The Best Accounting Software for Small Businesses in 2023

Accounting software is an invaluable tool for small business owners in 2023. With the right program, you can simplify bookkeeping, automate tasks, track finances, gain insights, and ultimately make smarter business decisions. But with so many options on the market, how do you determine the best accounting software for your small business?

This comprehensive guide examines the top accounting software programs for small businesses today. We'll cover features, pros and cons, pricing, and ideal users for each solution. Read on for an in-depth look at the leading accounting software of 2023 to find the perfect fit for managing your small business finances.

Why Small Businesses Need Accounting Software

Before diving into the top programs, let's discuss why small business accounting software is so important. As a small business owner, you juggle countless responsibilities. Between managing inventory, tracking sales, paying employees, and more, things can easily slip through the cracks.

Accounting software helps by automating routine finance tasks. This saves you time and reduces human error. With these programs, you can:

• Generate invoices and track payments
• Reconcile bank and credit card accounts
• Manage payables and receivables
• Track income and expenses
• Create financial statements
• Manage payroll
• Forecast and budget

In short, accounting software gives you control over your business's financial health. The reporting provides real-time insights into profitability and cash flow. This helps you identify issues before they become major problems.

With that said, let's look at the 10 best accounting software options for small businesses today.

NetSuite Financial Management

NetSuite provides a robust all-in-one business management system designed for growing small to mid-sized businesses. The cloud-based solution combines powerful accounting capabilities with other tools like inventory management, order management, CRM, and ecommerce.

Features

Key features of NetSuite ERP include:

• Accounting – Automate processes like invoicing, expense reporting, reconciliations, and financial statements.
• Inventory Management – Advanced tools for inventory optimization, warehouse management, and order fulfillment.
• Order Management – Streamline order processes from entry to fulfillment to payment.
• CRM – 360° customer relationship management to improve sales and retention.
• Ecommerce – Built-in webstore creation and management.
• Dashboard – Customizable role-based dashboards with real-time analytics.

Ideal For

NetSuite appeals to mid-size companies and fast-growing small businesses seeking an integrated solution to manage key business processes on a unified cloud platform.

Pricing

NetSuite pricing is customized based on your needs. Monthly fees vary based on number of users and functionality required.

QuickBooks Online

QuickBooks Online is one of the most popular small business accounting programs on the market today. Developed by Intuit, it packs a robust set of features into an easy-to-use cloud-based solution.

Features

Some of the key features of QuickBooks Online include:

• Invoicing - Easily create, customize, and send invoices. Automatically track payments and follow up on late invoices.
• Expense Tracking - Record and categorize expenses. Generate detailed reports for tax time.
• Bank Reconciliation - Sync bank and credit card accounts to automatically match transactions.
• Payroll - Built-in payroll features make running payroll simple.
• Mobile Apps - Manage your books on the go with iOS and Android apps.
• Inventory Management - Track inventory, get alerts when stock is low, and easily reorder.
• Reporting - Generate common financial statements, tax reports, profit and loss reports, and more. Customize reports as needed.

Ideal For

QuickBooks Online works well for small businesses in any industry, from retail shops to professional services firms. It's especially helpful for service businesses that need to track billable hours and expenses for client invoicing. The inventory features also make QuickBooks a great choice for product-based businesses.

Pricing

QuickBooks Online starts at $25/month for their Simple Start plan. Mid-range plans cost $40 to $70/month. The top-tier Advanced plan runs $150/month.

Xero

Xero offers a robust set of accounting features tailored specifically for small businesses. This New Zealand-based company focuses on ease of use, automation, and integration.

Features

Key features of Xero include:

• Invoicing - Create, customize, and automatically send invoices. Get paid faster with online payment links.
• Expenses - Upload receipts and track expenses with automatic categorization.
• Bank Feeds - Automatically import and categorize bank transactions.
• Payroll - Built-in payroll for U.S. businesses includes direct deposit, tax filings, and more.
• 800+ Integrations - Connect with hundreds of business apps for enhanced functionality.
• Multi-Currency - Manage international clients and vendors in different currencies painlessly.
• Dashboard - One centralized dashboard gives you insights into cash flow, account balances, upcoming bills, and more.

Ideal For

Xero is a great choice for small businesses looking for an accounting solution that seamlessly integrates with other business systems. The multi-currency features also appeal to companies doing business internationally.

Pricing

Xero starts at $12/month for their Early plan. The Growing plan costs $22/month, while the Established plan runs $42/month. Volume discounts are available.

Zoho Books

Zoho Books is affordable accounting software with powerful reporting and customization. The cloud-based system helps small businesses streamline operations and gain insights.

