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The Best Accounting and Invoice-Generating Software for 2024

Updated Feb 14, 2024
Best for Small Businesses
  • Plans start at $15 per month
  • Online bookkeeper available
  • Robust app integration
  • Plans start at $15 per month
  • Online bookkeeper available
  • Robust app integration
Best for Growing Businesses
  • Plans starting at $12 per month
  • More than 1,000 integrations
  • Reports with customization and tracking
  • Plans starting at $12 per month
  • More than 1,000 integrations
  • Reports with customization and tracking
Best for Payments
  • Plans start at $23.60 per month
  • A/P and A/R automation
  • Network of vendors
  • Plans start at $23.60 per month
  • A/P and A/R automation
  • Network of vendors
Best for Invoicing
  • Plans start at $17 per month
  • Instant invoices
  • Automated business processes
  • Plans start at $17 per month
  • Instant invoices
  • Automated business processes
Best ERP Tools
Oracle NetSuite Accounting Software
NetSuite logo
  • Custom pricing
  • Built-in ERP features
  • Automated accounts payable
  • Custom pricing
  • Built-in ERP features
  • Automated accounts payable

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Mike Berner
Mike Berner
Senior Analyst & Expert on Business Operations at business.com
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Accounting software plays a critical role in keeping your business financially sound. The best accounting software fits within your budget, is easy to use and integrates with other programs and applications you are already using. To help you sift through hundreds of options, we checked out all of the top accounting software solutions. We pored over their features, prices, fees and reputations to come up with our list of the 11 best options for various types of businesses.

What Is Accounting Software?

Accounting software is a digital system that helps you manage your money. Overseeing your business finances is very different from managing your personal finances and requires different actions. Accounting software records and analyzes your company’s financial data. It also tracks transactions, generates reports, manages customer and vendor contacts, creates purchase orders, tracks inventory levels, bills customers and monitors account balances. Accounting software helps you put your financial data into a structured system and understand how your company is doing.

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How We Decided

Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.

306

Considered

31

Researched

11

Selected

Compare Our Best Picks

BDC Ribbon
Our Top Picks for 2024
Intuit QuickBooks Online
FreshBooks Accounting Software
Oracle NetSuite Accounting Software
Melio
Zoho Books
ZarMoney
Wave Financial
Sage Business Cloud Accounting
Neat Accounting Software
Rating (Out of 10)9.49.18.39.19.28.09.18.18.69.08.2
Best use case

Small businesses

Growing businesses

Payments

Invoicing

ERP tools

Bill management

Process automation

Report generation

Free software

Customization

Document scanning

Base price

$15 per month

$15 per month

$23.60 per month

$17 per month

Custom quote

Free

$20 per month

$15 per month

Free

$10 per month

$200 per year

Invoicing and payments?

Yes

Yes

Yes

Yes

Yes

Payments to your vendors

Yes

Yes

Yes

Invoicing

Yes

Number of clients supported on base plan

Unlimited

Unlimited (monthly limit of 20 invoices)

10

5

N/A

N/A

10

Unlimited

Unlimited

Unlimited

N/A

Free trial

30 days

30 days

30 days

30 days

N/A

Free version

30 days

14 days

Free version

30 days

14 days

Mobile app?

Yes

Yes

No

Yes

Yes

No

Yes

Yes

Yes

Yes

Yes

Third-party integrations?

Yes

Yes

QuickBooks and Xero

Yes

Yes

QuickBooks

Yes

Yes

Yes

Yes

QuickBooks

Reporting?

Yes

Yes

Yes

Yes

Yes

No

Yes

Yes

Yes

Yes

Yes

Automated accounting tools?

Yes

Yes

Yes

Yes

Yes

No

Yes

No

Yes

Yes

Yes

Review Link
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Our Reviews

Intuit QuickBooks Online: Best Accounting Software for Small Businesses

  • QuickBooks Online has valuable accounting software features, including professional invoicing, expense tracking and cash flow management.
  • QuickBooks Live Bookkeeper connects you to accountants when you need expert help.
  • You can’t upgrade from the Self-Employed plan. If you think your business will grow, you may want to choose the Simple Start, Plus or Advanced plan.
Editor's Rating: 9.4/10
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With its feature-rich cloud software, wide variety of integrations, affordable pricing and reputation, Intuit’s QuickBooks Online is our choice for the best accounting software for small businesses. QuickBooks has served small businesses for more than 20 years and for good reason. When you choose this accounting software, you get all the tools you need to support your operations now and in the future.

