The Best Accounting Software and Invoice Generators for 2018
No matter what type of business you have, you need accounting software to manage the money moving in and out of your accounts. However, choosing which accounting software application is best for your operation can be a time-consuming, agonizing process. There are hundreds of options, and accounting software companies offer several plans, each with a different mix of features.
Most small businesses require accounting software that has both accounts receivable and payable features, as well as banking, reporting and inventory management tools. These are the qualities we looked for as we evaluated accounting software to recommend. If, however, you don't carry inventory and primarily use (or plan to use) accounting software to bill clients, or if your vendors still require paper checks, we've got recommendations for you as well.
Whether you need a well-rounded accounting solution or something more specific, we've selected the software that's right for your business. QuickBooks, Xero, Zoho Books, Wave, FreshBooks and PrintBoss top our list of accounting software for small businesses. Read more about them below, along with pricing information and tips, and the features you should look for in accounting software.
Xero is the best accounting software for small businesses that use Macs because it's a cloud-based system that you can use on any computer without compromising features. It includes the full spectrum of accounting tools in all of its plans, supports an unlimited number of users and integrates with more than 600 business applications, allowing you to customize the software to meet the specific needs of your business. Its midrange and top plans include payroll, providing additional value to businesses using this accounting system. (Payroll is not available in every state. Check Xero's website to see if it's available in your state.)
Three plans are available: Starter, Standard and Premium. Although it includes all the software's features, the Starter plan is too limited for most small businesses – it only supports five invoices and quotes, five bills, and 20 bank transaction reconciliations each month. The Standard plan has no such limitations and includes payroll for up to five people. The Premium plan can be expanded to support payroll for additional employees and supports multiple currencies.
We recommend FreshBooks as the best billing and invoice software for small businesses. In addition to easily invoicing clients, you can use it to manage and collaborate on projects, track billable time and expenses, send automatic past-due reminders, and accept invoice payments online. FreshBooks is primarily for consultants, freelancers, agencies, and firms that are project- or client-based and don't carry inventory.
Three plans are available from FreshBooks: Lite, Plus and Premium. All plans are full-featured; the difference is the number of clients you can bill. The Lite plan supports up to five active clients, while the Plus plan supports up to 50 and the Premium supports up to 500. If you opt to pay annually rather than monthly, you receive a 10 percent discount.
Zoho Books is intuitive accounting software for very small businesses. It offers three service plans: Basic, Standard and Professional. All plans allow you to connect the software to your bank accounts, create invoices, schedule recurring transactions, and track expenses, projects and timesheets.
The Basic plan supports two users (one user and one accountant), 50 contacts (customer and vendors) and five automated workflows. The Standard plan supports three users (two users and one accountant), 500 contacts and 10 workflows. It also allows you to track bills, manage vendor credits and add reporting tags to transactions. The Professional plan supports up to 10 users and workflows, and an unlimited number of contacts. In addition to the capabilities of the Standard plan, you can manage inventory and create purchase orders.
Intuit's QuickBooks Online is the best accounting software for small businesses because it offers a rich selection of features, including tools for accounts payable, accounts receivable, inventory and time tracking. It comes with mobile apps for your Android and Apple tablets and phones, and integrates with hundreds of business applications, such as those for email marketing, payment processing and e-commerce platforms, allowing for maximum customization.
It has one service tier for freelancers and three for small businesses: Simple Start, Essentials and Plus. All plans connect to banks, track income and expenses, create invoices, and run reports. The freelance and Simple Start plans support a single user, while Essentials supports three and Plus supports five. With the Essentials plan you can track bills, manage users, track time and schedule recurring invoices. However, if you need advanced features, such as inventory management and purchase ordering, you'll need the Plus plan.
For the best check writing software for small businesses, our pick is PrintBoss. It's compatible with more than 40 accounting programs, including QuickBooks, Sage and Microsoft Dynamics, and runs on multiple Windows operating systems, including Windows 10. However, it doesn't work on Macs.
You can use PrintBoss to print checks from multiple bank accounts onto blank check stock. It allows you to add your logo, adjust the font and add void-after statements. It can store signatures, and you can set rules for using them on checks. It remembers the last check number you printed when you use the program with QuickBooks or other accounting software.
Wave Financial is the best free accounting software for small businesses because it's easy to use and offers a strong set of accounts receivable accounting tools, including mobile apps for Android and Apple tablets and phones. There's only one plan with Wave, and it's free. Rather than charging a monthly subscription fee, the company makes its money through its credit card processing and payroll services. However, you're not required to use these ancillary services to use the accounting software.
Wave connects to your business bank accounts and credit cards, and it automatically downloads your transactions. It includes tools for invoicing, tracking expenses and reporting, and has automated recurring billing and payment reminders. The software supports an unlimited number of collaborators, so you can invite your accountant and business partners to the software, and you can manage multiple businesses from one account. However, it lacks inventory tracking, purchase ordering, billable hour tracking and smart reconciliation features that predict transaction matches.