Features

Highlights of Zoho Books include:

• Invoicing - Customize, automate, and accept online payments for invoices.
• Expenses & Time Tracking - Record expenses and billable hours for accurate client billing.
• Bank Sync - Connect bank accounts to automatically sync transactions and simplify reconciliation.
• Inventory Management - Manage stock levels and item details from purchase to sale.
• Custom Fields - Add custom fields to capture specialized data for your business.
• Project Management - Track project expenses, billable hours, status, and more.
• 11 Key Reports - Including profit and loss, accounts receivable aging, and detailed sales reports.

Ideal For

Zoho Books works well for small businesses in professional services, agencies, consulting, construction, and retail. The custom fields and project management features cater nicely to service businesses.

Pricing

Zoho Books starts free for one user. The Standard plan costs $9 per month, while the Professional plan runs $29/month.

Sage Accounting

Sage Accounting (formerly Sage 50cloud) provides robust accounting capabilities wrapped in a user-friendly interface. From invoicing to inventory management, Sage Accounting has the features small businesses need.

Features

Some highlights of Sage Accounting include:

• Invoicing - Create, customize, automate, and accept online payments for invoices.
• Bank Feeds - Link bank accounts to automatically download transactions.
• Inventory - Advanced inventory features include warehouse/bin management and serial number tracking.
• Job Costing & Estimating - Track detailed job expenses for accurate billing and quotes.
• Mobile - iOS and Android apps to manage accounts on the go.
• 400+ Reports - Including pre-built financial statements, profit and loss, and sales reports. Highly customizable.

Ideal For

Sage Accounting appeals to manufacturing and distribution firms that require robust inventory management. Service businesses like the job costing features. Integrations extend functionality for ecommerce businesses.

Pricing

Sage Accounting starts at $40/month for their Pro plan. Their Premium plan runs $70/month.

Wave

Wave offers free accounting software for small businesses, sole proprietors, and freelancers. For those just starting out, Wave provides all the essentials without the cost.

Features

Some notable features of Wave include:

• Invoicing - Create, customize, and send professional invoices. Accept credit card payments online.
• Accounting - Track income and expenses. Automate transactions from bank accounts and credit cards.
• Receipts - Upload receipts and track expenses on the go with mobile apps.
• Payroll - Built-in payroll for U.S. and Canada handles payments, taxes, and filings.
• Multi-user - Give accountants and bookkeepers access without compromising security.

Ideal For

Wave's free plan appeals to freelancers, solopreneurs, and newly launched small businesses. It provides essential financial management tools without the cost.

Pricing

The Wave core accounting features are 100% free. Payroll is $35/month base fee + $4 per employee. Premium plans with more functionality start at $20/month.

Freshbooks

Freshbooks provides accounting solutions designed for service-based small businesses. Features cater specifically to freelancers, agencies, consultants, and other client-service firms.

Features

Some of Freshbooks' notable capabilities include:

• Invoicing - Create, customize, schedule, and automate invoice creation and delivery.
• Time Tracking - Easy tools for tracking billable project and task time.
• Expenses - Capture expenses from anywhere and auto-sync to accounting.
• Project Management - Manage project tasks, deadlines, and team member assignments.
• Accounting - Track income and expenses. Reconcile accounts automatically.
• Client Portal - Share invoices, get approvals, and enable online payments from clients.

Ideal For

Freshbooks provides the project management and reporting capabilities service businesses need for accurate client billing. Perfect for freelancers, agencies, consultants, architects, and designers.

Pricing

Freshbooks starts at $15/month for their Lite plan, $25/month for their Plus plan, and $50/month for their Premium plan.

FreeAgent

FreeAgent offers online accounting software specifically designed for freelancers and microbusinesses in the UK. Features cater to the unique needs and challenges these segments face.

Features

Some top features of FreeAgent include:

• Invoicing & Payments - Create, send, and accept invoice payments online.
• Time Tracking - Track time spent on client projects for accurate billing.
• Taxes - Tools to calculate, file, and make quarterly VAT and self assessment tax payments.
• Expense Tracking - Record expenses using mobile apps and generate reports.
• Project Management - Track project information, deadlines, and billable time.
• Banking & Payroll - Automatically sync business bank accounts. Integrated payroll features.

Ideal For

FreeAgent suits the needs of freelancers, contractors, and microbusinesses based in the UK that need accounting, VAT filing, payroll, and banking features in one system.

Pricing

FreeAgent starts free for one user. Paid plans start at £10/month for their Sole Trader package up to £60/month for their 5-Users package.

Sage Business Cloud Accounting

Sage Business Cloud Accounting provides all-in-one accounting, invoicing, cash flow management, and reporting for small businesses. The system combines power with simplicity.