Even QuickBooks’ basic plan includes many features that other vendors charge extra for, including professional invoicing and the ability to accept payments, track expenses and manage your business’s cash flow. Higher-priced plans include batch invoices, business analytics, a dedicated support team, on-demand online training and integrations with BILL, Salesforce and HubSpot. With all of QuickBooks’ plans, you can snap photos of receipts and link expenses from your mobile device, integrate with several apps and access customer support.

Another key feature of QuickBooks that makes it ideal for small businesses is the ability to connect with a live accountant. Cloud accounting software automates many tasks, but sometimes you need an accounting professional. With QuickBooks’ Live Bookkeeper, you get access to a bookkeeper who sets up the software for you, categorizes transactions, reconciles accounts, closes books monthly and runs detailed reports.

QuickBooks offers a full suite of features and functionality at affordable prices, but that’s not the only reason we selected it as the best accounting software for small businesses. We also like its reputation and adoption rate. If you work with an accountant or accounting consultant, they are likely already familiar with QuickBooks. The same can’t always be said of other accounting software programs that we reviewed.

Xero: Best Accounting Software for Growing Businesses

  • Xero offers more than 1,000 app integrations.
  • Email and live chat support are available 24/7.
  • Not all accountants are familiar with Xero.
Editor's Rating: 9.1/10
75% off Deal

Every business starts small. But as a company grows, its financial needs change. Often you want an accounting program that you can stick with over the long haul and that’s where Xero comes in. Xero’s pricing and plans are based on size, making it our choice as the best accounting software for growing businesses.

Xero offers more than 1,000 integrations with existing business software applications. You may require more apps as your business grows, so this point of differentiation is important to keep in mind. Xero’s software can also run over 50 reports, including profit and loss (P&L) statements, aged receivables and a general ledger. There are also reporting options that offer customization and flexibility. We also like that you can manage both customers and suppliers with this accounting software and organize them into groups.

Xero is easy to use, which is another reason we chose it as the best for growing businesses. Xero’s interactive dashboard displays graphs and charts of crucial information, such as invoices due, bills you need to pay and a history of your bank account balance. New features from Xero emphasize data visualization, such as bar charts and pie charts, and the ability to drill down into revenue generators.Hubdoc is another new service that allows you to scan and capture documents. The software can extract the data from receipts and bills, and sync transactions with Xero.

Whether your business is in the early stages or growing, Xero has a plan and features to meet your needs. The software is easy to use and adapts alongside your business, making it our best pick for growing businesses.

Plooto: Best Accounting Software for Payments

  • Plooto unifies payments, approvals, reconciliation and reporting, and you can automate your A/P and A/R.
  • You can add a vendor or supplier payee in seconds via the Plooto Network.
  • It syncs with QuickBooks and Xero only.
Editor's Rating: 8.3/10
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As the old saying goes, time is money. To scale up your business, you need to spend less time on tedious tasks, such as A/P and A/R. Plooto addresses these needs at an affordable price point, which is why it’s our choice as the best accounting software for payments.

Plooto is an all-in-one payment platform that provides greater financial control and simplicity by unifying payments, approvals, reconciliation and reporting. Plooto’s workflow automation reduces errors, expedites your A/P process and improves how vendors get paid. It also provides end-to-end A/P and A/R automation.

Plooto lets you use the same system to pay anyone, even if that company or individual is outside the U.S. Adding vendors as a payee takes seconds with the Plooto Network of 120,000 suppliers and vendors. Search for your payee in the Plooto Network and then add them to your account with one click. If you can’t find a particular vendor, you can add them as a payee in minutes, saving you countless hours of performing repetitive A/P tasks.

Plooto also speeds up A/R. You can set up the software to send clients invoices automatically with instructions on how to make a payment. When the payment is received, it’s reconciled automatically. Through its Credit Card Acceptance feature, customers can pay invoices via credit cards, enabling you to get paid in as little as two business days. Plooto charges a flat rate of 2.9 percent plus 30 cents per transaction for credit card payments.

Plooto isn’t a traditional accounting software program, but if you want to optimize your A/P and A/R and maximize cash flow, Plooto is worth a deep dive. It automates many payment and accounting processes, integrates with QuickBooks and Xero and is priced competitively, making it our best pick for payments.

