Coaching

14 Best Accounting Software for Small Businesses and Their Benefits

This guide explores the 14 best accounting software options for small businesses, emphasizing features like invoicing, expense tracking, and financial reporting. It highlights benefits such as time savings, improved accuracy, and simplified tax compliance, essential for efficient financial management.

15-18 minutes
Listen to this episode of Mumbition The Podcast now!

Accounting software is a computer program or application that helps businesses manage their financial transactions, including income, expenses, invoicing, and reporting. It automates many of the manual processes involved in bookkeeping, saving time and reducing the risk of errors.

A small business is a privately owned company with a limited number of employees and relatively low revenue compared to larger corporations. In Australia, a small business is generally defined as having fewer than 20 employees for non-manufacturing businesses and fewer than 100 employees for manufacturing businesses.

Accounting software is crucial for small businesses as it streamlines financial management, provides real-time insights into the company's financial health, and ensures compliance with tax regulations. It allows small business owners to focus on growing their business while maintaining accurate financial records.

When selecting accounting software for a small business, it is essential to consider factors such as ease of use, affordability, scalability, and compatibility with existing systems. The software should also offer features that cater to the specific needs of the business, such as inventory management, payroll processing, and invoicing.

Main Benefits of Having Accounting Software for Small Businesses

  1. Time-saving: Accounting software automates repetitive tasks, reducing the time spent on manual data entry and calculations.
  2. Improved accuracy: By minimising human error, accounting software ensures that financial records are accurate and up-to-date.
  3. Real-time financial insights: With accounting software, small business owners can access real-time financial data, enabling them to make informed decisions quickly.
  4. Enhanced collaboration: Cloud-based accounting software allows multiple users to access and update financial information from anywhere, fostering collaboration among team members.
  5. Simplified tax compliance: Accounting software helps small businesses stay compliant with tax regulations by generating accurate reports and simplifying the tax filing process.

Studies have shown that small businesses that use accounting software experience significant benefits. A survey conducted found that 71% of small businesses that use accounting software reported improved financial visibility, while 59% reported increased productivity. Additionally, a study by Xero revealed that small businesses using their software saw an average 30% increase in revenue and a 37% reduction in administrative costs.

There are several accounting software options available for small businesses in Australia, each with its unique features and benefits. Some of the top choices include:

  1. QuickBooks Online: A cloud-based accounting software by Intuit for small businesses, offering invoicing, expense tracking, and financial reporting.
  2. Wave: A free, cloud-based accounting software for freelancers and small businesses with invoicing, accounting, and receipt scanning features.
  3. Zoho Corporation: A suite of online productivity tools, including Zoho Books, a cloud-based accounting software with invoicing, expense tracking, and inventory management.
  4. FreshBooks: A cloud-based accounting software for small businesses and freelancers, providing invoicing, time tracking, and expense management features.
  5. Xero: A user-friendly, cloud-based accounting software with invoicing, bank reconciliation, and inventory management features.
  6. Sage: A provider of accounting and business management software for small to medium-sized businesses, including Sage 50cloud and Sage Business Cloud Accounting.
  7. NetSuite: A cloud-based business management platform that includes accounting, ERP, and CRM functionalities for medium to large-sized businesses.
  8. ZipBooks: A cloud-based accounting software for small businesses offering invoicing, expense tracking, and financial reporting features with a free starter plan.
  9. MYOB Software Features: MYOB (Mind Your Own Business) is a comprehensive accounting software solution designed to streamline financial management for businesses. Common features found in MYOB accounting software include:
  10. Activity Group, LLC: A company that develops and provides accounting and business management software solutions.
  11. Tipalti: A cloud-based accounts payable automation and global mass payment platform for medium to large-sized businesses.
  12. OneUp: A cloud-based accounting and inventory management software for small businesses, offering features like invoicing, CRM, and inventory tracking.
  13. Kashoo: A cloud-based accounting software for small businesses, providing features such as invoicing, expense tracking, and financial reporting.
  14. ZarMoney: A cloud-based accounting software for small to medium-sized businesses, offering features like invoicing, inventory management, and multi-currency support.

