BEST OF

Best Accounting Software for Small Businesses of December 2021

Double-entry accounting is a must. Also consider reporting capabilities, scalability and ease of use.

Rick VanderKnyffNov 18, 2021

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The best accounting software for small businesses makes it easy to keep detailed, accurate books. Specifically, these programs use double-entry accounting, generate useful reports, provide live support, integrate with business apps you already use and can scale with your business. If your company is planning to hire expert help, you'll also want to get a program that's widely used by accountants and bookkeepers.

Here are NerdWallet’s picks for the best accounting software for small businesses.

Our pick for

Overall accounting software

QuickBooks
Shop now

on QuickBooks's website

QuickBooks Online

QuickBooks

Starting at

$25/mo

Additional pricing tiers (per month): $50, $80, $180.

Promotion

50% off

for first three months or free 30-day trial.

Shop now

on QuickBooks's website


Why we like it

QuickBooks is an industry leader, used by millions of small businesses worldwide. In the accounting field, that can mean something: If you’re working with an outside bookkeeper, QuickBooks is probably their weapon of choice.

Pros

  • Full suite of reports, including profit and loss statements and balance sheets.

  • Easy sharing with outside accountants or bookkeepers.

  • Double-entry accounting

  • Access across devices, including mobile and browser.

  • Live full-service bookkeeping support available (pricing is based on your company’s average monthly expenses).

Cons

  • Can take a little effort to learn.

Read Full Review

Our pick for

Mobile-friendly option

FreshBooks
Shop now

on FreshBooks's website

FreshBooks Accounting

FreshBooks

Starting at

$15/mo

Additional pricing tiers (per month): $25, $50, custom.

Promotion

60% off

60% off for first six months

Shop now

on FreshBooks's website


Why we like it

FreshBooks' mobile app is intuitive and feature-rich, making it a great choice for entrepreneurs who spend more time on the phone than at a desk.

Pros

  • Ease of use.

  • Double-entry accounting.

  • Billing includes unlimited estimates and invoices.

  • Option to add advanced payment processing.

  • Phone and online support.

Cons

  • Each pricing tier includes one user; each additional user adds $10 per month.

  • Lite plan doesn’t include basic features like bank reconciliation or accountant access.

Read Full Review

Our pick for

Unlimited users

Xero

Xero

Starting at

$12/mo

Additional pricing tiers (per month): $34, $65.

Promotion

N/A

Why we like it

Xero stands out by allowing unlimited users at every subscription tier, a potentially valuable feature for businesses where several users may need at least limited access to the system to run reports or analyze performance.

Pros

  • Unlimited users in all pricing plans.

  • Inventory management.

  • Full reporting included with all subscription levels.

  • Automated bill and receipt capture.

  • Double-entry accounting.

Cons

  • No live phone support.

  • Limits on bills and invoices with the entry-level plan (five and 20 monthly, respectively).

Read Full Review

Our pick for

Low-cost, high-value

Zoho Books

Zoho

Starting at

$0/mo

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

Promotion

N/A

Why we like it

Zoho Books packs an impressive collection of features and reporting capabilities for an affordable price.

Pros

  • Ease of use.

  • Can integrate with a family of other Zoho products and several third-party apps.

  • Ability to automate workflows.

  • Phone and email support.

  • Double-entry accounting.

  • Specialized versions for nonprofits and startups.

Cons

  • Third-party app integrations are more limited than other choices.

  • Even the top-tier plan is capped at 10 users (additional seats can be added at $3 each per month when billed monthly).

Read Full Review

Our pick for

Free option

Wave Accounting

Wave

Starting at

$0

Free (Wave makes money via payment processing).

Promotion

N/A

Why we like it

Unlike some “freemium” software products, Wave doesn’t put out a bare-bones free product as bait, then load it down with costly upgrades. Even the free version has things like the ability to add unlimited collaborators, along with unlimited bank and credit card connections.

Pros

  • Free.

  • Ease of use.

  • Unlimited income and expense tracking.

  • Unlimited partners, collaborators or accountants.

  • Double-entry accounting.

Cons

  • Not suitable for larger or fast-growing companies.

