The 5 Best Accounting Software for Small Businesses of 2023

Importance of Accounting Software for Small Businesses

As a small business owner, accounting is one of the most critical aspects of your business. It helps you keep track of your income, expenses, and profits. With accounting software, you can simplify your bookkeeping process and focus on growing your business.

Benefits of Using Accounting Software

Accounting software provides several benefits for small business owners, including:

• Saving time and reducing manual errors
• Better financial control and visibility
• Improved decision-making with accurate financial data
• Easy collaboration with accountants and other team members
• Increased efficiency and productivity

In this guide, we will discuss the key features to consider in accounting software and provide an in-depth review of the top accounting software for small businesses. We will also offer tips on choosing the best accounting software for your business, factors to consider when switching software, and tips for maximizing the benefits of accounting software.

Key Features to Consider in Accounting Software

1. Ease of Use

When choosing accounting software, consider the ease of use for you and your team. Look for intuitive and user-friendly software with clear instructions and helpful customer support.

2. Integration with Other Software

It's essential to choose accounting software that integrates with other software you use, such as payment processors or CRM software. This will save you time and reduce manual errors when transferring data between systems.

3. Customization Options

Look for accounting software that allows you to customize invoices, reports, and other documents to match your brand and business needs. This will help you maintain consistency and professionalism in your financial records.

4. Security and Privacy

When dealing with financial data, security is crucial. Look for accounting software that provides secure data storage, encryption, and two-factor authentication to protect your financial information.

5. Scalability

Choose accounting software that can grow with your business. Look for software that offers multiple pricing plans and features to accommodate your changing business needs.

6. Pricing

Consider your budget when choosing accounting software. Look for software that offers transparent pricing with no hidden fees or charges. Compare pricing plans and features to find the best option for your business.

Top Accounting Software for Small Businesses

1. Layer

If you run your accounting processes on spreadsheets, Layer might be the best and easiest choice for you to automate your accounting pre-existing processes right away with the hassle associated with moving to a dedicated solution.

Layer is an add-on that equips you with the tools to increase efficiency and data quality in your processes on top of Google Sheets. Share parts of your Google Sheets, monitor, review, and approve changes, and sync data from different sources – all within seconds. See how it works.

Layer Features and Benefits

• Share parts of your spreadsheet, including sheets or even cell ranges, with different collaborators or stakeholders.
• Review and approve edits by collaborators to their respective sheets before merging them back with your master spreadsheet.
• Integrate popular tools and connect your tech stack to sync data from different sources, giving you a timely, holistic view of your data.

Layer Pricing Plans

QuickBooks offers four pricing plans with a forever-free one:

• Forever Free: A free plan to easily get started right away!
• Starter: €39/month
• Plus: €79/month
• Pro: €159/month
• Custom: Tailored packages for multiple licenses.

Layer Pros and Cons

Pros:

• Maintain full control over your data and user access, and eliminate costly spreadsheet errors.
• Save time by automating your data sharing, collection, and recurring data tasks.
• Increase transparency and accountability for stakeholders, ensuring alignment and increasing buy-in.
• Keep your Google Sheets setup and your current processes or solutions.

Cons:

• Not a dedicated accounting software.

Limited Time Offer: Install the Layer Google Sheets Add-On today and Get Free Access to all the paid features, so you can start managing, automating, and scaling your processes on top of Google Sheets!

2. QuickBooks

QuickBooks Features and Benefits

QuickBooks is a popular accounting software that offers a range of features, including:

• Invoicing and payment processing
• Expense tracking and receipt capture
• Tax preparation and filing
• Payroll management
• Inventory tracking

QuickBooks also offers integrations with over 650 third-party apps, making it a versatile option for small businesses.

