Choosing accounting software is frustrating. With so many options, it's hard to determine which solution actually meets your business's unique needs.
Luckily, I've just reviewed the top 5 accounting tools on the market. Through comprehensive analysis, I've identified the best software for small businesses, enterprises, and personal use.
In this guide, you'll discover the key features, strengths, and limitations of QuickBooks, Xero, FreshBooks, Wave, and Zoho Books. You'll learn which tool works best for different industries, business sizes, and use cases. Most importantly, you'll get actionable recommendations to streamline your finances with the ideal accounting platform.
Introduction to Accounting Software
Accounting software helps businesses track income, expenses, assets and liabilities. It automates routine financial tasks and generates real-time reports to understand financial performance better.
Using accounting software offers several benefits:
What is Accounting Software?
Accounting software records financial transactions, streamlines bookkeeping, produces financial reports, and complies with accounting standards.
Key features of modern accounting software include:
- Invoicing clients and receiving customer payments
- Tracking accounts receivable and accounts payable
- Payroll and tax management
- Financial reporting for profit & loss, balance sheets, and cash flow statements
- Integration with sales tax, payment gateways, eCommerce platforms, and other business applications through APIs
Accounting software helps organize financial data and transactions in one central location. This provides more visibility and control over the business finances.
Benefits of Using Accounting Software
The main benefits of using accounting software for small businesses include:
- Increased productivity: Accounting software automates routine bookkeeping and financial tasks. This saves time on manual data entry and number crunching, boosting efficiency.
- Better financial visibility: Real-time reporting provides greater insight into cash flow, profits, expenses, etc. Business owners can make data-driven decisions faster.
- Scalability: As the business grows, accounting software can scale capabilities to match operational needs without disruption. There is no need to switch platforms later.
- Cost savings: Accounting software reduces the need for hiring full-time accounting staff or external bookkeeping services in the initial stages, lowering costs.
In summary, accounting software delivers improved financial control, productivity, analysis and compliance for SMBs at an affordable price point. Integrating accounting software early provides a scalable platform for managing finances as the business expands.
What accounting software do most accountants use?
Accounting software has evolved tremendously over the past few years, and there are now several specialized options available for accounting professionals. Some of the most commonly used accounting software by accountants include:
Best All-around professional software for accounting firms
FreshBooks, Sage 50cloud, and QuickBooks Enterprise are among the top choices for full-service accounting firms and CPAs. These tools provide robust accounting, invoicing, time tracking, inventory management, and reporting capabilities suited for managing multiple clients.
Key features like double entry bookkeeping, customizable invoices, automated billing, expense tracking, and advanced reporting make these platforms a favorite among accountants.
Cloud-Based Accounting Systems
Xero, QuickBooks Online, and Zoho Books have emerged as leading cloud-based accounting platforms. They provide anytime, anywhere access to real-time financial data and seamlessly integrate with other systems using APIs.
As more accountants adopt remote work policies, web-based programs allow efficient collaboration across locations and devices. Cloud platforms also simplify sharing financial information with clients.
Best of Both Worlds
Solutions like Sage Business Cloud and NetSuite ERP bridge the gap between desktop and cloud. They offer the flexibility of anytime mobile access while providing centralized control of critical financial data.
Robust accounting tools augmented by cloud features give accountants versatility in how they manage workflows across various client requirements.
In summary, most accountants utilize a mix of desktop-based and cloud-hosted programs based on their portfolio of clients, specific industry needs, and work preferences. Leading solutions share key capabilities like multi-entity reporting, custom invoices, and real-time analytics.
Which is the best software to maintain accounts?
There are several accounting software options to consider when looking to efficiently maintain financial records and accounts. Many provide a range of useful features, but the best choice depends largely on the size of your business and specific needs.
For small businesses and startups, Zoho Books stands out as one of the best free accounting platforms available. It offers extensive accounting capabilities such as invoicing, expense tracking, inventory management, and financial reporting. The intuitive interface makes it easy to use for non-accountants. However, it lacks some advanced accounting functions suitable for larger companies.
FreshBooks presents another excellent cloud-based solution that prioritizes user-friendliness. It simplifies accounting processes through automation and streamlined workflows. The software also seamlessly integrates with many business applications. However, it has fewer features than Zoho Books and may not scale effectively as companies grow.
Xero delivers robust accounting functionalities oriented toward established small and medium-sized businesses. It offers tools for payroll, inventory, reporting, and more. The extensive feature set provides in-depth accounting insights but involves a steeper learning curve. It also comes at a higher price point than competitors.
