Accounting software can help you manage your money more easily if you’re self-employed; however, how can you choose the finest accounting software for your company?

The government has reduced the demand on sole traders to digitize their documents. Self-assessment taxpayers were expected to utilize Making Tax Digital for income tax in April 2024. The stepwise strategy will be implemented starting in April 2026.

However, there are numerous advantages to utilizing accounting software for small businesses, and keeping paper records will soon become insufficient to meet tax regulations.

Accounting is a method for measuring, processing, and sharing financial data. It can be used both individually and professionally, with business accounting being an essential component of running a small business.

Accounting is crucial to businesses because the data it gives enables you to make better business decisions. Accounting, often known as bookkeeping, organizes your critical business information in reports, allowing you to easily understand where your company excels and where it could improve.

What is Accounting Software?

This sort of software is intended to make it easier for you to manage your company’s finances, including bookkeeping, invoicing, purchase orders, statements of account, inventory, and payroll. The solution you choose will normally contain reporting tools, allowing you to track your cash flow and profit and loss statements, for example. Finally, it facilitates small business bookkeeping.

The sheer number of programs and providers available might make it difficult to compare corporate accounting software, let alone select a package that meets your requirements. But we’ve looked at some of the best accounting software for small businesses.

Modern accounting packages are typically cloud-based, so they should function on both Macs and PCs. The majority of these applications are also accessible via mobile devices.

Many of the paid subscription services listed below include a free trial (typically one month) when you initially join up, allowing you to determine if it meets your needs. However, if you decide to purchase, keep in mind that the prices displayed frequently do not include VAT.

Best Accounting Software Solutions

QuickBooks Online

• $35 per month for the Simple Start plan.
• $65 per month for the Essentials plan.
• $99 per month for the Plus plan.
• $235 per month for the Advanced plan.

QuickBooks Online is an industry leader in accounting due to its extensive feature set and scalability. In addition to essential accounting functions, it includes powerful reporting and transaction monitoring tools, invoicing capabilities, inventory management features, and mobile app capability.

Entrepreneurs looking to assess success in various aspects of their organization will appreciate QuickBooks’ granular transaction tracking options, which allow you to organize transactions by department or location, among other categories. Reporting capabilities improve with each plan, although even the cheapest Simple Start plan contains over 50 reports.

Xero

• $15 per month for the Early plan.
• $42 per month for the Growing plan.
• $78 per month for the Established plan.

Xero is another dependable product for regular accounting functions. It also has outstanding reporting features, a powerful mobile app, and a customizable dashboard that allows users to rearrange or hide panels based on their preferences.

Read Also: The Ultimate Guide to Choosing the Right CRM Software

Xero supports an unlimited number of users on a single account at each plan level, which is a useful feature in cases when several individuals require access to the system. You can also assign them different permission levels: For example, one person may be limited to creating invoice drafts and submitting time entries, whilst another may be able to view reports but not alter transactions.

Competitors’ plans limit how many users you can add, or they charge an additional monthly fee for each user, which can add up quickly. Xero offers a large number of integrations, too.

Zoho Books

• $0 per month for the Free plan.
• $20 per month for the Standard plan.
• $50 per month for the Professional plan.
• $70 per month for the Premium plan.
• $150 per month for the Elite plan.
• $275 per month for the Ultimate plan.

Unlike other competitors, Zoho Books’ plans have no limit on billable clients, and even the free plan allows you to send up to 1,000 invoices each year. Additionally, the free option includes a customer interface, automatic payment reminders, mileage tracking, and the opportunity to schedule reports. Higher-tier plans enable customers to automate procedures, track project profitability, and gain access to comprehensive inventory and analytics capabilities.

The software’s mobile-first features, such as the ability to send invoices via iMessage or add widgets to your phone’s home screen for easy access to timers and late invoices, help it stand out. There is also an Apple Watch app that allows you to log time, issue payment reminders, and view overdue invoices.

FreshBooks

• $19 per month for the Lite plan.
• $33 per month for the Plus plan.
• $60 per month for the Premium plan.
• Custom pricing for the Select plan.

FreshBooks is an excellent accounting solution for freelancers, especially if you have 50 or fewer total clients and may consequently choose between the Lite or Plus package. Your clients can also open their own accounts. This allows them to store and comment on invoices, record payment information, add others to their account, and contribute on projects that they have been invited to view.

Unlike other competitors, FreshBooks plans include unlimited time tracking without additional fees. You can start a timer on the mobile app to log hours spent on a specific project or sync data from programs such as Asana and Trello.

Sage 50 Accounting

• $58.92 per month, for 1 user, for the Pro Accounting plan.
• $101.92 per month, for 1 user, for the Premium Accounting plan.
• $172 per month, for 1 user, for the Quantum Accounting plan.
• Prices increase with each additional user.