1. QuickBooks Online

  • QuickBooks Online is a cloud-based accounting software developed by Intuit, designed for small to medium-sized businesses.
  • Costs: QuickBooks Online offers multiple pricing plans, ranging from $10 to $60 per month, depending on the features and number of users required.
  • Main functionalities include invoicing, expense tracking, bank reconciliation, financial reporting, and payroll management.
  • QuickBooks Online has a user-friendly interface, making it relatively easy to use, even for those with limited accounting experience.
  • Pros: Cloud-based access, extensive features, user-friendly interface, and integration with various third-party apps. 
  • Cons: Higher pricing compared to some competitors and some reported occasional syncing issues with bank accounts.
  • QuickBooks Online can be a good choice for small business owners due to its comprehensive features, ease of use, and scalability as the business grows.

2. Wave

  • Wave is a free, cloud-based accounting software designed for freelancers and small businesses.
  • Costs: Wave offers its core accounting features for free, with optional paid services such as payment processing and payroll.
  • Main functionalities include invoicing, expense tracking, bank reconciliation, and financial reporting.
  • Wave has a simple and intuitive interface, making it easy for users to navigate and manage their finances.
  • Pros: Free to use, user-friendly interface, and double-entry accounting. 
  • Cons: Limited customisation options and no inventory management feature.
  • Wave can be a good choice for small business owners who are looking for a cost-effective accounting solution with basic features.

3. Zoho Corporation

  • Zoho Corporation is a suite of online productivity tools and software, which includes Zoho Books, a cloud-based accounting software.
  • Costs: Zoho Books offers plans starting from $9 per month, with additional costs for extra users and features.
  • Main functionalities include invoicing, expense tracking, bank reconciliation, inventory management, and financial reporting.
  • Zoho Books has a clean and user-friendly interface, making it easy to navigate and use for small business owners.
  • Pros: Affordable pricing, integration with other Zoho apps, and good customer support. 
  • Cons: Limited third-party integrations and occasional syncing issues.
  • Zoho Books can be a good choice for small business owners who are already using other Zoho products and are looking for an affordable accounting solution.

4. FreshBooks

  • FreshBooks is a cloud-based accounting software designed for small businesses and freelancers.
  • Costs: FreshBooks offers plans starting from $15 per month, with additional costs for extra users and features.
  • Main functionalities include invoicing, expense tracking, time tracking, project management, and financial reporting.
  • FreshBooks has a simple and intuitive interface, making it easy for users to manage their finances and client relationships.
  • Pros: User-friendly interface, excellent customer support, and strong invoicing features. 
  • Cons: Limited inventory management and no payroll functionality.
  • FreshBooks can be a good choice for small business owners who prioritise invoicing, time tracking, and project management features.

5. Xero

  • Xero is a cloud-based accounting software designed for small to medium-sized businesses.
  • Costs: Xero offers plans starting from $9 per month, with additional costs for extra features and users.
  • Main functionalities include invoicing, expense tracking, bank reconciliation, inventory management, and financial reporting.
  • Xero has a user-friendly interface and provides a wide range of features, making it suitable for businesses with more complex accounting needs.
  • Pros: Extensive features, integration with over 700 third-party apps, and strong security measures. 
  • Cons: Steeper learning curve compared to some competitors and higher pricing for advanced plans.
  • Xero can be a good choice for small business owners who require a comprehensive accounting solution with a wide range of integrations.