For the self-employed and solopreneurs, Intuit QuickBooks stands as a top choice. It conveniently bundles various financial tools like invoicing, tax preparation, and payments. The range of accounting features specially caters to independent contractors and microbusinesses. However, it lacks some capabilities needed by larger companies.
In summary, Zoho Books presents the best free option, FreshBooks focuses on usability, Xero provides advanced accounting features, while QuickBooks suits self-employed individuals. Consider your business' size, accounting needs and budget when deciding on the best solution. Leveraging the right platform facilitates efficient financial management across all stages of your company's growth.
What is one of the most widely used financial accounting software?
QuickBooks Desktop is widely considered one of the most popular and widely used accounting software solutions for small to mid-sized businesses. With its robust feature set, security, and ability to handle complexity, it is a go-to choice for companies with more diverse accounting needs.
QuickBooks Desktop provides:
- Advanced reporting and analytics tools to gain financial insights
- Inventory management capabilities with the Advanced Inventory add-on
- Multi-user access with customized permission levels
- Integration with other business systems
- Scalability as your business grows
A key advantage of QuickBooks Desktop is its ability to handle more complexity than some entry-level accounting platforms. It provides advanced accounting functionalities like:
- Job costing
- Manufacturing tools
- Audit trail tracking
- Automated budgeting
For small businesses looking to upgrade from basic accounting needs, QuickBooks Desktop offers an attractive mid-point solution before needing to step up to a full enterprise resource planning (ERP) system. Its depth of features still keeps it accessible enough for small business owners to learn and leverage without advanced accounting expertise.
With strong adoption and longevity in the market, QuickBooks Desktop continues its reign as a leading choice for growing small and medium-sized businesses in need of robust accounting software. Its features, scalability, and security make it a go-to option as complexity and business needs expand over time.
What software do corporate accountants use?
Accounting software helps businesses of all sizes manage their financial data and streamline accounting processes. For global enterprises and large corporations, comprehensive enterprise resource planning (ERP) solutions offer advanced accounting functionality alongside other business management tools.
Two of the most widely used ERP platforms among corporate accountants are:
Oracle NetSuite
Oracle NetSuite ERP provides a unified system for financial management, revenue recognition, global consolidations, planning, and analytics. Key features include:
- Multi-book accounting - track multiple sets of books with different accounting standards
- Robust reporting and analysis tools
- Seamless integration with CRM, HCM, supply chain, and other systems
- Customizable workflows and business processes
Microsoft Dynamics 365 Finance
Microsoft Dynamics 365 Finance offers core financials, budgeting, forecasting, and consolidation capabilities for global businesses. Benefits include:
- Power BI integration for financial reporting
- Configurable tax engines and global tax compliance
- Drill-down analytics and audit trails
- Workflow automation for AP, AR, and GL processes
Both NetSuite and Dynamics 365 cater to complex accounting needs of large enterprises. Most corporate accountants rely on such platforms to manage essential accounting operations and provide actionable financial insights to business leaders. The exact choice depends on a company's size, industry, existing infrastructure, and budget.
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Evaluating the Best Accounting Software in India
We delve into the top accounting software choices that cater to the specific financial management needs of Indian businesses, both big and small.
Top Contender for Indian Markets - Tally ERP 9
Tally ERP 9 is widely considered one of the best accounting software options for businesses in India. It offers robust features tailored to handle Indian taxation, invoicing, inventory management, and more.
Some key strengths that make Tally ERP 9 a top choice include:
Localized for India
- Seamlessly handles GST, excise, service tax, TDS and TCS for seamless GST compliance
- Supports state-wise VAT, CST, entry tax and other tax regimes
- Inbuilt data validation, reconciliation and e-filing tools for Indian taxation
Flexible Inventory Management
- Tracks inventory, sales orders, purchase orders and generates reports
- Manages multiple godowns, stock categories and units of measure
- FIFO, standard costing and batch-wise costing methods
Multi-Currency Support
- Handles transactions in multiple currencies for global trade
- Automated daily currency rate updates and currency conversion tools
Analytics and Custom Reporting
- 100+ built-in reports and dashboard views for insights
- Create custom MIS reports, project reports and financial statements
Data Security
- Control user access levels and activity logs for data integrity
- Automated data backups to prevent losses due to hardware failures
Affordable Pricing
- Available in multiple editions to fit business budgets big and small
- Perpetual licensing keeps costs low compared to SaaS models
With its specialized capabilities for Indian taxation, inventory management requirements, as well as data security provisions, Tally ERP 9 is favored by many small, medium and large businesses across India. It strikes an optimal balance between robust accounting capabilities and affordability.