FreshBooks Accounting Software: Best Accounting Software for Invoicing

  • You can create professional invoices, allow customers to pay invoices online and send automatic bill reminders.
  • Accounting features include time and expense tracking as well as automated bank and credit card entries.
  • FreshBooks can get pricey if you want to add several team members to your account.
Editor's Rating: 9.1/10
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FreshBooks makes it easy to create professional invoices, get paid quickly and track down past-due payments, but that just scratches the surface of what this accounting software can do. With competitive pricing, robust invoicing capabilities and other accounting features, FreshBooks is our choice as the best accounting software for invoicing.

Getting paid on time is a big pain point for small businesses. Remembering to bill clients, let alone chase down past-due bills, can fall by the wayside quickly as you focus on running your business. FreshBooks accounting software removes many of those challenges with its feature-rich invoicing capabilities. With FreshBooks, you can create professional invoices customized with your logo and message. Your clients can opt to pay their bills through the invoice, reducing the time it takes to get paid.

Do you have clients who tend to pay late? FreshBooks lets you create reminders and send alerts to customers when bills are due or past due. It also monitors the status of invoices after you send them, alerting you when customers receive and view them. With FreshBooks’ invoice generator, you can add tracked time and expenses to invoices.

Invoicing aside, FreshBooks includes many other features that small business owners will appreciate. Recently, the company rolled out a new collaboration with Gusto enabling full payroll integration, as well as a certification program for accountants. Another feature that sets FreshBooks apart is its continuous performance of bank reconciliation.

FreshBooks supports more than 80 apps and integrations, allowing you to connect this accounting software to other business services and systems you already use. If you have a larger business and want several users to access your account, FreshBooks may get pricey. However, for most small businesses that send a lot of invoices, FreshBooks is a standout.

Oracle NetSuite Accounting Software: Best Accounting Software ERP Tools

Oracle NetSuite Accounting Software
NetSuite logo
  • Oracle NetSuite’s feature-rich accounting software also offers enterprise resource planning (ERP) functionality.
  • The accounts receivable (A/R) system automates the delivery and collection of invoices while the accounts payable (A/P) solutions automate payments.
  • You must contact a sales representative to learn how much the software will cost your company.
Editor's Rating: 9.2/10

NetSuite is a full-featured accounting and ERP program that enables you to manage all aspects of your small business ― billing, reporting and manufacturing ― from one dashboard. NetSuite offers a full A/R service that automates the delivery and collection of invoices as well as an A/P solution that automates payments. NetSuite’s tax tools also provide business owners with domestic and global tax management. Taxes can be processed easily according to local laws, removing a lot of the guesswork. The engine supports all currencies and exchange rates.

NetSuite also makes it easy to manage cash flow via its cash management feature, which provides you with insight and visibility to optimize cash flow and stay up to date on your company’s bank accounts. Business owners will appreciate NetSuite’s payment management system, which centralizes and simplifies payments. The planning and budgeting feature automates, processes and unifies the data, making it easier to create budgets and forecasts, model what-if scenarios and generate reports on different aspects of your business. You can set access permissions to ensure you’re always in control of your business’s finances.

In addition to all of the accounting features, NetSuite offers many ERP tools to manage finances, handle orders, manage production and supply chains and plan for the future.

While NetSuite may be too robust for microbusinesses or self-employed individuals, the software’s capabilities can help larger small businesses with lots of moving parts and complex business functions. That is why it’s our pick as the best accounting software with ERP functionality.

Melio: Best Accounting Software for Bill Management

Melio
  • Melio doesn’t charge any fees for bank transfers.
  • You can pay over 7,000 vendors directly with Melio.
  • While its website is mobile-friendly, Melio does not have a stand-alone mobile app for iOS or Android.
Editor's Rating: 8/10

Some businesses just need a simple way to manage A/P and A/R. They don’t want an overly complicated or costly system. All they need is software to send and track invoices and ensure that they get paid. That’s where Melio and its free A/P software comes in. It’s a free, cloud-based software program that lets you schedule payments to vendors, making it our best pick for bill management.

With Melio, making payments via bank transfer is free while credit card payments cost 2.9 percent. You can also accept customer payments via card or bank transfer at no cost. Its ease of use sets Melio apart from other free A/P software. We found that adding vendors and scheduling payments from Melio’s network of 7,000 vendors can be done within minutes.

You first enter a vendor’s details, upload a file or take a photo of an invoice to get the payee in your account. Then you can schedule payments for the date and amount you want, with vendors receiving either a check or bank transfer. Melio integrates directly with a large network of prominent utility, telecom and other billers, making it easy to schedule automatic payments. This is a key feature that sets Melio apart from other software programs that we reviewed.