Unlike some of its competitors, Sage 50 Accounting provides inventory management and job costing tools across all plan levels. Every package also includes Sage’s own cybersecurity service, which monitors your company’s credit score and alerts you to any data breaches. Sage 50’s advanced inventory, job costing, reporting, and budgeting capabilities may appeal particularly to business owners in the construction or manufacturing industries.

Sage 50 Accounting advertises “cloud-connected capabilities,” which refers to a few features of the software that go beyond typical desktop software functionality: bank feeds, which flow all your business transactions into the software to assist with the reconciliation process; data backups in the cloud to safeguard your important financial information; and remote data access, which allows you, your team, and your accountant to securely access your data from devices other than.

Wave Accounting

• $0 for the Starter plan.
• $16 per month for the Pro plan.

Wave is a simple solution for very small enterprises that want a location to combine bookkeeping data and invoices but do not need to track more than a few transactions each day. The accounting software’s free version allows you to manage income and spending, send unlimited invoices, and set up automatic reminders for late online payments. It also provides access to over a dozen pre-built financial reports, such as a profit and loss statement and balance sheet.

If you don’t want to manually enter transactions into Wave, choose the Pro subscription, which allows you to integrate an unlimited number of bank and credit card accounts for automatic reconciliation. The paid plan offers more competitive online payment processing rates, too (starting at 2.9% per transaction vs. the free plan’s 2.9% + $0.60 per transaction).

QuickBooks Enterprise

• $1,481 per year for the Silver plan.
• $1,922 per year for the Gold plan.
• $2,363 per year for the Platinum plan.
• $4,668 per year for the Diamond plan.

In QuickBooks Enterprise, business owners can build up volume discounts and unique pricing rules based on sales rep, item category, or client in the Platinum plan. The same initiatives expedite the inventory count process by allowing firms to use mobile devices as barcode scanners. Unlike other competitors who only manage single inventory products, QuickBooks Enterprise allows you to track inventory parts and assemblies. You can also keep track of the cost of products sold and make inventory adjustments for loss or shrinkage.

It is feasible to get cloud access so that your staff may communicate more effectively and access the software and its data from anywhere, but the cost quickly adds up, with an extra monthly charge per person.

Striven

• $35 per month per user for the Standard plan.
• $70 per month per user for the Enterprise plan.

Striven’s integrated accounting software provides access to not just your general ledger and basic reports such as profit and loss, but also tools for accounts receivable and payable, billing, order management, and more. Striven’s accounting software will also assist you keep your firm tax-compliant by automating tax computations and providing access to numerous tax data.

Striven has developed accounting solutions for a dozen sectors. Its retail solution, for example, provides CRM, inventory management, and marketing functions that are integrated with the accounting platform. However, their nonprofit solution offers capabilities for document management, event scheduling, and even a donation portal. And because it’s cloud-based, you’ll be able to view your real-time accounting and other business data from any location.

How to Choose the Best Accounting Software

Ideally, your accounting software would streamline your daily tasks through automation. Here are some important considerations to consider while researching and selecting the finest accounting software for your small business.

• Accessibility: Cloud-based software enables access through any device with an internet connection. This generally allows for easier collaboration with accountants and seamless integration with other business software. Desktop-based software, however, can only be accessed from a single computer.
• Scalability: Take a look at products’ plan offerings, including how many employees and users the software can support, to make sure you can upgrade to a more robust version of the software as your business grows. If you anticipate rapid or high growth, consider accounting software for medium-sized businesses. 
• Your budget: Determine how much your business can afford to spend monthly on accounting software in conjunction with other recurring costs, like utilities, rent and additional software subscriptions for a POS system or payroll, for example.
• Ease of use: Accounting software that isn’t intuitive and user-friendly can take up an unnecessary amount of your time or discourage you from using it as often as you should to keep your finances in order. Test out free trials of accounting software, request a demo and watch tutorial videos to get a feel for navigating the software. 
• Integrations: Think about the other types of software you already use or plan to use, and check to see if direct integrations are available between those products and the accounting software you’re considering. If not, you may need to pay for an indirect integration or manually transfer data from one product to another. 
• Customer support: Think about what time of the day you’re most likely to reach out for assistance and how you’d like to communicate with customer service representatives. Free accounting software options typically offer less robust customer support solutions than paid products do. 
• Sharing with your accountant: If you’re working with an outside accountant, take note of how easy (or not) a product makes it for you to share your financial details and reports with your accountant. Many popular accounting software products allow you to easily share access, but some require upgrades to costlier plans for this access and some products only enable you to export data to be sent to your accountant.

Choosing an accounting solution is difficult. The best option for you is determined by your business needs. You want the product to provide room for your company to expand, but you don’t want to spend a lot of money on features you may never use. Most of the accounting services we tested had numerous editions, allowing you to begin with a basic version and progress to a more powerful edition that looks and functions identically.