Are you still doing your small-business bookkeeping and accounting manually via receipts and Excel spreadsheets? If so, it’s time for a change.
Bookkeeping and accounting software automatically tracks and categorizes every dollar you spend and earn, providing greater insight into your business’s finances. Additional features may also include tax preparation and accounting services, inventory management, invoicing and payments, and payroll support. These tools can save valuable time and money.
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Best bookkeeping features
Founded in 2012, Bench provides a bookkeeping service that organizes the financials of your small business. Its team helps create financial records, such as a monthly profit-and-loss statement, a balance sheet and expense categorization.
During tax season, Bench provides a year-end tax package and can connect directly with your accountant, according to Jen Hazell, a communications coordinator at Bench.
Businesses that stand to benefit the most from Bench are service-based ones, such as e-commerce mom-and-pop shops, health and wellness professionals, contractors, freelancers and consultants that have typical annual revenues ranging from $500,000 to $800,000, Hazell says.
Bookly’s online bookkeeping service provides a dedicated accounting team to handle your bookkeeping and provides monthly financial reports in real time for small businesses.
Once you sign up and connect your bank accounts, credit cards and third-party integrations (such as PayPal or Square), the software automatically displays and categorizes your transactions in real time.
Depending on the plan you buy, Bookly provides:
- Monthly reporting with income statements and balance sheets
- Business and personal tax preparation by a certified public accountant
- Year-round tax consulting
- Audit support
- Mileage tracking
- Ability to create professional invoices
- Third-party integration with business software
- Online payroll
Bookly’s typical customer has been in business up to 10 years and has $250,000 in annual revenue, says Zach Olson, the founder and chief executive. The company — whose typical customer has up to 15 employees — serves various industries, including services (landscapers, groomers), professionals (doctors, attorneys), retail, e-commerce and tech startups, according to Olson.
Best for tax services and live support
InDinero combines its web-based accounting and bookkeeping software with live support. Businesses are teamed up with bookkeepers, accountants and CPAs to help prepare financial reports required by investors, lenders and other financial stakeholders, says Stephanie Killgore, a partnership marketing specialist at inDinero.
These experts will understand the nature of each business, so they can also answer technical questions and provide deeper insights into a business’s finances, identify opportunities for growth and anticipate upcoming compliance responsibilities, Killgore says.
It works with startups and small businesses including early-stage companies that need simple accounting; small and medium-sized businesses that want robust accounting; and growing companies that require accrual accounts, inventory recognition and advanced financial reports, Killgore says.
Best low-cost accounting software
ZipBooks provides online accounting software and online invoicing. After you connect your bank accounts, ZipBooks will categorize your expenses and keep you up-to-date with your financials.
It’s particularly useful for businesses that deal with customer invoices. The company’s online invoicing feature lets you create, send and track the status of your invoices. You can email customers to remind them of an unpaid invoice and send late-payment reminders for past-due invoices.
ZipBooks also offers a fee-based bookkeeping service, which helps keep books current, manages payroll taxes, handles employee self-onboarding and looks for tax deductions.
Its typical customer has 10 to 50 employees, says Brad Hanks, vice president of marketing at ZipBooks. The software is cloud-based, so it can be used on any digital device with an internet connection.
Wave is tailored for small and microbusinesses — including freelancers and consultants — that have fewer than 10 employees. It serves a range of industries, and its average customer has three to five employees, says Rob Maurin, the vice president of communications at Wave.
Wave’s accounting software makes it easy to connect your bank and credit card accounts to track income and expenses. The software then automatically generates financial statements, including profit and loss statements, sales tax reports and balance sheets.
Other key features include:
- Ability to create and send professional invoices to clients
- Sales tax reports
- Automatic payment reminders for customers
- Credit card acceptance for invoice payments
- Receipt management and scanning through the Wave iOS and Android apps
- Connecting with third-party apps PayPal (payments), Shoeboxed (receipt organization) and Etsy
Billy offers online accounting software and an app for iOS and Android that works best for freelancers and service-based small businesses, given its focus on invoicing and accounts receivables management. The software aims to simplify daily accounting tasks, such as invoicing clients and tracking expenses, says Evan Kaeding, the vice president of business development at Billy.
The largest portion of its market is in Denmark (where it was founded), and the company expanded to the United States in 2016.
Its invoicing features and in-app live support make the software best suited for service-based sole proprietors and microbusinesses (such as accountants, mechanics and consultants), Kaeding says. Setup is fast for new businesses; the software can be installed in about two minutes. But it can take up to an hour for existing businesses that need advanced configuration, he says. The company provides live chat and email support during business hours on weekdays.
Best all-around software
QuickBooks is one of the most popular accounting software platforms: 43% of businesses reported using the desktop version of the software, while 28% used its online software, according to a 2017 survey of 5,000 small and medium-size businesses surveyed by Viewpost, a business-to-business (B2B) payments company.
QuickBooks’ online accounting software has features that appeal to most types of businesses, from independent contractors to small and medium-sized businesses to nonprofit organizations. Its cloud-based software enables managing the business from the office, home or the road.
Key features of QuickBooks include:
- Ability to connect bank and credit card accounts to organize and manage bills
- Software to create invoices and sales receipts
- Customized profit and loss statements and balance sheets
- Inventory tracking
- Ability to share your records online with your accountant
- Payroll features for businesses with employees (for an extra cost)
FreshBooks is a good fit for businesses of most sizes that deal with invoices, from freelancers and sole proprietors to larger corporations.
Key features of Freshbooks include:
- Creating custom invoices
- Expense tracking and receipt tracking software
- Time tracking software to see the time spent by you or your employees on a project
- Ability to accept credit card payments online
- Financial reports including profit and loss statements
- A mobile app
Freshbooks also integrates with other small-business software apps, including Gusto (payroll and benefits) and Shopify (online store).
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Updated April 10, 2018