Top 7 Accounting Tools for Small Businesses in 2023

Small businesses are the backbone of the economy in any developing country. Small and medium-sized businesses represent 90% of all businesses worldwide. They create more jobs than any other sector, accounting for a large part of GDP. But running a small business is no easy task. One of the most critical aspects of success is keeping accurate records of expenses and income. Customized Finance & Accounting BPO services enables your business to enhance its operational and financial agility by streamlining and optimizing key processes.

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There are tons of accounting software and apps designed to specifically help small and medium-sized businesses create invoices, track and manage inventory, manage payroll for employees, overall business finances, and other critical functions.

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Consider This Before Investing in an Accounting Software

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‍Small business owners who choose an accounting software are more likely to be aware of their company's finances, with 64.4% utilizing it, according to a recent survey by GoRemotely. It's excellent because 60% of small company owners claim to be inadequately educated about finance and accounting services.

1. Features: Every small business has different needs, such as if it’s a services company, they won’t need an inventory management feature compared to a product company. Hence, it is crucial to list what features you need before deciding on accounting software.
2. Ease of Use: A lot of this software has a learning curve, and it will take some time for you and your team to get used to it. Consider how much time you're willing to invest in learning a new software vs. the benefits it brings to your business.
3. Cost: Some accounting software is priced monthly, while some have a one-time payment. Consider your business budget and see which pricing model works better for you.
4. Convenience: Many accounting software now has mobile apps, making it easier to track your finances. Consider how important this feature is for you and your business.
5. Scalability: As your business grows, you might need to invest in more robust accounting software to accommodate your growing needs. Consider how easily you can upgrade to a paid plan or migrate to another tool if needed.

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To understand which accounting tool would be the best fit for small businesses, we researched more than 25 software, tools, and mobile apps before concluding the top seven.

We chose these tools based on the features and functions specifically designed for small business owners, how easy they are to use, their cost-effectiveness, and the overall features.

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Curated List of Top 7 Accounting Tools for Small Businesses in 2023

1.  FreshBooks

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FreshBooks is one of the best and most popular accounting tools. It helps you manage invoicing, time tracking, payments, and more. It is a fast, secure, and easy-to-use tool.

With exceptional customization, you may personalize your emails and create your invoice, including your logo and signature. It also includes an automatic expense tracker. Plus, it makes it easy to get paid with features like automatic late payment reminders and online payments.

Advantages of FreshBooks:

• It’s mobile-friendly software that lets you stay connected with customers with an intuitive and accessible interface
• It supports multiple languages and currencies to manage your finances conveniently
• They provide excellent customer support via almost all digital and traditional channels
• The tool also offers actionable insights to drive your budgets, late payments, overheads, etc.
• All your transactions and data are secure with encryption and SSL certification.

Pricing:

FreshBooks offers four different versions, namely, Lite ($4.50/month), Plus ($9.00/month), Premium ($16.50/month), and Select (Custom Pricing).The only drawback is the tool does not provide any free plan. And also, the tool is cloud-based, so you cannot deploy it on-premise once you scale.

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Also read: How To Keep Invoices Organized in Accounting

2. Zoho Books

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Zoho Books is trusted online accounting software that can help you manage your finances, automate business workflows, and work collectively with other departments. Zoho Books is known for its simple interface.

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You can easily track your expenses, create and send invoices, and even monitor your inventory levels. It also includes a project management feature to track project progress and deadlines. The tool also provides automation to avoid tedious, error-prone, and repetitive tasks.

Benefits of using Zoho Books:

• The tool offers a 14-day trial period and a free-to-use plan for a lifetime with limited features like one user and 1000 invoices per year only
• Zoho Books is compatible with most third-party integration for convenience. It is also compatible with mobile platforms.
• The tool provides various customization options and templates to create invoices as you want with your logo, branding, and text.
• The tool also provides a client portal to get easy approval of estimates, bulk payments, etc.
• The dashboard is unique, and the data such as receivables, cash flow, income & expenses is well-organized for easy understanding.

Pricing:

Zoho Books offers six different versions, namely, Free version (INR 0), Standard (INR 749/month), Professional (INR 1,499/month), Premium (INR 2,999/month), Elite (INR 4,999/month), and Ultimate (7,999/month). The only flaw in Zoho Books is they do not have live chat support, which could be a deal-breaker for small business owners.

3. QuickBooks

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Intuit QuickBooks is arguably the most popular accounting tool for small businesses. It helps you manage your employees’ finances, invoicing, and even payroll. QuickBooks is known for its easy onboarding experience, clean UI, and comprehensive features. Custom invoicing, custom dashboards and reports, cash flow management, and inventory management are some of the top features of QuickBooks.