QuickBooks Pricing Plans

QuickBooks offers five pricing plans:

• Self-Employed: $15/month
• Simple Start: $30/month
• Essentials: $555/month
• Plus: $85/month
• Advanced: $200/month

QuickBooks Pros and Cons

Pros:

• User-friendly interface
• Comprehensive feature set
• Strong customer support

Cons:

• Can be expensive for some businesses
• Limited customizability

3. Xero

Xero Features and Benefits

Xero is a cloud-based accounting software that offers a range of features, including:

• Invoicing and payment processing
• Expense tracking and receipt capture
• Payroll management
• Inventory tracking
• Multi-currency support

Xero also offers over 800 third-party integrations, making it a flexible option for small businesses.

Xero Pricing Plans

Xero offers three pricing plans:

• Starter: $25/month
• Standard: $40/month
• Premium: $54/month

Xero Pros and Cons

Pros:

• User-friendly interface
• Comprehensive feature set
• Multi-currency support

Cons:

• Limited customer support
• Higher pricing compared to other options

4. FreshBooks

FreshBooks Features and Benefits

FreshBooks is an easy-to-use accounting software that offers a range of features, including:

• Invoicing and payment processing
• Expense tracking and receipt capture
• Time tracking and project management
• Automated late payment reminders
• Team collaboration tools

FreshBooks also offers integrations with over 200 third-party apps, making it a versatile option for small businesses.

FreshBooks Pricing Plans

FreshBooks offers four pricing plans:

• Lite: $15/month
• Plus: $25/month
• Premium: $50/month
• Select: Custom pricing

FreshBooks Pros and Cons

Pros:

• User-friendly interface
• Comprehensive invoicing and time-tracking features
• Great customer support

Cons:

• Limited customization options
• Limited features compared to other options

5. Zoho Books

Zoho Books Features and Benefits

Zoho Books is a cloud-based accounting software that offers a range of features, including:

• Invoicing and payment processing
• Expense tracking and receipt capture
• Time tracking and project management
• Inventory tracking
• Sales order management

Zoho Books also offers integrations with over 40 third-party apps, making it a flexible option for small businesses.

Zoho Books Pricing Plans

Zoho Books offers three pricing plans:

• Standard: €12/month
• Professional: €24/month
• Premium: €36/month
• Elite: €129/month
• Ultimate: €249/month

Zoho Books Pros and Cons

Pros:

• Comprehensive feature set
• Affordable pricing
• Great customer support

Cons:

• Limited customizability
• Steep learning curve for some features

Tips for Choosing the Best Accounting Software

Evaluate Your Business Needs

Before choosing accounting software, evaluate your business needs and requirements. Consider factors such as the number of employees, the volume of transactions, and your budget.

Look for User-Friendly Software

Choose accounting software that is easy to use and intuitive for you and your team. Look for software with clear instructions and helpful customer support.

Consider Integrations with Other Software

Look for accounting software that integrates with other software you use, such as payment processors or CRM software. This will save you time and reduce manual errors when transferring data between systems.

Choose Secure Software

Security is crucial when dealing with financial data. Look for accounting software that provides secure data storage, encryption, and two-factor authentication to protect your financial information.

Read Reviews and Ratings

Read reviews and ratings from other small business owners to understand the pros and cons of different accounting software options. This can help you make an informed decision based on real-world experiences.

Tips for Maximizing the Benefits of Accounting Software

Train Your Team

Once you choose an accounting software, ensure your team is trained to use it effectively. This will help you maximize the benefits of the software and reduce errors and inefficiencies.

Automate Processes

Accounting software can help you automate many manual processes, such as invoicing and payment processing. Take advantage of these features to save time and reduce errors.

Regularly Review Your Financial Data

Use your accounting software to regularly review your financial data, such as cash flow and revenue. This will help you make informed business decisions and identify areas for improvement.

Take Advantage of Reporting Features

Many accounting software options offer robust reporting features that can help you analyze your financial data and gain insights into your business performance. Take advantage of these features to make informed decisions and optimize your business operations.

Conclusion

Choosing the best accounting software for your small business can be a challenging task. Still, by evaluating your business needs and considering key factors such as user-friendliness, integrations, and security, you can make an informed decision.

By taking advantage of the features and benefits of accounting software, you can save time, reduce errors, and gain insights into your business performance, helping you make informed decisions and optimize your operations.