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Best Accounting Software for Small Businesses of February 2023

Take into account your business’s size, budget, whether you’re self-employed and which features you care about most.
By Rick VanderKnyff, Hillary Crawford
Last updated on January 30, 2023
Edited byChristine Aebischer

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Accounting software helps entrepreneurs keep track of how money moves into and out of their business, and provides a detailed overview of the business’s financial health. The best accounting software for small businesses should be easy to use, include strong reporting and invoicing capabilities and integrate with your payroll software and/or point-of-sale system at the very least. Also consider cost, ease of sharing with accountants, customer support and scalability.
Here are NerdWallet’s picks for the best small-business accounting software and why we like them, plus tips on how to choose the right software for your business’s specific needs.

Our Nerdy picks for

Overall accounting software

QuickBooks Online

Unlimited users

Xero

Zoho users

Zoho Books

Freelancers

FreshBooks

Free option

Wave Accounting

Budget accounting software

Sage Accounting

Best Accounting Software for Small Businesses

Product
Best for
Starting at
Promotion
Learn more

QuickBooks Online

Shop now

on QuickBooks Online's secure website

5.0/5

Best for Overall accounting software

$30/month

Additional pricing tiers (per month): $55, $85, $200.

50% off

for first three months or free 30-day trial.

Shop now

on QuickBooks Online's secure website

Xero

Shop now

on Xero's secure website

4.5/5

Best for Unlimited users

$13/month

Additional pricing tiers (per month): $37, $70.

30-day free trial

Shop now

on Xero's secure website

Zoho Books

4.0/5

Best for Zoho users

$0

Additional pricing tiers (per month): $20, $50, $70, $150, $275.

14-day free trial

of the Premium plan.

FreshBooks

Shop now

on FreshBooks' secure website

3.5/5

Best for Freelancers

$15/month

Additional pricing tiers (per month): $30, $55, custom.

30-day free trial

or monthly discount (terms vary).

Shop now

on FreshBooks' secure website

Wave Accounting

3.5/5

Best for Free option

$0

Free (Wave makes money via paid money management products).

N/A

Sage Accounting

3.5/5

Best for Budget accounting software

$10/month

Additional pricing tiers (per month): $25.

70% off

of the Sage Accounting plan for six months.

QuickBooks Enterprise

4.0/5

Best for Desktop accounting software

$1,410/year

Additional pricing tiers (per year): $1,830; $2,250; $4,400. Adding users or cloud access costs extra.

30-day free trial

Our pick for

Overall accounting software

QuickBooks Online

5.0
NerdWallet rating 
Shop now

on QuickBooks Online's secure website

Starting at

$30/month

Additional pricing tiers (per month): $55, $85, $200.

Promotion

50% off

for first three months or free 30-day trial.

Our pick for

Unlimited users

Xero

4.5
NerdWallet rating 
Shop now

on Xero's secure website

Starting at

$13/month

Additional pricing tiers (per month): $37, $70.

Promotion

30-day free trial

Our pick for

Zoho users

Zoho Books

4.0
NerdWallet rating 
Starting at

$0

Additional pricing tiers (per month): $20, $50, $70, $150, $275.

Promotion

14-day free trial

of the Premium plan.

Our pick for

Freelancers

FreshBooks

3.5
NerdWallet rating 
Shop now

on FreshBooks' secure website

Starting at

$15/month

Additional pricing tiers (per month): $30, $55, custom.

Promotion

30-day free trial

or monthly discount (terms vary).

Our pick for

Free option

Wave Accounting

3.5
NerdWallet rating 
Starting at

$0

Free (Wave makes money via paid money management products).

Promotion

N/A

Our pick for

Budget accounting software

Sage Accounting

3.5
NerdWallet rating 
Starting at

$10/month

Additional pricing tiers (per month): $25.

Promotion

70% off

of the Sage Accounting plan for six months.

Our pick for

Desktop accounting software

QuickBooks Enterprise

4.0
NerdWallet rating 
Starting at

$1,410/year

Additional pricing tiers (per year): $1,830; $2,250; $4,400. Adding users or cloud access costs extra.

Promotion

30-day free trial

How does accounting software work?

Accounting software helps small-business owners keep track of where their business’s money is coming from and going to. It also ensures that the business’s financial data is accurate and up to date, which is especially important come tax season. Just as importantly, software makes accounting tasks much easier to understand. Without it, you’d have to debit one account and credit another for every transaction — many products will do this double-entry accounting behind the scenes for you.
Most accounting software goes beyond basic bookkeeping tasks (like recording transactions and reconciling accounts) with additional built-in modules for invoicing, bill pay, inventory management and reporting, among other functions. The more your accounting software becomes a one-stop shop for these financial chores, the fewer integrations you need to consider.