We also like Melio’s integration with QuickBooks. QuickBooks is powerful alone but, when combined with Melio’s payment data, it can provide deeper insights into cash flow and automation of A/P.

Melio may not be well suited for large companies, but it’s ideal for small businesses looking for a free payment management solution. Add integration with QuickBooks to the mix and it’s easy to see why Melio is our best pick for bill management.

Zoho Books: Best Accounting Software for Process Automation

  • Zoho Books is available on iOS and Android devices, allowing you to accomplish accounting tasks from anywhere.
  • You can track bills, manage vendor credits and add reporting tags to transactions.
  • The highest tier limits you to 100,000 transactions per month.
Editor's Rating: 9.1/10
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Small business owners with few employees don’t need a complicated accounting program. They need to send invoices, automate payments and reminders and track expenses and projects. For many businesses, budget is also top of mind. Zoho Books checks all of those boxes and more, making it our best pick for automating processes.

Zoho Books is an intuitive accounting software program that offers a ton of features at an affordable price point. Mobile apps for phones, tablets and smartwatches allow you to accomplish accounting tasks from anywhere. We like that you can create and send invoices directly from the mobile app. Additionally, Zoho’s client portal also allows customers to view and pay invoices online. New features include the ability to send physical documents to customers through the Snail mail integration. Customer support is also available in Spanish.

With six pricing plans, Zoho Books offers something for businesses at all stages of growth. Zoho’s plans range between $15 per month for three users and $240 per month for 15 users. A free version is also available for a single user, albeit with reduced technical support and a limit of 1,000 invoices per year.

Zoho Books stands out beyond its pricing, thanks to its ability to automate accounting tasks. Zoho has its own proprietary programming language called Deluge that can be used to create custom functions for automation. Ultimately, we found that Zoho’s built-in automation tools stood out the most among the accounting software we reviewed.

ZarMoney: Best Accounting Software for Report Generation

ZarMoney
  • ZarMoney offers over 40 built-in reports.
  • The software connects with more than 9,600 banks in the United States and Canada.
  • Some cash-basis reports are not available.
Editor's Rating: 8.1/10

Small business owners need access to reports and data on their operations, which is exactly what ZarMoney provides. The number of insights provided by ZarMoney exceeds even those of more well-known software, such as QuickBooks.

The software includes over 40 built-in reports and many more customizable options, which is why it’s our choice as the best accounting software for report generation.

ZarMoney is an accounting software program that offers plans for entrepreneurs, small businesses and enterprises. It sticks to a simple pricing structure, charging a flat rate depending on the number of users. It offers three plans that range from $15 per month for one user to $350 per month for 30 or more users.

With the A/R tool, you can manage estimates and sales orders, offer customers payment terms and early payment discounts, text or email customers order alerts and enforce credit limits automatically at order entry and invoicing. ZarMoney supports online credit card payments and provides various payment management and tracking services.

The software connects with more than 9,600 financial institutions in the U.S. and Canada. ZarMoney imports bank transactions daily automatically for you to approve or edit. The accounting software also supports batch deposits of checks, cash and credit card sales; calculates sales tax; and transfers funds between banks.

We selected ZarMoney as the best for report generation, but this accounting software has so much more to like. With this cloud-based provider, you also get robust accounting, inventory and productivity features at a competitive rate.

Wave Financial: Best Free Accounting Software

Wave Financial
  • Wave can link to your bank and credit card accounts to track your transactions automatically.
  • It offers standard bookkeeping services.
  • Compared to other accounting software selections, Wave’s app integrations are limited.
Editor's Rating: 8.6/10

If you’re a freelancer or the owner of a small business that doesn’t store much inventory, Wave’s accounting solution is ideal for you. It offers ample features and is easy to use, making it our choice as the best free accounting software

With Wave, there are no monthly or annual fees or software license, although add-on services cost extra. This gives you the flexibility to start a business with no upfront cost and add features only as you need them.

Wave’s free accounting software does not cap the number of transactions, invoices you generate or users who have account access. If you want to accept invoice payments online, Wave charges a flat 2.9 percent plus 60 cents per credit card transaction or 1 percent (with a $1 minimum fee) for automated clearing house bank transfers.

Just because Wave is a free service doesn’t mean it skimps on features. It holds its own compared to many paid software applications, automating many billing aspects and saving small business owners precious time. For example, you can create and schedule recurring invoices and track payments. There are automatic payment reminders and automatic syncing with your bank and credit card accounts. Wave also supports PayPal, enabling you to sync that transaction data.