6. Sage

  • Sage is a provider of accounting, financial, and business management software for small to medium-sized businesses.
  • Costs: Sage offers various products with different pricing plans, ranging from $10 to $60 per month, depending on the features and number of users required.
  • Main functionalities include invoicing, expense tracking, bank reconciliation, inventory management, payroll, and financial reporting.
  • Sage products have a more traditional interface compared to some cloud-based competitors, which may require more time for users to adapt.
  • Pros: Comprehensive features, strong reputation, and good customer support. Cons: Steeper learning curve and higher pricing compared to some competitors.
  • Sage can be a good choice for small business owners who require a robust accounting solution with a wide range of features and prefer a more traditional interface.

7. NetSuite

  • NetSuite is a cloud-based business management platform that includes accounting, ERP, and CRM functionalities designed for medium to large-sized businesses.
  • Costs: NetSuite pricing is based on a customised quote, depending on the specific needs and size of the business.
  • Main functionalities include financial management, inventory management, order management, CRM, and e-commerce.
  • NetSuite has a comprehensive and feature-rich interface, which may require more training and resources to fully utilise.
  • Pros: Extensive features, scalability, and strong integration capabilities. 
  • Cons: Higher pricing, complexity, and longer implementation time compared to other options.
  • NetSuite can be a good choice for small business owners who are rapidly growing and require a comprehensive, all-in-one business management solution.

8. ZipBooks

  • ZipBooks is a cloud-based accounting software designed for small businesses and freelancers.
  • Costs: ZipBooks offers a free Starter plan, with paid plans starting from $15 per month for additional features and users.
  • Main functionalities include invoicing, expense tracking, bank reconciliation, and financial reporting.
  • ZipBooks has a user-friendly interface, making it easy for small business owners to manage their finances without extensive accounting knowledge.
  • Pros: Free Starter plan, simple interface, and good customer support. 
  • Cons: Limited features compared to some competitors and no inventory management functionality.
  • ZipBooks can be a good choice for small business owners who are looking for a cost-effective accounting solution with basic features and ease of use.

9. MYOB Software

MYOB (Mind Your Own Business) offers a comprehensive suite of features designed to streamline financial management for businesses. Key features include:

  1. Invoicing: Efficiently create, send, and manage invoices to ensure timely payments and track outstanding receivables.
  2. Expense Tracking: Monitor and categorize expenses, facilitating accurate financial records and effective cash flow management.
  3. Bank Reconciliation: Automate the reconciliation of bank transactions to minimize manual errors and save time.
  4. Financial Reporting: Generate detailed financial reports, such as profit and loss statements, balance sheets, and tax summaries, to gain valuable insights into business performance.

These features enable businesses to manage their finances effectively, adhere to tax regulations, and make well-informed financial decisions.

10. Acclivity Group, LLC

  • Acclivity Group, LLC is a software company that develops and provides accounting and business management solutions, including AccountEdge and Checkout Point of Sale.
  • Costs: Acclivity Group's products have varying price points, with AccountEdge Pro starting at a one-time fee of $399, and Checkout Point of Sale offering monthly plans starting at $75.
  • Main functionalities include accounting, invoicing, inventory management, and point of sale features, depending on the specific product.
  • The difficulty of using Acclivity Group's products varies, with AccountEdge Pro being more suitable for users with some accounting knowledge and Checkout Point of Sale being more user-friendly for retail businesses.
  • Pros: Comprehensive features, strong inventory management, and good customer support. 
  • Cons: Higher upfront costs for some products and a steeper learning curve compared to some cloud-based solutions.
  • Acclivity Group's products can be a good choice for small business owners who require a robust accounting and business management solution, particularly for those in the retail industry.

11. Tipalti

  • Tipalti is a cloud-based accounts payable automation and global mass payment platform designed for medium to large-sized businesses.
  • Costs: Tipalti pricing is based on a customised quote, depending on the specific needs and transaction volume of the business.
  • Main functionalities include invoice processing, payment execution, supplier management, and compliance and risk management.
  • Tipalti is designed to automate complex accounts payable processes, which may require some training and onboarding for users to fully utilise its features.
  • Pros: Automation of manual processes, reduced payment errors, and improved compliance. Cons: Higher costs and complexity compared to solutions designed for smaller businesses.
  • Tipalti can be a good choice for small business owners who are rapidly growing, have a high volume of supplier payments, and need to streamline their accounts payable processes.