How to choose accounting software

Think about accessibility
Most accounting products today are cloud-based and can be accessed through any device with an internet connection. This generally allows for easier collaboration with accountants and seamless integration with other business software. Some accounting products are still desktop-run and can only be accessed from a single computer.
Ask your accountant what accounting software they use
If you’re working with an outside bookkeeper or accountant, find out which accounting software they work with. QuickBooks is almost ubiquitous, but other companies, such as Xero, are making inroads as well.
Take scalability into account
You want accounting software that can grow with your business. If you're planning to scale, look for options that come with enough users and can be upgraded to serve a larger organization with more complicated financials.
Make sure subscription costs fit your budget
Subscription fees for most accounting software start at under $20, but add-ons could increase the price. See NerdWallet’s picks for best free accounting products if you run a micro business or are self-employed and want to keep costs down.
Decide which features are most important to your business
If inventory management is a priority, look for a system that comes with useful tracking features or integrates with your point-of-sale system. Solid invoicing features and reporting are typically must-haves. Some businesses, like nonprofits and construction companies, might also require industry-specific features or reports. If you're not sure whether a product fits your business's needs, try out the free trial offered by most providers.

What accounting software features do you need?

Reporting
Most businesses will need accounting software with basic report templates — think a profit and loss statement and balance sheet, along with reports on aged receivables and sales tax. Some business owners might also want to run reports on customer balance, accounts payable aging, vendor balance and sales by product or service. Consider the types of reports your company needs, as well as customization options and the ability to filter by date and tag.
Invoicing
Invoicing features are key, especially for service-based businesses. You should be able to customize the invoice with your logo, easily turn estimates into invoices, add terms and due dates, and accept online payments. Some products’ plans cap the number of clients you can invoice, which could force you into a higher pricing tier. If you work with dozens of clients and send a high volume of invoices each month, this is important to consider. Another invoicing feature to look for is automatic payment reminders to save you the admin of tracking down unpaid invoices. While it might not be as convenient as having invoicing features built into your accounting system, third-party invoicing software is also available.
Mobile app
Accounting apps help you access your financial data quickly and easily, even if you’re away from a computer. A capable app can also allow you to invoice a customer from anywhere. If you drive to different project sites, built-in mileage tracking can help you claim deductions come tax season. Other conveniences include being able to view reports and photograph receipts so they’re automatically turned into expenses.
Extras
Basics aside, some businesses might benefit from inventory management features, the ability to manage multiple businesses from one account, industry-specific reports, project tracking and transaction tracking tags.

What is the best accounting software for small business?

QuickBooks Online is NerdWallet’s pick for best overall accounting software, but that doesn’t mean it’s the right fit for every business. Wave might be sufficient for very small businesses, and people who already use Zoho business apps might find that Zoho Books is the most convenient option. Xero and Sage Accounting are both good deals for businesses that need to grant software access to more than a handful of users. While cloud-based software is usually more user-friendly than desktop software, QuickBooks Enterprise is an option for business owners who don’t want their data in the cloud. Consider which features matter most to you, and which user interfaces are easiest for you to navigate.

Is QuickBooks for small businesses worth it?

QuickBooks Online scores especially high for its key feature set — including reporting, invoicing and inventory management — as well as its advanced features like project tracking and transaction tracking. Its popularity makes it easy to share with accountants, and with four plan offerings, small businesses have room to scale up. Other QuickBooks products include QuickBooks Desktop options and integrated payroll solutions.
However, QuickBooks prices can be steep. Freelancers and contractors are good candidates for products, like FreshBooks and Wave, that cost less per month. Other companies, like Zoho Books, offer free accounting software plans, too.

When to switch accounting software

Ideally, your accounting software will make your day-to-day routine easier through automation. When it regularly causes headaches or requires plan upgrades that break your budget, it might be time to consider switching to a new product. Alternatively, if you’re overwhelmed by the workload as your business grows, you could try hiring an online bookkeeping service to take some of those tasks off your plate.
Last updated on January 30, 2023

Methodology

NerdWallet’s accounting software ratings favor products that are easy to use, have a robust feature set and can grow with your business. Ratings are based on weighted averages of scores in several categories, including scope of features and integrations, customer support and cost, among others. Learn more about how we rate small-business accounting software.
These ratings are meant to provide clarity in the decision-making process, but what’s best for your business will depend on its size, growth trajectory and which features you need most. Simplicity doesn't always translate into ease of use. Less scalable products are typically simpler, but diminished functionality can cause headaches down the road for growing businesses. We encourage you to research and compare multiple accounting software products before choosing one.
NerdWallet does not receive compensation for any reviews. Read our editorial guidelines.