Even though it’s a free program, Wave offers the standard bookkeeping services of many paid alternatives on the market. Small businesses strapped for cash should take a look at Wave as it may be a great solution to save money while keeping your books organized.

Sage Business Cloud Accounting: Best Accounting Software for Customization

Sage Business Cloud Accounting
  • Sage doesn’t limit the number of users who can access the software.
  • It has 24/7 support, including live chat with Sage accounting experts and one-on-one sessions.
  • You can accept payments via invoices only through Sage’s integration with Stripe.
Editor's Rating: 9/10

Sage Business Cloud Accounting is a low-cost, cloud-based program that lets you create and send invoices, track what you’re owed and automate bank reconciliations. At $10 per month, it’s an affordable accounting tool that helps you stay on top of your accounting tasks. For those with developer skills, Sage offers extensive options for tailoring the software to your needs, making it our best pick for customization.

With the Sage Accounting Start plan, you can create, track and send invoices as well as automatically reconcile bank entries. If you need more than that, the Sage Accounting plan enables business owners to send quotes, estimates and invoices; forecast cash flow; and manage purchase invoices. For the first three months, you can use Sage to snap and post receipts to your account. The Sage Accounting plan supports unlimited users and costs $25 per month.

Sage’s program is cloud-based and easy to set up as the learning curve isn’t steep. Sage integrates with Stripe, enabling users to add a “Pay Now” button on invoices. Freelancers can automate many accounting and invoicing tasks, including the auto-posting of expenses and payments, sending and tracking invoices and setting reminders and alerts. Sage integrates with several apps, including AutoEntry, Draycir, Avalara and Credit Hound.

With accounting software, one size doesn’t fit all, which is where Sage outclasses its competitors. If you hire a software developer, you can tailor a Sage solution that meets your requirements better. That makes Sage our best pick for customization.

Neat Accounting Software: Best Accounting Software for Document Scanning

Neat Accounting Software
  • Neat offers extensive text-parsing and document-scanning features.
  • It includes standard bookkeeping and invoicing abilities.
  • Neat is more expensive than some alternatives.
Editor's Rating: 8.2/10

Neat is accounting software that provides all the bookkeeping and invoicing basics. However, Neat originally was best known for its text-parsing technology. The company deftly incorporates financial document management into its accounting offerings, making it our choice as the best accounting software for document scanning.

Despite the rise of electronic recordkeeping, some business owners ― either by habit or necessity ― may still deal with large amounts of physical paper. Neat can help declutter your financial records with the ability to scan files, capture images on a smartphone and upload files from a computer. The software’s text parsing technology then matches up data from your bank records to the physical paper records, saving huge amounts of time and hassle from errors.

Additionally, Neat can generate a slew of P&L, cash flow, balance sheet and transaction reports. You can also create custom reports for expenses, sales tax and tax categories. Neat simplifies workflow further through suggested receipt-matching and tracking which tasks remain open. As for invoicing, Neat offers customizable templates and online payment through WePay.

Neat offers robust customer support, including an app frequently asked question (FAQ) help center as well as email, chat and phone support with a Neat Expert. There is a 14-day free trial and pricing comes in at $200 for an annual subscription, a bit on the higher end for the software that we reviewed. But for that price, you can access a set of bookkeeping, invoicing and document management features that can’t be found elsewhere in one software package.

Business owners dealing with large amounts of paper will find much value in Neat’s unlimited file storage, high-level encryption, mobile access and in-person support. For that, we rate Neat as the best accounting and invoicing software for document scanning.

Accounting Software Pricing

Most accounting software programs have an array of plans to fit your business’s needs and budget. The plans typically differ in price, features and number of users who can access the software.

A subscription pricing model, which has become the industry standard, bills you monthly or annually for services. With this model, you have access to all the software’s updates as soon as they are released. Depending on the service plan you choose, subscription prices range from $5 to $60 per month.

Be wary of hidden fees, though. They lurk in things such as accepting payments online, software integrations and technical support services. To avoid overpaying for features you don’t need, make a list of what you’re looking for in an accounting system. As with grocery shopping, creating a list will prevent you from overspending.

Some accounting programs are free, such as Wave. When searching for accounting software, take advantage of free trials and demos. This will help you see how easy the software is to use and how well suited it is for your company.

Types of Accounting Software for Business

Accounting software comes in different flavors, from spreadsheets to cloud software. What makes the most sense for your business depends on the size of your operation, the complexity of your accounting and what you are hoping to achieve.