Below are all of our reviews for accounting software and related categories. Our coverage includes reviews of the best accounting software, billing and invoice software, bookkeeping services, and check writing software. See all of our reviews below.
Many cloud-based accounting software companies offer a promotional rate for your first few months using the system, with the lowest tier often costing $10 or less per month. Top tiers are usually less than $50 per month, though there are some exceptions; for example, if the software includes ancillary services, such as payroll or CRM solutions, the top tiers are more expensive.
There are no additional fees for software updates. You get the new features and improvements as soon as they're released, and the cost is already included in your monthly fee, so you always have the latest version of the software. Mobile apps are often provided at no additional cost.
Desktop software can be a cheaper option, since you pay for a software license upfront; however, this varies, with some programs being more expensive. In addition to the license, you'll pay for software updates, which may be an annual expense. Some companies charge extra for priority support, and others charge a monthly fee if you want to add a companion app to the system that gives you cloud access to your desktop data.
Free accounting software programs are available online, and these can be a terrific option for freelancers and very small businesses. These software companies make their money by providing ancillary paid services, such as credit card processing or payroll, or offering paid tiers that include more tools. However, if you need advanced accounting features, you'll want to upgrade or switch to a paid program.
If several people will be using the software, or if you want to add more features or connect with other systems, you need to consider some factors specific to your business before you can evaluate accounting programs head to head. After you've narrowed your choices down to three or four options, gather some numbers:
How many people will use the accounting software? Keep in mind that some systems don't count an outside accountant toward your allotted number of users, but others do, so you'll want to check with the company if user number affects cost.
How many clients or contacts do you have?
How many invoices, bills and transactions do you generate each month?
If you intend to add payroll services to your accounting system, how many people does your business employ?
Next, you need to evaluate whether the features you need are included in each program, and at which tier. If the features are available as add-ons or integrations, you need to find out what they cost.
Finally, you need to decide if you plan to use ancillary services with the software. Does the software include features that you need and would otherwise pay extra for? Are there integrations for programs you already use? If so, is there an extra cost to connect it to the accounting software? These programs could include payroll, credit card processing, time tracking, CRM, marketing, inventory management, POS and e-commerce solutions.
By looking at the complete picture of how much the software costs and how it fits into your existing systems, you can determine which accounting software is the best value for your business.
Here are a few more points to consider as you evaluate costs for accounting software:
Is technical support included, or does it cost extra?
Do you need the software to support multiple businesses? Some programs allow you to set up several businesses under one account; others require you to create a separate account for each business.
Many accounting software providers offer a discount if you pay annually rather than monthly.
Before signing up for a free trial, check if doing so causes you to forfeit a promotional rate or discount. If so, get a feel for how the software works by trying out a demo or watching the company's how-to videos.
After asking experts and small business owners what they look for in accounting software, we searched online for the best small business accounting systems on the market, researching accounting software reviews and articles to find new programs. We added these to our existing list that included accounting software we were already familiar with and programs vendors had previously pitched to us.
We then began the process of narrowing down the list, based on different use cases and the criteria listed below. We scoured each company's website to learn about the software, checking out blogs, guides and knowledgebases to find product details. We watched how-to videos or feature demos (where available), and read user reviews.
After that, we signed up for trial accounts and began our hands-on testing. We created customer and vendor profiles, entered inventory into the system, and customized invoice templates. We created estimates, invoices and purchase orders. We tracked expenses and ran reports. Along the way, we noted how user-friendly the software is, how easy it is to find key features and how capable each program is at basic tasks.
As part of our testing, we contacted customer service teams as small business owners looking for accounting software. We asked a variety of questions, which helped us measure the quality of customer support and clarify any issues or concerns we encountered in our research and testing.
Our list started with nearly 70 accounting software products, and the following 11 products made it to our short list: Billy, FreeAgent, FreshBooks, QuickBooks Online, Kashoo, OneUp, Sage One, Wave Financial, Xero, ZipBooks and Zoho Books.
We evaluated each accounting program on the following criteria:
Ease of use
Integration with third-party software
Mobile app availability and features
Service limitations, such as number of users, customers, invoices or transactions
Availability of additional services, such as payroll, credit card processing and tax prep
State of the Industry
Accounting software is a competitive market, and companies seek to add value to their products by automating repetitive tasks, reducing redundant data entry by integrating with other business programs, and taking their software to the cloud to give you anytime, anywhere access to your financial data.
Although desktop accounting software is still available and its proponents tout richer features, this distinction is disappearing as more companies move their programs online and improve them. In addition to your financial data being accessible from anywhere you have internet, many accounting systems offer mobile apps. Some even have apps for smartwatches.