12. OneUp

  • OneUp is a cloud-based accounting and inventory management software designed for small businesses.
  • Costs: OneUp offers plans starting from $9 per month, with additional costs for extra users and features.
  • Main functionalities include invoicing, expense tracking, bank reconciliation, inventory management, and CRM features.
  • OneUp has a user-friendly interface, making it easy for small business owners to manage their finances and inventory in one platform.
  • Pros: Affordable pricing, all-in-one solution for accounting and inventory, and good customer support. 
  • Cons: Limited third-party integrations and no payroll functionality.
  • OneUp can be a good choice for small business owners who need an affordable, integrated solution for managing their accounting and inventory needs.

13. Kashoo

  • Kashoo is a cloud-based accounting software designed for small businesses and freelancers.
  • Costs: Kashoo offers a single plan at $19.95 per month, with no additional costs for extra users.
  • Main functionalities include invoicing, expense tracking, bank reconciliation, and financial reporting.
  • Kashoo has a simple and intuitive interface, making it easy for users to manage their finances without extensive accounting knowledge.
  • Pros: Straightforward pricing, user-friendly interface, and good customer support. 
  • Cons: Limited features compared to some competitors and no inventory management functionality.
  • Kashoo can be a good choice for small business owners who are looking for a simple and affordable accounting solution with basic features.

14. ZarMoney

  • ZarMoney is a cloud-based accounting software designed for small to medium-sized businesses.
  • Costs: ZarMoney offers plans starting from $15 per month, with additional costs for extra users and features.
  • Main functionalities include invoicing, expense tracking, bank reconciliation, inventory management, and multi-currency support.
  • ZarMoney has a user-friendly interface and provides a comprehensive set of features, making it suitable for businesses with more complex accounting needs.
  • Pros: Affordable pricing, multi-currency support, and good customer support. Cons: Limited third-party integrations and no payroll functionality.
  • ZarMoney can be a good choice for small business owners who require a comprehensive accounting solution with multi-currency support at an affordable price point.

What is an Accounting Software?

Accounting software is a computer program or application that assists businesses in managing their financial transactions, including income, expenses, invoicing, and reporting. It automates and streamlines the process of bookkeeping, which traditionally involves manual data entry and calculation. The main functionalities of accounting software typically include:

  1. Recording financial transactions
  2. Generating invoices and receipts
  3. Tracking expenses and income
  4. Reconciling bank statements
  5. Producing financial reports

Accounting software has its roots in the early 1980s when personal computers became more widely available. The first accounting software packages were developed to simplify the tedious and time-consuming process of manual bookkeeping. As technology advanced and businesses increasingly relied on computers, accounting software evolved to offer more features and integration with other business tools.

What are the Benefits of Accounting Software for Small Businesses?

Accounting software offers several key benefits for small businesses:

  1. Time-saving: Automating financial tasks reduces manual data entry and calculation, saving valuable time.
  2. Improved accuracy: Minimising human error, accounting software ensures that financial records are accurate and up-to-date.
  3. Real-time financial insights: With accounting software, small business owners can access real-time financial data, enabling informed decision-making.
  4. Enhanced collaboration: Cloud-based accounting software allows multiple users to access and update financial information from anywhere, fostering teamwork.
  5. Simplified tax compliance: Accounting software helps small businesses stay compliant with tax regulations by generating accurate reports and simplifying tax filing.

These benefits help small business owners by giving them more time to focus on growing their business, providing a clearer picture of their financial situation, and reducing the stress associated with managing finances and tax compliance.

Do Small Businesses Need Accounting Software?