Spreadsheets

Made popular by Microsoft and Google, spreadsheets are digital documents that are used to arrange data in rows and columns. You can apply calculations and move around data with spreadsheets. Spreadsheets are a cheap option, popular with many microbusinesses and sole proprietors. However, if you want to do more than keep data organized and categorized logically, you may want to consider accounting software.

TipBottom line

Learn more about the best spreadsheet software in our 2024 buying guide.

Commercial Accounting Software

Designed with small and midsize businesses in mind, commercial accounting software enables you to manage your books, send invoices, accept payments and perform other business functions. Examples of commercial accounting software include QuickBooks, FreshBooks and Xero. The vendors typically charge monthly fees to access their accounting software in the cloud.

Enterprise Accounting Software

Large companies have more complex needs. Enterprise accounting software is designed for large businesses and typically integrates different aspects of a business in one central location.

Custom Accounting Software

Although it isn’t very common, some vendors create custom accounting software for their clients. Alternatively, a company can create its own custom accounting program if it can’t find something suitable on the market. This can be costly and isn’t the best option for many small businesses.

Key Features of Accounting Software

There are many aspects of accounting software that make it a useful tool. Most online accounting programs offer A/R, A/P, banking and reporting features. Some even include tools for inventory management, project management, time tracking and payroll. Here are some core elements of accounting software you should look for.

Bank Feed

This feature allows you to connect to your business bank and credit card accounts to receive a daily update of your transactions. This saves you the time it would take to manually upload statements into the system and it gives you a daily overview of your accounts. This feature also assists with reconciliation, making it a small daily task rather than a monthly ordeal.

Dashboard

When you log in to your account, you’ll be greeted by a dashboard with an overview of your account activity and key metrics, such as cash flow, P&L, account balances, expenses, A/P, A/R and sales. Some software lets you customize what you see first by rearranging the information.

Online Invoicing

If your business sends invoices, the ability to email them and accept online payments can help you get paid faster. Some accounting programs integrate with third-party payment processors while other vendors require you to use their in-house processing services.

Recurring Invoices

With this feature, you can schedule the software to generate and send invoices for recurring charges automatically, such as subscriptions. You can choose how frequently invoices are sent ― daily, weekly, monthly or annually ― and indicate whether there’s an end date to the billing. Many accounting software providers don’t have recurring invoice functionality (we’ve noted in our reviews which ones do).

Automatic Payment Reminders

This feature reminds your customers about upcoming and past-due payments. Some have sample email text you can use as is or customize. You can then choose when you want the reminders to be sent. Some programs also give you the option of sending thank-you emails to customers after you receive their payments.

Bank Reconciliation

Smart reconciliation tools identify potential matches between your bank transactions and the bills and invoices you’ve entered into the software, saving you the hours it would take to sift through records. You can then approve or deny the suggested matches. The best products we reviewed suggest potential matches as you reconcile your accounts and a few also include a reconciliation feature on their mobile apps.

Financial Reporting

Every accounting program generates financial reports. Some are more basic than others and some require you to subscribe to a higher plan for advanced reporting. If you need specific types of financial reports, make sure they’re included in the program and plan you choose. Detailed reports can help you interpret your financial data to make informed business decisions.

Mobile Apps

Not every accounting and invoicing program has mobile apps, but the best ones do. However, there is quite a bit of variance in app capabilities. Some can capture receipts for expense tracking only, several allow you to create and send invoices and others have almost every feature the web-based software does. As mobile work becomes increasingly convenient, it’s worth verifying that a company offers a mobile app with its software.

Integrations

The ability to connect your accounting software to the other business programs you use saves you the time of manually transferring data from one system to another. Highly rated payroll services, payment processing platforms, top point-of-sale systems and customer relationship management software are some popular types of integrations you may want to look for. Integration with systems you already use also cuts down on training time for employees.

Tracking for Billable Hours

If you’re a consultant or your business is an agency that bills clients by the hour, you want accounting software that allows you to track and bill your time or integrates with the time-tracking program you already use. This is an especially important feature for freelancers.

Inventory Management

If you have a retail or distribution business, you’ll want accounting software that tracks inventory and helps with purchase ordering. You may need to subscribe to a top-tier plan to get this feature. If you need more advanced inventory features, the best inventory software options feature a dedicated inventory management system.

Project-Based Billing

Firms, freelancers and consultants who work with clients on projects or jobs should look for accounting software that helps them track tasks and budgets. The software should allow you to invoice customers for tracked time and rebill them for project expenses.