Our Top 5 Picks for Small Business Accounting Software
As a small business owner, finding the right accounting software is crucial for efficiently managing your finances. The software you choose should be easy to use, affordable, and have the necessary features to meet your business needs.
In this section, we review the top 5 accounting software options for small businesses, evaluating them across key criteria to help you select the best solution for your company.
#1 QuickBooks: Desktop Accounting Software for Small Business
QuickBooks Desktop strikes an optimal balance between usability and robust features at a reasonable price point for small businesses. Here's an overview of its standout qualities:
- Intuitive interface: Easy to navigate with a familiar layout similar to Excel spreadsheets. User-friendly even for beginners.
- Built-in payroll features: Supports running payroll in-house with multiple plans available. Integrates with tax payments.
- Robust reporting: Customizable real-time reports on profit and loss, accounts receivable, accounts payable, and more. Exportable to Excel.
- Industry-specific versions: Tailored editions for contractors, manufacturers, nonprofit entities, professional service firms, and retailers.
- Scales with business growth: Can upgrade to more advanced Enterprise version as your company expands.
With strong core accounting capabilities and above average usability, QuickBooks Desktop hits the sweet spot for most small companies just getting started with automated accounting software.
#2 Xero: Best for Cloud Integration
Xero makes digital accounting simple and seamless by focusing on ease of use, beautiful design, and integrations. Key upsides:
- User-friendly interface: Clean, simple dashboard. Easy to navigate charts, graphs, and reports.
- Robust integrations: Connects to 700+ common business apps including POS systems, ecommerce platforms, payment processors, and more.
- Automates everyday tasks: Features like auto-reconciliation, repeating invoices and bill payments saves time.
- Detailed custom reporting: Build customized reports filtered by date, account, contact name, or other parameters.
- Scales pricing tiers: Offers affordable starter plans with ability to upgrade as your needs evolve.
With excellent cloud integration capabilities and a highly usable system, Xero helps small businesses connect their accounting to the rest of their operations seamlessly.
#3 FreshBooks: Streamlined and Simple
FreshBooks dominates basic accounting, invoicing, expense tracking, and timekeeping features with an intuitive, straightforward interface geared towards service businesses. Primary upsides:
- Easy invoicing: Fast invoice creation based on saved client and product details. Customizable templates available.
- Mobile app: Create invoices, capture receipts, track time from anywhere. iOS and Android access.
- Client portal: Gives clients a centralized place to view invoices with easy online payments.
- Productivity features: Robust time tracking and expense management. Mileage tracking via mobile app.
- Scales with business: Upgradable plans, with ability to add multiple users as your team expands.
For consultants, agencies, law firms and most professional services companies, FreshBooks provides an easy, streamlined solution to manage key accounting workflows.
#4 Wave: Small Business Accounting Software Free Option
Wave offers 100% free, cloud-based accounting software covering unlimited invoices, bank connectivity, and basic reporting − ideal for solopreneurs and microbusinesses. Key features:
- Totally free: Unlimited usage even as your business grows with no hidden paid tiers.
- Bank connectivity: Syncs transactions securely from business bank accounts and credit cards.
- Invoicing: Create, customize and send professional invoices. Get notified when clients view them.
- Accounting essentials: Income, expense, balance sheet, and other simple financial reports.
While Wave lacks some advanced functionality only needed by larger companies, it provides a full-featured free option for early stage and micro businesses focusing on core financials.
#5 Zoho Books: Ideal for Growing Businesses
Zoho Books meets all basic accounting and invoicing needs at an affordable price point, with ability to scale up as small businesses expand. Key highlights:
- Intuitive interface: User-friendly dashboard with built-in search and customization options.
- Robust core features: A/R, A/P, invoicing, expense tracking, inventory and more covered.
- Inventory and order management: Built-in functionalities to handle stock, sales orders, and purchases.
- Scalable pricing: Four paid plans to match needs and budget, from basic to advanced capabilities.
- Zoho One integration: Ability to access full Zoho business software suite under one platform.
Zoho Books strikes the right balance of essential accounting features, intuitive design, integrated apps, and flexible pricing to serve growing small businesses effectively.
Evaluating these top accounting software against key criteria makes it easier to determine the right solution for your small business needs and financial management priorities. Reach out if you need help selecting and implementing the best accounting platform to set up your company for scalable success.