Read Full Review

Summary of Best Accounting Software for Small Businesses of December 2021

Our picks for best accounting software

Our pick for: overall accounting software

Price:

  • Simple Start: $25 per month.

  • Essentials: $50 per month.

  • Plus: $80 per month.

  • Advanced: $180 per month.

QuickBooks Online is cloud-based and well-suited to smaller businesses, although it can scale up as your company does, from the Simple Start package (one user, two accounting firms) up to Advanced (up to 25 users and three accounting firms, plus advanced features). The program integrates with hundreds of apps, in addition to connecting easily with other products in the Intuit family handling payroll and payment processing. There's also a separate version for self-employed individuals (starting at $15 per month with 50% off in the first three months).

Our pick for: mobile-friendly option

Price:

  • Lite: $15 per month.

  • Plus: $25 per month.

  • Premium: $50 per month.

  • Select: custom pricing.

Aside from general accounting functions, FreshBooks’ mobile app allows you to respond to clients' questions and get notified when they view or pay invoices or when invoices are overdue.

And with its relatively recent addition of double-entry accounting, it's also now a candidate for a larger spectrum of companies, getting generally strong industry reviews for its intuitive, easy-to-use interface. Entirely cloud-based, it covers the basics and includes some attractive automated features and reports. If you need to have more than one person access the system, be sure you factor that into the price.

Our pick for: unlimited users

Price:

  • Early: $12 per month.

  • Growing: $34 per month.

  • Established: $65 per month.

In addition to allowing unlimited users, Xero lets you set up different permissions for each user so employees only have access to what's relevant to their job. By contrast, QuickBooks Online Advanced allows just 25 users and three accounting firms.

The New Zealand-based company, which has accounting software that is a market leader in some parts of the world, is working to make inroads in the U.S. too. It offers a full certification program for accountants (like QuickBooks does), with more than 100,000 accountants and bookkeepers using Xero — which makes it easier for Xero customers to find outside help.

Our pick for: low-cost, high-value

Price:

  • Free: $0 per month.

  • Standard: $20 per month.

  • Professional: $50 per month.

  • Premium: $70 per month.

Zoho’s interface is easy to learn and use, and the option to automate workflows — for example, to send an email alert if an invoice exceeds a certain amount, or to apply a discount or late fee in certain cases — makes it stand out as an attractive choice. (You can create five automated workflows under the basic plan and up to 10 workflow rules in the Professional plan and up.)

Zoho is perhaps best-known for its customer relationship management, or CRM, and productivity apps, which integrate well with its accounting software. It's possible to create contacts on Zoho Books based on new leads in Zoho CRM, for instance.

Our pick for: free option

Price: Free.

In addition to its accounting functions, Wave has a separate, free invoicing product that adds unlimited invoices and automated invoice reminders. The company, which was purchased by H&R Block in 2019, makes money through payment processing, a service you can tack on (starting at 2.9% plus 30 cents per transaction). It also offers a payroll add-on that starts at $20 per month ($35 in tax service states).

How to choose accounting software for your small business

Most accounting products today are cloud-based and can be accessed through any device with an internet connection, in either a browser tab or a mobile app. This generally allows for easier collaboration with accountants and seamless integrations with other business software. Some accounting products are still desktop-run and can only be accessed from a certain computer. If accessing your accounting data from anywhere is a priority, look for a cloud-based option.

If you’re working with an outside bookkeeper or accountant, one way to start is to find out which accounting software they work with. QuickBooks is almost ubiquitous, but other companies, such as Xero, are making inroads as well.

You want accounting software that can grow with your business. If you're planning to scale, look for options that come with comprehensive reporting capabilities and can be upgraded to serve a larger organization with more complicated financials.

If inventory management is a priority, look for a system that comes with useful tracking features or integrates with your point-of-sale system. If you're doing business is multiple countries, look for a product that can handle multiple currencies. If you're not sure whether a product fits your business's needs, try out the free trial offered by most providers.

When making the decision on which software to try, price is unlikely to be the deciding factor — but it's important to know what costs to expect and which services are included in the price. Subscription fees for most accounting software start at under $20, but add-ons could increase the price.

Last updated on November 18, 2021

To recap our selections...

NerdWallet's Best Accounting Software for Small Businesses of December 2021