Support for Multiple Businesses

Several programs we reviewed allow you to add more than one business to your account, though some of them charge extra for this convenience.

Artificial Intelligence

Many accounting software solutions are beginning to include artificial intellgence into its platform, either natively or via integrations. AI is being used to help detect errors, flag cash flow issues, make quicker decisions and speed up  communication with collaborators.

Benefits of Accounting Software for Business

Properly managing your business’s finances is no small task. The right accounting software can take a lot of pain out of the process. Here are several key advantages to using accounting software.

Organized Finances

An individual may be able to manage their personal finances on the fly, but recording transactions haphazardly and relying on bank statements won’t cut it for a business owner. But small businesses need to keep all their finances organized to prevent any negative surprises. Accounting software can help achieve that. It organizes and stores your financial data in one central location. Many time-consuming accounting processes can be automated, eliminating the likelihood of mistakes.

How Accounting Software Can Benefit a Small Business

Cost-Effective Solutions

Accounting software doesn’t have to be one of your biggest expenses. There are several price points that meet the needs and budgets of small businesses. We’ve highlighted free solutions too. Many are easy to set up and don’t have a steep learning curve, which means you can learn the software quickly and start managing your business’s finances.

Compliance With Tax Laws

Trying to configure business taxes can be extremely overwhelming for small business owners. Accounting software takes the guesswork out of filing taxes. Many of these programs calculate sales tax and prepare and file a variety of tax forms. That frees you to concentrate on running your business.

Did You Know?Did you know

The Section 179 deduction allows businesses to deduct the full purchase price of qualifying assets they financed during the tax year.

Improved Internal Controls

Internal controls are the procedures and measures implemented by an organization to ensure the integrity of accounting and bookkeeping. Accounting software can help prevent and detect fraud by increasing the reliability of your controls. This can reduce the probability of theft and loss of assets.

What to Expect from Accounting Software in 2024

The accounting software market is poised to continue growing as more businesses adopt cloud-based accounting programs. According to market research from Fortune Business Insights, the accounting software market is poised to reach $20.4 billion in 2026, up from $11 billion in 2018.

Here are a few mega trends that we’re keeping an eye on this year.

  • Cloud computing: With more businesses adopting a hybrid work arrangement, the need for cloud-based services is still on the rise. Many accounting software providers have moved entirely toward a software-as-a-service model and we expect this will continue into 2024.
  • Mobile apps: The accounting software industry continues to focus on making accounting software more accessible and user-friendly. Given the increasing preference for smartphones over desktops, we expect more providers to start offering mobile-first solutions and dedicated apps.
  • Artificial intelligence: Artificial intelligence (AI) and machine learning gained popularity, with many accounting applications implementing these advanced technologies to reduce manual data entry and automate redundant tasks. Analysis from Vantage Market Research found a growing demand for many accounting functions to be automated, fueling the need for more AI capabilities to be built into accounting software. We expect this trend to continue as the accounting profession seeks to reduce human error and increase productivity.
  • Blockchain: Another major development is the blockchain. We expect that blockchain technology will change accounting software by introducing more secure transaction records, thereby boosting internal controls and transparency.
  • Analytics: Professional accountants are increasingly taking on the responsibility of analyzing data and communicating business results and trends to managers and clients. Many accounting software services now offer data analysis and visualization tools and we expect those functions to expand and grow in importance over the coming years.
  • Real-time reporting: Reporting features are also growing increasingly important in a globalized world. More tax authorities are imposing real-time reporting requirements. These real-time reports contain details about your company’s profits and losses and AI technology increasingly powers this feature. We think business owners will seek software providers that support these new regulations.

Accounting Software FAQs

Accounting software is an efficient system that saves time and reduces human error. It automates accounting software functions, which eliminates the problem of inefficient and inaccurate data entry. You can also connect the software to your business bank or credit card accounts.

Important reports and financial statements, such as P&L statements and balance sheets, can be created from accounting programs. This is helpful when you’re seeking funding from an investor. Not only does accounting software help you manage your cash flow, but it also streamlines financial tasks and puts everything you need to do in one place. This reduces confusion and keeps you abreast of how your company is doing.

Any company looking for help managing its finances should use an accounting tool. Especially for small business owners, it makes managing your finances easier by automating tasks and reduces human error in your data entry. Accounting software also helps you comply with local, state and federal tax laws.

This software is useful for businesses looking to save time or set up a bookkeeping or accounting system. Accounting software lays the groundwork for that. It also helps manage your tax filing and business taxes.