How to Choose Offline Accounting Software
Offline accounting software offers businesses a way to maintain more control and security over their financial data compared to cloud-based solutions. While online software dominates the market with its accessibility and collaboration features, some companies find offline tools better meet their needs due to regulatory, connectivity, or privacy concerns. Understanding your business requirements helps determine if desktop software is the right choice.
The Appeal of Offline Software
Offline accounting platforms store data locally on computers or servers owned by your company. This provides enhanced protection and privacy, as financial information never leaves your premises. Some industries dealing with highly sensitive data may prefer isolating systems from the internet to minimize security risks. Additionally, if your business lacks consistent internet connectivity or faces frequent outages, desktop programs enable continuous access to accounting tools.
Key reasons companies still choose offline accounting software include:
- Regulatory Compliance: Businesses in regulated industries like healthcare and finance may need to demonstrate strict data security protocols. Maintaining financial records in a closed offline system provides more control in meeting compliance standards.
- Enhanced Privacy: No data ever touches the cloud, remaining stored securely on local servers. This prevents any unauthorized third-party access to sensitive information.
- Connectivity Issues: Remote areas or developing markets sometimes lack reliable high-speed internet crucial for cloud systems. Offline tools offer uninterrupted access.
- Legacy Systems: Transitioning large volumes of historical accounting data to a new platform poses challenges. Continuing to use legacy desktop software avoids complex data migration.
However, offline accounting software does come with some downsides companies should consider:
- Lack of mobility and remote access to real-time reporting
- No automatic security updates or new feature releases
- Higher in-house IT effort maintaining on-premise infrastructure
- Difficult to scale as business grows due to data silos and limitations collaborating
Carefully weighing your workflow needs, infrastructure, and regulatory landscape helps determine if offline accounting solutions make sense for your organization. On-premise software brings certain security and compliance advantages, but also limits accessibility and data sharing abilities - factors that contribute to long-term scalability and growth.
Free Accounting Software Solutions for Startups
Financial management is a top priority for startups looking to scale efficiently. However, robust accounting software often comes with a hefty price tag that early-stage companies can't afford. This leads many entrepreneurs to seek out free accounting tools that balance functionality with cost.
Wave Accounting has emerged as a leading free solution that empowers lean startups and small businesses to take control of their finances, without sacrificing features for the sake of zero cost.
Wave Accounting: Balancing Cost and Functionality
Wave Accounting offers one of the most fully-featured free accounting platforms available. They've managed to compress premium functionalities into an easy-to-use, free package tailored to early-stage companies.
Some of Wave's most notable features include:
- Invoicing - Create, customize and send invoices. Get paid online via credit card and bank payments. Automatically track payments and send payment reminders.
- Accounting - Generate financial reports. Track income, expenses, balance sheets, and cash flow. Create and manage budgets.
- Receipts - Snap photos of receipts. Organize expenses automatically.
- Payroll - Pay employees and contractors. Calculate payroll taxes. File payroll taxes directly to the IRS and state agencies.
- Integrations - Connect bank accounts, payment processors, and other business tools.
This robust feature set removes many barriers for resource-strapped startups. Founders can effectively manage core financial operations and gain real-time cash flow visibility to inform smarter decisions.
Beyond the functionality, Wave simplifies accounting for non-finance experts through an intuitive interface. This enables employees to leverage financial data more readily without relying as heavily on accountants and bookkeepers during the early phases.
As startups scale, Wave also allows easy migration to premium plans accounting software for small businesses with capabilities like multi-user permissions and advanced reporting. This means founders don't have to rip out Wave for a paid solution down the road as operational needs evolve. They can simply upgrade plans to retain data continuity.
The bottom line is that Wave hits the goldilocks zone between cost and key functionality for lean startups and small business. For founders operating on tight budgets with limited accounting expertise, Wave provides a free platform to remove finance as a barrier during the most precarious phases of growth.
Accounting Software for Personal and Home Use
Exploring solutions tailored for managing personal finances and how they differ from business-oriented software.
Finding the Best Accounting Software for Home Use
Assessing user-friendly options for individuals looking to streamline their home budgeting and financial management.
Individuals and families often have different needs when it comes to managing personal finances compared to business accounting. Home accounting software provides features tailored for non-professionals to track income, expenses, savings goals, investments, and more on a monthly budget.
When evaluating home accounting tools, ease of use is paramount. The software should have an intuitive interface allowing users to quickly set up accounts, categorize transactions, generate reports, and get a holistic view of cash flow without learning complex accounting methods.
