You’ve likely heard the paradoxical phrase: “It takes money to make money.” That’s not an excuse to go throw around cash willy-nilly, but it’s a justifiable reason to spend your cash on wise investments.
Growth happens when you spend your money in the right way to allow your business to make more cash. On the other hand, failure follows when you consistently spend your money in the wrong way and your business loses cash as a result. Small business owners must walk a fine line between growth and the risk of failure to find success—and that’s where bookkeeping software comes in handy.
Raise your hand if any of the following are true:
- You’re not an accounting expert.
- You don’t particularly like numbers (especially math).
- Your financial records are all over the place.
- Your business is on a tight budget.
- You have too much to do and too little time.
If any of those scenarios sound familiar, your small business may benefit from using accounting software. The best bookkeeping software for growing businesses will save you time and money while helping you walk the delicate tightrope between growth and failure.
What is accounting software?
Accounting software helps you manage and record the day-to-day bookkeeping needs of your small business. The best small business accounting software connects to your bank account, helps you manage invoices and payments, and offers real-time reporting to give you clear information about the health of your business. It should also help you manage and pay your taxes.
Accounting software often includes accounting tools that can make managing your day-to-day business easy and simple. Often these tools include balance sheets, income statements, financial statements for every quarter and year, information about your customers and their orders, and a platform that is easily accessed online by multiple users for your account.
The best accounting software for small businesses will connect to your bank account to automatically match transactions and connect to your payroll system for easy payroll management. Tax accounting is also easier with automatic calculation, filing, and payment of your taxes at the right times during the year.
How to choose the best accounting software for your small business.
As you research the best accounting software for your small business, consider the features that your business needs today and the integrations that will make your day-to-day bookkeeping both fast and easy. Look for accounting software that allows multiple users for your account if your finance team is larger than just yourself, allows branding customization for invoices and estimates sent to customers, and keeps fees low on both credit card and ACH payments.
Best accounting software of 2024.
- Best Free Software: Wave
- Best Software For Ease Of Use: Xero
- Best Robust Software: Sage
- Best Software For Freelancers: FreshBooks
BEST FREE ACCOUNTING SOFTWARE
Wave
Wave accounting software is a comprehensive financial management tool designed for small businesses and freelancers. It offers a range of features, including invoicing, expense tracking, payroll management, and financial reporting. Wave Accounting stands out for its user-friendly interface, accessibility, and affordability, as it provides many essential functionalities for free.
With Wave, users can efficiently track income and expenses, generate professional invoices, and gain valuable insights into their business finances. Additionally, Wave integrates with other business tools and offers optional paid add-ons, making it a versatile solution for managing financial operations. While Wave is a great free option, you may find that your business outgrows the platform at some point.
BEST SOFTWARE FOR EASE OF USE
Xero
Xero accounting software is a dynamic and versatile cloud-based solution specifically designed to cater to the needs of small to medium-sized businesses. It boasts an extensive range of features, encompassing everything from seamless invoicing and precise expense tracking to efficient bank reconciliation and comprehensive financial reporting.
With its user-friendly interface and powerful functionality, Xero simplifies the complexities of financial management and provides businesses with real-time insights. Additionally, Xero’s compatibility with numerous third-party applications allows for seamless integration, while its convenient mobile app ensures accessibility on the go. Collaborative features further enhance its appeal, enabling effortless collaboration with accountants and bookkeepers. When it comes to modern and efficient accounting software, Xero truly stands out as a go-to choice for businesses of all types.
BEST MOST ROBUST ACCOUNTING SOFTWARE
Sage
Sage accounting software is an all-encompassing and feature-rich solution tailored to meet the diverse financial management needs of businesses, regardless of their size, though it might be a bit overkill for small businesses. With an extensive range of functionalities, including invoicing, expense tracking, bank reconciliation, and financial reporting, Sage provides a comprehensive suite of tools to streamline and automate accounting processes.
Its user-friendly interface and intuitive design make it accessible to both accounting professionals and those new to financial management. Additionally, Sage offers advanced capabilities such as multi-currency support, inventory management, and payroll processing, catering to businesses with complex financial requirements. With its scalability and customizable options, Sage accounting software stands as a dependable and versatile choice for organizations seeking to enhance their accounting efficiency and effectiveness.
BEST ACCOUNTING SOFTWARE FOR FREELANCERS
FreshBooks
FreshBooks offers a low price point and features relevant to freelancers. It provides the things you need (like invoicing, time tracking, and financial reporting) without any of the complexities you don’t need (like extensive inventory management or multiple modules.)
FreshBooks is a popular cloud-based accounting software specifically designed for small businesses and self-employed professionals. The software enables efficient client invoicing and payment processing, tracks expenses and receipts, and provides real-time insights into business performance. FreshBooks also integrates with various payment gateways and third-party apps, allowing for seamless collaboration and enhanced productivity. Overall, FreshBooks is a reliable and user-friendly accounting solution that helps businesses stay organized, save time, and make informed financial decisions.
Methodology
In selecting the best accounting software, we compared 10 accounting software platforms across various factors, including price point, target audience, features, and other relevant aspects. The chosen accounting software should align with the specific needs and budget of your business.
We looked at starting price point for each application, but your price will vary depending on your revenue, number of users, and features needed. Remember that if you chose to process payments through your accounting software, that will be an additional expense.
We also considered other aspects of these programs such as the target audience, features such as invoicing, expense tracking, financial reporting, scalability, integration with third-party software, user experience, customer support, and data security are also significant considerations. User reviews and industry reputation were also taken into account.
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