Yes, small businesses need accounting software. In today's fast-paced and competitive business environment, manually managing financial transactions is often no longer feasible or efficient. Accounting software is essential for small businesses for several reasons:

  1. Accurate and timely financial reporting: Accounting software ensures that financial records are accurate and up-to-date, enabling small business owners to make informed decisions based on their current financial situation.
  2. Streamlined financial management: Automating financial tasks such as invoicing, expense tracking, and bank reconciliation saves small business owners time and effort, allowing them to focus on core business activities.
  3. Scalability: As a small business grows, its financial management needs become more complex. Accounting software is designed to scale with the business, offering features and integrations that support growth.
  4. Compliance: Accounting software helps small businesses stay compliant with tax regulations and other financial reporting requirements, reducing the risk of penalties and legal issues.

Evidence supporting the need for accounting software among small businesses can be found in various studies. For example, a survey by Wasp Barcode Technologies found that 50% of small businesses fail within the first five years, often due to poor financial management. 

What are the Most Affordable Accounting Softwares for Small Businesses?

From the list of accounting software options discussed earlier, some of the most affordable solutions for small businesses include:

  1. Wave: Offers free accounting features, with optional paid services for payment processing and payroll.
  2. ZipBooks: Provides a free Starter plan, with paid plans starting at $15 per month for additional features and users.
  3. Zoho Books: Offers plans starting at $9 per month, with additional costs for extra users and features.
  4. Kashoo: Provides a single plan at $19.95 per month, with no additional costs for extra users.
  5. OneUp: Offers plans starting at $9 per month, with additional costs for extra users and features.

These affordable accounting software options provide small businesses with essential features for managing their finances effectively without breaking the bank.

What are the Recommended Accounting Software for Small Businesses?

The recommended accounting software for small businesses depends on various factors, such as the size of the business, industry, budget, and specific requirements. However, based on the features, ease of use, and overall value, some of the top recommendations include:

  1. QuickBooks Online: QuickBooks Online is a widely-used and feature-rich accounting software that caters to the needs of various small businesses. Its user-friendly interface, extensive integrations, and scalability make it a top choice for many small business owners.
  2. Xero: Xero is another popular choice for small businesses, offering a comprehensive set of features and a user-friendly interface. Its strong security measures and wide range of integrations make it a reliable and efficient option.
  3. FreshBooks: FreshBooks is an excellent choice for service-based small businesses and freelancers, with its focus on invoicing, time tracking, and project management features. Its intuitive interface and excellent customer support make it a standout option.

These recommended accounting software options provide small businesses with robust features, ease of use, and the flexibility to scale as their business grows.

What is the Accounting Software Used by Mumpreneurs?

Mumpreneurs, or mothers who run their own businesses, just like any other business owner can use a variety of accounting software options depending on their specific needs and preferences. Some popular choices among might include:

  1. Wave: due to its free accounting features and user-friendly interface, which is particularly helpful for those just starting their business journey.
  2. FreshBooks: service-based businesses often prefer FreshBooks for its intuitive interface and strong invoicing features, making it easier to manage their finances while balancing family life.
  3. QuickBooks Online: for complex accounting needs or those who require extensive integrations often choose QuickBooks Online for its comprehensive features and scalability.

Business owning women can find further information and advice on accounting software and other business-related topics by joining communities like Mums &Co. By registering at https://www.mumsandco.com.au/, mumpreneurs can connect with other women in business, share experiences, and access valuable resources to help them succeed in their entrepreneurial endeavours. These communities provide a supportive environment where women can learn from one another and find guidance on various aspects of running a business while juggling the responsibilities of motherhood.

Disclaimer
We have used reasonable endeavours to ensure that the information contained on our website is accurate and up-to-date at the time of publication. However, we do not warrant the accuracy or completeness of any information contained on or linked to our website.All information shared on the Mums & Co website is for informational purposes only and is not intended to constitute financial, investment, legal, tax, accounting or other professional advice
. We recommend that you seek advice from a professional regarding you own specific circumstances.
Tags
No items found.