Automated features that eliminate or simplify repetitive tasks are increasingly popular in accounting software. For example, many systems allow you to schedule recurring invoices, automatically send payment reminders as a due date approaches or when an invoice is past due, and send thank-you emails to acknowledge received payments. Some systems offer smart bank reconciliation tools that suggest transaction matches for you to approve, and these tools increase in accuracy the more you use the software. Others can be set up to automatically send purchase orders when your inventory falls below a set threshold.
In addition to syncing with your business bank accounts, many accounting systems offer integrations with other business programs that use or generate the data you need in your accounting program, saving you the time of manually entering or transferring information from sales and other activities. Some accounting applications natively include ancillary features, such as time tracking and project management.
Is Online Accounting Software Secure?
The best online accounting software uses bank-grade data encryption to protect your account. Further, it should either require or allow you to use 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 what information they see by setting user permissions. The best accounting software also includes a detailed history, or audit log, that shows what 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 in your accounting program.
What Features Do You Need?
The best accounting programs include a full suite of features for both accounts receivable and accounts payable, as well as inventory or project management. They sync with your business bank accounts to give you an up-to-date overview of the money flowing in and out of your business. They include features that help you move to a paperless system, such as the ability to attach images of receipts to expense reports and send invoices via email. Most also include mobile apps that you can use for a variety of tasks, including capturing expenses and creating invoices.
No matter which accounting software you choose, you should be able to complete a number of basic tasks such as these:
Managing customer contact information
Creating invoices, with a minimum of two output options: email, print or convert to PDF
Customizing invoices with your company's logo and payment terms
Tracking business expenses
Running a variety of financial reports
If you're looking primarily for accounting software that makes invoicing easy, consider FreshBooks. If you need check writing software to use with your accounting application, check out PrintBoss. If your business needs inventory management tools that exceed the capabilities of most accounting software, our inventory software review can help you find a solution. Some of these inventory programs integrate with our best picks for accounting software.
You Want to Save Time
Many accounting tasks are repetitive, and online accounting software can automate some of these tasks to streamline your workflow and save you time. Look for software with the following automations.
Convert sales orders and quotes to invoices: Once a customer accepts an estimate, sales order or quote, you can convert the document to an invoice with just a few clicks. QuickBooks Online, FreeAgent and OneUp can do this with a single click. You can then edit the new invoice with any changes you need to make.
Recurring invoices: You can set up the system to send invoices for recurring charges, such as subscriptions. More than half of the products we reviewed offer this feature.
Automatic payment reminders: This feature helps you remind customers about upcoming and past-due payments. Half of the programs we reviewed include this feature, and some, such as Zoho Books, have sample email text that 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 feed: Every program we reviewed gives you the option of connecting with your business bank accounts to receive a daily update of your transactions. This saves you the time of manually uploading statements into the system. It gives you a daily rather than monthly overview of your accounts. This also assists with reconciliation, allowing you to make it a small daily task rather than a monthly ordeal.
Reconciliation: Smart reconciliation tools identify potential matches between your bank transactions and the bills and invoices you've entered into the accounting software, saving you the hours it would take to sift through records for this information. You can then approve or deny the suggested matches. The majority of the products we reviewed suggest potential matches as you reconcile your accounts, and a few also include a reconciliation feature on their mobile apps.
Additional Features to Consider
Other features that may help you decide which accounting software is the best for your business include the following:
Track billable hours: If you're a consultant or your business is an agency that bills its clients by the hour, you want accounting software with this feature. Only four of the programs we reviewed allow you to both track and bill your time. FreeAgent allows you to combine multiple timeslips on a single line or list them separately. Some programs integrate with time-tracking programs, including some of the systems in our time and attendance services and tracking management software review.
PayPal integration: All the accounting software we reviewed either offers payment processing or integrates with a credit card processing company so you can accept invoice payments online. Several of these products also integrate with PayPal, allowing your customers to pay their invoices through this popular platform.
Supports multiple businesses: More than half of the programs we reviewed allow you to add more than one business to your account, though some companies charge extra for this convenience.
Payroll: If you're looking for accounting software with payroll, four of the products on our list may suit your needs, as they either include this feature or offer it as an integration. Xero includes payroll with its standard and premium tiers, QuickBooks Online and Wave offer it as an add-on for an extra cost, and Kashoo integrates with Paychex, which you would set up and pay for separately. Check out our online payroll services review for additional options.
The variety of features that different accounting software includes lets you choose a program that fits your business's needs. It also automates your workflow and saves you the time and tedium of repetitive accounting tasks.
The best online accounting programs for small businesses integrate with your bank accounts and make reconciling your accounts less time-consuming and difficult. They're also intuitive to use, so you can easily figure out how to accomplish basic tasks. QuickBooks Online, Xero, Zoho Books, FreshBooks and Wave met these requirements and more, and PrintBoss met our requirements for the best check writing software to use with your accounting program.