Features

Key features of Sage Business Cloud Accounting include:

• Invoicing – Create, customize, automate, and accept online invoice payments.
• Cash Flow Management – Forecasting tools to better understand and predict cash flow needs.
• Expense Management – Capture receipts and track expenses on mobile.
• Bank Reconciliation – Link bank accounts to automatically match transactions.
• Mobile Apps – Manage finances on the go from any device.
• Dashboard – Real-time insights into cash flow, profits, A/R, A/P, and account balances.

Ideal For

Sage Business Cloud Accounting provides the essential financial management tools that small businesses across industries need to optimize performance.

Pricing

Sage Business Cloud Accounting starts at $10/month for their Starter plan and increases based on the number of connected businesses and user licenses.

ZipBooks

ZipBooks provides free accounting software for startups and very small businesses. The easy-to-use platform has flexible pricing options.

Features

Highlights of ZipBooks' free features include:

• Invoicing - Send, track, and accept online payments for invoices.
• Expense Tracking - Record expenses via mobile app and generate reports.
• Time Tracking - Track employee and contractor billable hours.
• Accounting - Record income/expenses. Link bank accounts to import transactions.
• Mobile - Android and iOS apps for on-the-go access.
• One-Click Reports - Instantly generate P&L, A/R Aging, and Balance Sheet.

Ideal For

ZipBooks suits freelancers, consultants, startups, and brand new small businesses looking for basic accounting features to manage finances without complexity.

Pricing

ZipBooks' core features are free for up to 3 users. The Plus plan starts at $15/month and adds inventory, purchase orders, budgets, and more.

AccountingSuite

AccountingSuite focuses on small business accounting, invoicing, expense management, and financial reporting. Integration with Mailchimp enhances email marketing.

Features

Key capabilities of AccountingSuite include:

• Invoicing – Create, customize, schedule, and automate invoices. Accept online payments.
• Expense Management – Record expenses via mobile, generate reports, and link bank feeds.
• Financial Statements – Easily produce balance sheets, P&L, cash flow, and other reports.
• Mailchimp Integration – Sync contacts and automate email invoices and reminders.
• Project Management – Manage project tasks, time tracking, expenses, and billing.
• Mobile Apps – iOS and Android apps for on-the-go access.

Ideal For

AccountingSuite appeals to small product and service-based businesses seeking straightforward tools to manage finances, invoices, expenses, accounting, and reporting in one place.

Pricing

AccountingSuite starts free for up to 2 users. Unlimited users start at $12/month for core features. Add-ons available.

OneUp

OneUp provides online accounting software specifically tailored for nonprofits and charities. Features cater to the unique needs these organizations face.

Features

Some key features of OneUp include:

• Donor Management – Track donors and link to contribution records.
• Fund Accounting – Manage funds restricted for specific purposes.
• Grant Management – Track grant income and spending against grant budgets.
• Reporting – Financial statements include Statement of Financial Position, Statement of Activities, Statement of Functional Expenses, and more.
• Invoicing – Create and customize invoices to bill for services or events.
• Dashboard – Real-time insights into cash flow, account balances, budgets vs. actuals, and key metrics.

Ideal For

OneUp meets the unique accounting, reporting, fund, and donor management needs of nonprofits and charities.

Pricing

OneUp cores plans start free for one user. Unlimited users start at $39/month for the Plus plan.

Finding the Right Fit

With this overview of the top accounting systems for small businesses, you have a solid starting point for evaluating your options. Keep the following in mind as you determine which solution is the right fit:

Features – Make a list of must-have features based on your business needs and how you operate. Compare that with software capabilities to narrow down choices.

Ease of Use – The system should be intuitive without a steep learning curve. Look for simple interfaces, automation, and built-in guidance.

Industry – Some systems cater better to specific industries or business types. Choose software that aligns with your field.

Business Stage – Early stage businesses may fare better with free or low-cost solutions with basic features. Established small businesses need more robust functionality.

Future Goals – Consider where you want your business to go and choose scalable software that can grow with you.

Finding the right accounting software takes research. Taking advantage of free trials lets you test drive systems hands-on before fully committing. Investing the time upfront will pay off with software that streamlines accounting and provides the financial visibility small businesses need to drive growth.

The Bottom Line

Accounting software delivers invaluable automation and insights for small businesses. While basic financial management apps work initially, growth-focused owners should consider long-term goals. Switching platforms to expand capabilities can cause significant disruption to the business.

Rather than force a difficult systems migration later, consider investing upfront in a robust system like NetSuite ERP. The unified cloud based platform scales seamlessly as your needs evolve. By handling accounting, inventory, orders, CRM, and ecommerce in one solution, NetSuite provides a complete solution without a future ERP upgrade.

Selecting future-proof accounting software minimizes disruption while maximizing success throughout each stage of business growth. Keep the end goal in mind when evaluating options today.