Why would small business owners use accounting software? There are many benefits to utilizing accounting software such as tracking accounts receivable and accounts payable, having a clear vision of their profitability, and also being prepared for tax season. Many different types of accounting software with varying capabilities and price tags are available for small businesses. How could a small business owner begin to choose the best accounting software that is best for them? For example, the type of industry and number of employees are two factors small businesses would consider. It’s a lot of work to choose between so many accounting software. In this article, 19 accounting software companies were researched and compared before picking the best for small businesses. During the process, a lot of factors are evaluated such as cost, ease of use, features, integrations, and scalability.
Here are the 5 best Accounting Software for Small Business of 2021.
Best overall: QuickBooks Online
QuickBooks Online is the best overall accounting software for small businesses. Not only all accounting features can be found here, but there are also a variety of online training resources which are very helpful for small businesses just starting out. You can find everything on one main dashboard, making bookkeeping smoother and more efficient.
Best for Micro-Business Owners: Xero
When it comes to micro-businesses who prefer very simple accounting software, Xero is the best. Xero has a clean interface with a third-party payroll service. Payments can be collected online from customers through Xero’s integration with Stripe and GoCardless.
Best for service-based businesses: FreshBooks
For most service-based businesses, the most essential accounting need is invoicing. FreshBooks has more customization for invoicing than other accounting software. It makes a lot of procedures easier such as sending invoices, requesting deposits, collecting client retainers, tracking time on projects, and receiving payments.
Best for part-time freelancers: QuickBooks Self-Employed
For part-time freelancers and independent contractors whose primary needs are tracking their income and expenses for their tax return, QuickBooks Self-Employed accounting software is their top choice. The software would total up all business transactions automatically and save you from digging through all the bank and credit card statements. Some of the features include tracking mileage, sorting expenses, organizing receipts, and sending invoices. Also for freelancers who don’t have a separate bank account for their business activity, there’s a helpful feature that you can mark each transaction as business or personal.
Best free software: Wave
If you’re a service-based small business that creates simple invoices, and don’t require tracking inventory or running payroll, Wave is an ideal accounting software to use. All the necessary reports can be pulled from Wave for accountants to prepare for a business’ tax return. Some of the foundational features that suit most small businesses needs are income and expense tracking, financial reporting, invoicing, and scanning receipts, and they’re all included with this free software.
Find more information here: Best Accounting Software for Small Business
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