Here are top options to consider for personal finance software:
Quicken
Quicken is one of the most popular choices, offering robust features for home money management. Key highlights include:
- Intuitive desktop and mobile apps to track all accounts in one place
- Automated transaction import from financial institutions
- Customizable budgets and spending goals
- Bill reminders and payment tracking
- Investment portfolio overviews
- Visual reports and charts
With strong bank connectivity and flexible transaction categorization, Quicken provides a comprehensive solution for monitoring cash flow. It suits beginners and seasoned users alike.
You Need a Budget (YNAB)
YNAB takes a unique approach, facilitating manual tracking aligned with a proven budgeting methodology. Distinctive aspects include:
- Emphasis on proactive budget creation based on income
- Easy reconciliation as transactions are entered
- Flexible handling of irregular income and expenses
- Focus on breaking overspending habits and paying down debt
YNAB suits users seeking to closely align spending with a personalized budget through disciplined tracking. The system encourages positive financial behaviors.
Mint
Mint makes money management effortless by harnessing secure financial account connections to automatically track all transaction activity. Noteworthy features:
- Free access with optional paid upgrade for enhanced analytics
- Automatic capture of spending patterns across linked accounts
- Custom categorization options
- Spending summaries by category with trends and budgets
- Bill payment through partner services
- User-friendly mobile app
For those wanting seamless, hands-off tracking of financial activity without manual data entry, Mint is an unmatched option. The automatic transactions provide comprehensive visibility into income, recurring charges, and daily spending.
Key Differences from Business Accounting Systems
Home accounting software caters towards simplifying finances for individuals, while business systems offer advanced tools for complex organizational needs.
Several key disparities include:
- User-friendliness - Personal tools prioritize ease of use for non-accounting users over advanced functionality. Business platforms support sophisticated features assuming professional accounting expertise.
- Customizability - Home options allow custom categories and budgeting methods for unique needs. Business systems adhere to standardized accounting practices and terminologies.
- Reporting - Individual reporting focuses on cash flow, net worth, and budget variances. Business analytics cover complex organizational accounting needs like managing inventory, taxes, payroll, etc.
- Integrations - Home platforms emphasize bank connections for transactions. Business solutions incorporate connections to other systems like ecommerce, POS, CRM tools.
- Pricing - Individual products are mostly free or inexpensive with premium upgrades. Business systems carry higher costs correlated to organizational needs and number of users.
The distinctions make home accounting software ideal for easily taking control of personal finances versus advanced business platforms built to handle complex organizational accounting.
Conclusion: Streamlining Finances with the Right Tool
To summarize, there are a variety of accounting software options available for small businesses and freelancers. Choosing the right solution depends on your budget, industry, desired features, and ease of use.
Top Choice - QuickBooks
QuickBooks strikes an excellent balance between robust features, usability, and brand reputation. Key strengths:
- Comprehensive accounting and financial management tools
- Scales from basic to advanced needs
- User-friendly interface and navigation
- Strong 3rd party app and integration ecosystem
- Widely used with abundant resources available
It suits most small business accounting needs and integrates well with other systems. For most, QuickBooks hits the sweet spot between power, flexibility, and ease of use.
Best for Simplicity - Xero
Xero makes accounting seamless with an emphasis on simplicity. Key advantages:
- Clean, intuitive, and visually appealing interface
- Excellent multi-currency and foreign exchange handling
- Over 700 app integrations to extend functionality
- Automatic bank feeds and reconciliation
- Affordable pricing tiers
It may better suit smaller businesses than QuickBooks, especially those dealing in multiple currencies or wanting simpler setup. Overall, Xero reduces accounting complexity.
Most User-Friendly - FreshBooks
FreshBooks excels at freelancer billing, invoicing, expense tracking, and timesheets. Key perks:
- Extremely simple, intuitive user experience
- Robust client database and invoice generation
- Easy time tracking and project cost reporting
- Neat expense management features
- Generous free tier to get started
For solopreneurs or self-employed individuals, FreshBooks provides user-friendly yet powerful financial organization. From invoices to expenses, it streamlines billing and money management.
Best Free Option - Wave
Wave delivers fundamental accounting tools at no cost for small businesses on tight budgets. Notably:
- 100% free core accounting software
- Easy invoicing, estimates, and payments
- Multi-user access and collaboration
- Bank connectivity and transactions
- Paid upgrades available
It covers essential financial needs for early stage and cash-strapped companies. The free tier makes Wave accessible for small teams getting started before upgrading capabilities.