Advantages of using QuickBooks:

• QuickBooks helps you file quarterly and annual tax returns by exporting the tax data easily
• The tool allows you to sort transactions and expenses into tax categories automatically
• You can track all your expenses in one place. It also allows efficient, real-time collaboration between team members by providing unlimited access.
• For businesses in India, you can create customized GST invoices matching the GST format.
• The tool offers extensive customer support through phone, email, ticketing, and live chat systems.

Pricing:

QuickBooks offers four different versions, namely, Simple Start ($15/month), Essentials ($27.50/month), Plus ($42.50/month), and Advanced ($100/month). The tool is limited to only the English language and does not provide a free plan to start.

4. Wave

Wave Accounting is a comprehensive and integrated software that may handle all your accounting demands. It's one of the best tools for small businesses, self-employed people, and freelancers. The tool is entirely free to use. The tool focuses on three essential things that small businesses need help with: Accounting, Invoicing, and Compatibility.

Benefits of Wave:

• Wave accounting allows you to track your income and expense and sales tax on that data accessible forever
• The dashboard has been designed to read and understand finances easily
• It provides access to double entry and multiple devices
• The best thing about Wave is it is entirely free, with no additional or hidden charges
• The accounting tool is compatible with all devices and does not need to be installed separately as an app

Pricing:

Wave offers multiple options to choose from; Invoicing ($0), Accounting ($0), Banking ($0), Payments (2.9% + $0.6/transaction, 3.4% + $0.6/AMEX transaction, and 1%/transaction for Bank Payments), Payroll (Tax Services: $40/month + $12 extra charges that may exceed and Self Service: $20/month + $12 extra charges that may exceed), and Advisors (Bookkeeping Support: $149/month and Accounting & Payroll: $379 - one-time fee). The tool does not offer a credit note feature and charges a processing fee for some transactions like dispute settlement or return fees.

5. Xero

Xero is one of the most recent accounting software, among others. It comes fully equipped with all of the accounting functions you'll need to develop your small business. The accounting tool is web-based and can be accessed from anywhere.

Advantages of using Xero:

• The tool provides essential asset management, project management, and inventory management features
• One of the better features of this tool is the business dashboard. You can use the dashboard to view in-built charts and graphs for actionable insights and make data-driven business decisions based on that.
• It offers a 30-day free trial to help you get familiar with the tool
• There is 24x7 customer support available through almost all channels
• The tool helps you to set up recurring bills and automated payment reminders

Pricing:

Xero offers three specific versions, namely, Early ($13/month), Growing ($37/month), and Established ($70/month). For individual traders, new businesses, and the self-employed. Suitable for fast-scaling small businesses. Suitable for established businesses. Free 30 Days Trial Inclusive of All Features Additional: Full-service payroll at $39/month. The tool is relatively new, so the technology is still improving. The tool might have a few bugs.

6. Accounting Seed

The highly configurable software assists you in managing all of your business accounting activities. The software is simple and highly adaptable, providing cooperative access to help you make strategic decisions. The key features include financial reporting, tools to configure processes per needs, job or event automation, inventory and order management, sales order management, etc.

Advantages of using Accounting Seed:

• One of the most user-friendly and highly-customizable tools
• It helps you analyze overall activities to make better decisions
• You can create automated and subscription-based billing as per your needs
• Brilliant customer support via phone, email, chat, and tickets

Pricing:

Custom Pricing Provided by Vendor. No free trial, No free version. You need to contact their team to know the pricing details. This might become a concern for SMBs because of no transparency.

7. Zip Books

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Zip Books is a clean, simple, and compelling account software that encourages you to work smarter. It's a web-based tool that automates all of your accounting activities. It can generate invoices, income statements, and financial reports.

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Simple features such as accounting, billing, expense management, actionable reporting, and team management make it a fantastic accounting software to use.

Advantages of using Zip Books:

• The free version of this accounting tool allows you to send unlimited invoices, manage total vendors and customers, and offers a 30-day trial period
• Customer support is available through phone and email only
• The tool allows you to send custom quotes and estimates to your customers in multiple currencies
• You can also accept digital payments using Zip Books

Pricing:

ZipBooks come in Free version, Smarter ($15/month), Sophisticated ($35/month), and Accountant (Custom Pricing). Custom Unlimited invoices, Vendors, and Customers Free Trial Available. The tool is only available in the English language. It also does not provide support via live chat or ticketing.

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Conclusion

It's essential to try out a few different accounting software before you settle on one, as each tool provides unique features and benefits per your needs.  We have used multiple accounting tools for small businesses and helped many. If you're looking for an accounting tool to help you manage your finances and grow your small business, consider one of the tools from this list as per the features you need and your budget.

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Invensis is an outsourcing solutions company that helps small businesses and startups with their accounting & financing services and tax needs. We offer various services to make the process easier for you, including bookkeeping services, tax preparation services, and more. We have over 22 years of experience helping small businesses just like yours. Contact us today to learn more!

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