The 7 Best Accounting Software Options of 2020

Keep track of all your expenses the easy way

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If you run a business, you absolutely must track your income and expenses. Your business accounting is required for taxes, and putting in a little extra effort up front can save a ton of time and hassles when tax season rolls around. Even more, accurately tracking expenses can help you lower your tax bill. But most accounting software isn’t cheap, and it can take a lot of work to learn how it all works. Here are the best top accounting software options to choose from for your business.

Best Overall: Quickbooks

QuickBooks
Courtesy of QuickBooks

Intuit’s Quickbooks is the 800-pound gorilla of the small business accounting world. While it isn’t perfect and isn’t cheap, it is one of the most fully featured accounting software packages in existence. Windows and Mac versions exist for the desktop, but Quickbooks is slowly working to push users into the cloud (subscription instead of one-time cost). The Mac version does not have nearly the full feature set of the Windows or online version, so keep that in mind when choosing software for your business.

Because Quickbooks is so widely used, it is easy to find tutorials, guides, videos and other information on how it all works. But the downside is that you need tutorials, guides and videos to understand how it works. Intuit’s own help forum is often riddled with incorrect answers, so getting through a frustrating issue may take longer than you would hope. But, at the end of the day, it is the best known and most popular accounting software for a reason: it works well for a wide range of businesses and business needs. Quickbooks Online offers several versions ranging in cost from $15 for the self-employed version up to $70 per month for the Plus version. Payroll and payments services cost extra.

Best Cloud First: Xero

Xero
Courtesy of Xero

Quickbooks started with desktop, but Xero was always cloud first. Mac users who can’t find what they need from Quickbooks for Windows were some of the earlier adopters of Xero, which includes 24/7 live chat support at no extra cost. Xero is also huge on integrations, with more than 600 integrations to help business owners manage invoicing, inventory, payroll and much more.

One standout feature is the ability to track time and money spent on specific projects, so you don’t let any dollars slip through the cracks. Xero is designed for an array of businesses and offers a starter version for $9 per month. The highest end premium version for $60 per month includes multi-currency, expenses, and project-tracking support. To add on the Gusto full-service payroll version, it costs $39 per month for the base and an additional $6 per person added.

Best for Efficiency: Zoho Books

Zoho Books
Courtesy of Zoho Books

Smaller businesses that don’t have lots of employees, inventory and other complex needs don’t have to deal with the complexities bigger firms have to deal with. Zoho is best for the smaller sized businesses that just works. Zoho offers several apps, and Books is its accounting software. It includes easy-to-understand dashboards and graphs and takes pride in straightforward usability. You don’t need an accounting degree to make sense of Zoho.

One particularly useful feature for service businesses is automated payment reminders when your clients are not paying quickly as agreed. It offers manual journal entries, financial statements, project management, automated banking, inventory and collaboration tools. Pricing ranges from $9 per month for the Basic plan up to $29 per month for the Professional version, with discounts when you pay for a full year up front.

Best Free: Wave

Wave
Courtesy of Wave

It doesn’t get cheaper than free! Wave is a standout in the accounting software space as it offers the majority of features at no charge for users. It also offers the ability to track both personal and business finances in one place, rather than going to one app for personal and another for business. However, you sometimes get what you pay for.

The accounting features are not as in-depth as some others on this list, but if you only have basic needs it should work fine. It even includes free invoicing. To make money, Wave charges for payment processing and payroll services, which are integrated with the bookkeeping suite of tools. The accounting software is free of charge. Credit cards and payroll pricing are in-line with most industry competitors.

Best for Freelancers: FreshBooks

FreshBooks
Courtesy of FreshBooks

Freelancers and other solo business owners might not need a giant, complicated accounting system. FreshNooks offers what you might call bookkeeping light, with no double entry accounting support. However, it is easy to use for time tracking, invoicing, payments and reports. And it is one of the easiest accounting apps to use.

While it is great for self-employed workers, it is not powerful enough for many small businesses. Plans range from $4.50 per month for the Lite version and up to $25 per month for the Premium version. Lite supports only five clients, so it isn’t viable for many users. The most popular plan, Plus, runs $7.50 per month and supports up to 50 clients.

Best for Online Sellers: GoDaddy Bookkeeping

GoDaddy
Courtesy of GoDaddy

Another bookkeeping option good for freelancers, GoDaddy Bookkeeping is a bargain starting at just $3.99 per month for the first year. Formerly known as Outright, GoDaddy acquired the accounting software company in 2012 and renamed it GoDaddy Bookkeeping. Its features are on the basic side, and like FreshBooks, does not include double entry accounting. But it does make time tracking and quarterly estimated taxes a lot easier than doing it manually.

The best features are integrations with online sales platforms such as Amazon, eBay and Etsy. If that is where you do most of your business, GoDaddy Bookkeeping could be a good choice ​and a cheap one. Prices range from $4.99 to $14.99 per month, with a 20 percent discount your first year.

Best Everyday: 17hats

17hats
Courtesy of 17Hats

Small business owners do more than one job any given day. They wear lots of hats. Hence: 17hats. This accounting software is a lot more than accounting software. It is a fully featured productivity suite for small businesses that includes bookkeeping features.

From the dashboard, you can get to your accounting records or manage contacts, projects, leads, questionnaires, quotes, contracts, invoices, payments, calendars, to-do lists, time tracking, workflows, templates and even sync client emails from your inbox. It is a lot to handle and probably overkill for many businesses. But if you want everything under one roof, 17hats is there for $45 per month. Discounts available for annual ($295) and two-year commitments ($395).

What Is Accounting Software?

Accounting software records and processes accounting transactions for small businesses. Business owners, bookkeepers, and accountants are all likely to use accounting software, which can track accounts receivable, accounts payable, and receipts. It’s also useful for generating reports at tax time. Overall, accounting software helps record and report all of a business’s financial transactions in one place. 

How Does Accounting Software Work?

Accounting software can be cloud-based or it can be downloaded to a desktop computer. Users typically pay monthly subscription fees to use the software, which can range from simple, mostly DIY programs to complex and customizable options.

The user chooses the type of software based on their budget and desired features, then inputs their data and scans receipts. They can even connect the software with their bank, credit card accounts, and other programs such as expense-tracking apps

Accounting software typically has built-in ledgers and templates that you fill out; then it automatically performs the calculations and ensures accurate totals. It can generate reports and accommodate multiple users. It can be used in conjunction with your accountant, or even instead of an accountant, if you know what you’re doing. 

How Much Does Accounting Software Cost?

Accounting software varies greatly in terms of features and functions, so the cost varies, too. Prices typically range from $5 per month to $45 per month. Some software companies offer discounts for paying annually; others may charge per user instead of per business. 

Is Accounting Software Worth the Cost?

Accounting software is generally much cheaper than an accountant and more accurate than keeping track of your records by hand. If you want to save money on your taxes, track your expenses, and properly fill out tax forms to avoid audits, then accounting software is definitely worth the cost. 

Even if you use an accountant, software can be a helpful way to store receipts and tax documents and send information directly to them. Using accounting software keeps you informed and up-to-date on your business’s accounts and is a good resource for reviewing your financials and deciding what changes, if any, should be made. 

How We Chose the Best Accounting Software

We researched and reviewed the best accounting software on the market to come up with our top choices. We made our list based on each app’s features and tools, what they specialize in, how reputable the company is, the cost, and more.