a free online accounting product for small businesses, try Wave¹¹ or Zipbooks¹². The Wave software is free to use - Wave makes money from processing online payments, instead. Zipbooks, on the other hand, offers a free product, which you can then choose to upgrade to a paid account if you like the service offered.

If you’re just starting out in business, and looking for the right accounting software for your needs, investing some time in research is important. Check out a few different free and paid products to find the one which suits you.

And while you’re investigating ways to protect your profits and grow your company, don’t forget to also look at other smart ways to save, like the free TransferWise multi-currency account for business. Get low cost international transfers using the mid-market exchange rate, so you can connect with customers and suppliers all over the world.

Sources:

  1. Xero
  2. Xero Pricing
  3. Quickbooks
  4. Quickbooks Pricing
  5. Rounded
  6. Rounded Pricing
  7. Sage
  8. Sage Pricing
  9. Zoho
  10. Zoho Pricing
  11. WaveApps
  12. Zipbooks Pricing

All sources accurate as of 19 June 2020


This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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