Small Business Guide to Accounting Software

Small Business Accounting Software

There are a number of accounting software packages on the market that can make the process for small businesses less of a headache. But selecting the right one for your business can seem tricky with so many options to choose from.

This short guide to accounting software for small businesses will give you an overview of what to look out for, looking at the benefits of using accounting software, general factors to consider, plus specific features for different types of business. It will conclude with a short list of companies to check out that offer accounting software.

Benefits of accounting software for your small business

In short, accounting software can make the often burdensome process of accounting much more straightforward for your business as well as reduce your associated costs. Accounting software can be used for invoicing, tracking the income and expenditures of your business, creating reports and more. Used properly, it can help you keep track of company finances and make business planning much easier.

But it’s not just a case of going out and purchasing the first software product you see, or even the one that’s getting the best reviews. Different products are more suited to different types of business, for example freelancers and sole proprietors have different needs than incorporated businesses with employees on the payroll. Most accountancy software will have the same basic features and functions but all have specific aspects tailored towards different business needs.

General factors to look for in small business accounting software

What precisely you will be looking for in your accounting software package will depend on both your business needs and your own personal preferences. It’s handy to make a short list of factors that are most important to you and do a comparison on a range of products to help you determine which is the most suitable. Some factors you may want to consider include:

  • Affordability – how much does the product cost and what is its value in relation? Is a discount plan or a free trial period offered?
  • User-friendliness – how easy is it to use and how much time will you have to spend getting to grips with the software? This may be particularly important if your accounting or tech skills are fairly basic.
  • Time-saving features – these could include things such as automated entries, invoicing processes, reports and reconciliations that will make your time spent more efficient.
  • Advanced features – you might be looking for something that goes beyond the basics and offers features such as data syncing or in-depth financial reports.
  • Mobile features – can the software be accessed and used on your mobile phone?
  • Customer support – what is the reputation of the software company like when it comes to resolving problems that may arise?
  • Compatibility and integration with other systems and software – how well does the software link in with other popular apps, for example PayPal and Stripe?
  • Security – is there data encryption or payment certifications?
  • Limitations – is there a limit to the number of customers or service transactions?
  • Flexibility – is the software cloud-based, which means that upgrades will be automated?

Specific features to consider

Most accounting software on the market will offer basic accounting features such as:

  • The ability to create and customize invoices
  • General ledger management
  • Payment processing
  • Basic financial reports (e.g. profit and loss reports)
  • Expense tracking
  • Bank reconciliation
  • The ability to easily manage customer contact information

Each different software product will offer its own range of additional features. These features might have been designed with specific types of business in mind, such as companies with sales teams.

Some of the more advanced software features you might want to look out for include:

  • Inventory management – if you stock physical inventory
  • Payroll – if your business employs staff
  • Purchase order creation – if you sell products or services to external suppliers
  • Track billable hours – if you run a business or service that bills by the hour
  • Wider range of reports – e.g. capital statements, forecasts and cash flow reports
  • Quotes and estimates creation – if you bid for jobs
  • Multi-currency support – for businesses dealing in the global market
  • Automatic payment reminders – if your business deals with customers making regular payments or standing orders

Top accounting software products

Quickbooks Online

One of the most popular and well-known accounting software products on the market, Quickbooks is often favored for small and medium-sized businesses. Its online version has a wide range of features, is generally considered easy to use, and has a simple mobile app. There are three pricing plans, ranging from $10.40 to $24 a month, with a 30-day free trial.


Lauded for its user-friendliness and extensive customer support, FreshBooks is another strong option for small businesses as well as freelancers. The software is cloud-based, meaning that upgrades are automatic. It’s often recommended for those wanting to manage accounts via their phone. There’s a 30-day free trial with monthly plans from $9.95.


Another cloud-based software often suitable for small and medium-sized businesses. Xero is renowned for its compatibility with Mac systems. It has an attractive interface and many commonly needed features. Offers three pricing plans, from $9 per month, plus a free trial.


A popular choice for new start-ups and very small businesses as the basic software package is free, if you don’t mind putting up with ads. It has most of the basics, although you may need to upgrade pretty quickly if your business grows. There are paid plans starting at $19 a month.

Zoho Books

Zoho has extensive set basic accounting tools which makes it a popular choice for micro-businesses and freelancers. Often called easy to use with good customer support. Three pricing plans, ranging from $7 to $27 per month, with a 14-day free trial offer.

Sage One

Slightly pricier option, but one with more advanced options for larger or more complex businesses. The range of features makes it more favored by service-based businesses. Two pricing plans, at $14 and $30 per month, with a 30-day free trial offer.