The term “online bookkeeping software” frequently is used interchangeably with “online accounting software” in the small business market. The best online accounting software applications have features for keeping the books and analyzing your business’s financial health. However, there is a difference between a bookkeeper and an accountant. For our reviews, we focused on solutions that offer the ability to analyze financial data rather than solutions with basic bookkeeping options.

The best online accounting software uses bank-grade data encryption to protect your account. Furthermore, it should either require or allow you to opt in to two-factor authentication, giving you another layer of security. Because the software is in the cloud, your data is safe, even if your computer is stolen or destroyed.

If you have employees or an accountant accessing your accounting program, you can control the information they see by setting user permissions. The best accounting programs include a detailed history or audit log that shows which changes were made to your records, on what date and at what time by which user, giving you additional insight and control over any changes or entries made in your accounting program.

Yes. Some accounting software providers offer their services for free. Wave offers free accounting software and provides an array of key features to manage your financial data. Wave has no hidden fees, and you can access its invoicing, accounting and receipt-scanning functions for as long as you want at no charge. Instead of simply offering free trials, companies like Wave provide all the essentials for free.

While free accounting software is available, it’s important to find a program that gives you what you’re looking for at the standard your company requires. Free doesn’t always mean faulty, but some free services and software lack sophistication or efficiency. Cloud-based software can grow your business at an affordable price point as well.

Our best picks, which include QuickBooks Online, Xero, FreshBooks, Zoho Books and Wave, are easy to use and have tips and hints within the software, plus online support resources designed for new business owners who don’t necessarily have accounting experience, such as getting-started guides, video tutorials, webinars and how-to articles with step-by-step instructions.

Many of these companies offer free trials. You shouldn’t buy an accounting solution without first testing it to see how it works. Some companies even include hypothetical data for testing, which makes it easier to play with the program and see all the different features. We recommend exploring each platform you’re considering to get a feel for how it works before paying.

Integrating payroll with your accounting software can save you time, but you don’t necessarily have to get both systems from the same company. Many accounting software applications offer integrations with a variety of payroll services. If you prefer to use the same company for both, check out QuickBooks Online and Wave, which offer payroll as an add-on service to their accounting software. If you need more sophisticated solutions, it might be a good idea to check out the best payroll software for small businesses.

It’s not necessarily a deal-breaker if your accounting software doesn’t generate invoices. You can even learn how to create and send invoices with PayPal. However, for some companies, it is a necessity. If you’re a freelancer or a small business that expects to send invoices to clients regularly, it’s a good idea to look for accounting software that includes an invoice generator. The ability to create invoices quickly and send them to clients automatically can save your business important time. One fantastic choice for invoice generation is FreshBooks. With FreshBooks’ mobile app, you can quickly convert estimates into invoices with the click of a button.

The ideal time to switch your accounting software is as your company’s fiscal year is ending. (This can correspond with the calendar year if that’s what works best for your business.) Making a change at the start of the new fiscal year allows you to wrap up the reports from that time period and start the year reporting on new financial information, which makes the transition seamless and less complicated.

If you can’t wait until the start of the next fiscal year to make a change, the next best time is at the end of a fiscal quarter.

The whole idea behind accounting software is to make it easier for you to manage your operations. If it is too complex or requires a lot of manual entries, it may be a waste of time. Good accounting software should be easy to use, integrate with your bank and other apps and enable collaboration with your accountant. The best options also include invoicing, reporting and a mobile app.

You may want to change your accounting software for several main reasons:

  • As your business grows, your needs may change and require you to consider a different accounting vendor that offers more features and functionality.
  • Complaints among employees who use the software could also prompt a change. If your employees find it difficult to navigate, it could reduce productivity.
  • Outdated software or a platform that doesn’t integrate with other business applications is yet another reason to consider new accounting software.

The trend toward automation in accounting software has been going on for several years. Today, it is used for a myriad of processes, including extracting information from tax documents, creating journal entries and freeing up bookkeepers by eliminating manual entries. Also, automation can help accountants streamline data entry and analysis.

Mike Berner
Mike Berner
Senior Analyst & Expert on Business Operations at business.com
Mike Berner is a staff writer at business.com and Business News Daily, where he specializes in finance topics including business loans, accounting, and credit card processing. Mike has a deep background in the financial world, having written hundreds of articles and blog posts on financial markets, business and investing. He holds a B.A. in economics and a B.B.A. in finance, both from the University of Massachusetts, Amherst. Prior to his writing career, he performed financial analysis and research as an economic analyst.
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