Business Finance Tech

The Best Accounting Software for Small Business

The Best Accounting Software for Small Business
Written by MicroStartups

When you’re trying to get a company off the ground and start making strides to reach your entrepreneurial goals, money is everything, making it one the most visible stress on your business. It determines the staff you can hire, the equipment you can buy, the office space you can rent, and the services you can use. It governs your future.

Take your eye off your finances for just a short time, and you can run into serious trouble from which you might not be able to escape. That’s why you must commit from the very beginning to keeping close track of your income as well as your outgoings — only when you know precisely where you’re making and spending money can you root out and correct mistakes.

What’s the best way to handle your small business finances? What’s the best accounting software option for your small business? You could do it manually, or outsource it — or you could use accounting software. Let’s run through why that’s a good idea, what types of software there are available out there for small businesses today, and which tools we recommend:

Why should you use accounting software?

Anyone who’s ever tried to run a small business understands what it’s like to feel stretched too thin. You don’t just feel responsible for every last facet of your operation — you are responsible, so you make an effort to handle everything, even though one person can’t shoulder that workload for very long without reaching the point of exhaustion.

Outsourcing is one way to address this, but that introduces fresh difficulties. Firstly, there’s the matter of cost. If you want things done competently, you’ll need to pay a competitive rate. And even if you find someone you believe to be trustworthy, you still need to oversee their work — fully abdicating your responsibility (aside from financially) isn’t likely to end well.

The option of using accounting software, then, can offer a convenient middle ground. The software lightens your burden by allowing you to get your accounting done much more quickly and easily, and ensures that you can keep a close eye on your financial performance. And since it’s typically a lot less expensive than hiring someone to handle your accounting, it can avoid the self-defeating scenario of spending too much money trying to spend less money.

What types of accounting software are there?

Distinguished by convenience, sophistication, and cost, there are five rough tiers of accounting software. Let’s go through them:

Spreadsheet applications

Whether you get a Microsoft Excel license, use the free Google Sheets, or prefer one of the countless other spreadsheet designers out there, you can achieve a lot through using spreadsheets for your finances — just be mindful that you’ll only be saving time if you really know what you’re doing or have extremely basic requirements.

After all, if you want to come away with any interesting calculations about your performance, you’ll need to create all the formulas yourself. While you can get quite far through online research, you won’t realistically be able to approach the kind of functionality available through dedicated accounting software.

Freemium utilities

The freemium model is all about the gateway experience: providing a basic level of functionality for free, and hoping to tempt users to pay for additional features. And while this can be handled horribly (as evidenced by the many free-to-play games and limited-to-the-point-of-uselessness apps on the market), it doesn’t have to be, and plenty of freemium tools are extremely fair.

The advantage of using a freemium accounting utility is that you can use functions specifically designed for finance without completely committing to the idea of investing in software. It’s a matter of dipping your toe in the ocean — if the water is comfortable, then you can go deeper by paying for a full experience (often worthwhile, because the freemium model has become a core part of the SaaS world, and is used for great products such as Wave or Zoho Invoice).

Commercial programs

Moving up from the freemium model, you have the first tier that’s exclusively available to those who pay. Commercial-grade accounting software is reasonably flexible and powerful, with the average package encompassing one or more of the various distinct elements of business accounting: billing, project management, payroll, tax calculation, etc.

The downsides are that you need to commit to it (outside of using short-term free trials that may well be quite limited), it’s costlier than freemium software (though certainly more powerful), and it can be awkward to set up — plus the level of functionality on offer may present something of a learning curve. Popular commercial accounting programs include Xero and QuickBooks.

Enterprise systems

If your business is big enough to warrant something more powerful and cohesive than a commercial-grade solution, it might benefit from an enterprise-level alternative. Financial software designed to handle all elements of accounting and finances for an entire company is known as ERP software (ERP standing for enterprise resource planning).

An example of an ERP solution is the mid-range Sage 300 package, which exemplifies one of the frustrating elements of enterprise-level software by omitting pricing information and requiring any interested party to get in touch for a quote. Given the type of price tag you’re likely to be looking at, investing in an ERP package is something to leave for an eventual expansion.

Custom builds

It’s possible that even an ERP system can’t cover your accounting needs. Perhaps there’s something extremely unusual about how your business operates, and no off-the-shelf package fits the bill, or maybe you aspire to do something innovative with your fintech and you need complete control over the structure of the program you use. If so, your only option is to invest in a custom build: an accounting tool built from the ground up to meet your needs.

Naturally, this is by far the most costly option of the group. Good software developers are expensive, and if you need something beyond the capabilities of ERP suites, it’s going to take a long time to develop. It isn’t worth thinking about for any small or medium business. It’s barely worth considering for the average enterprise business. Unless you happen to have an elite developer with a lot of free time as a member of your team (somewhat implausible, to say the least), forget about the prospect.

All that established, which tier you should investigate most closely will depend on your specific needs, as well as your interest in particular tools — for instance, one tool that has your preferred variety of user interface might be more worth your time than others that seem better overall.

Cost, features, ease of use: what to look for

When you’re trying to choose accounting software to save you time and money and help your small business grow, what should you be looking for? Well, there are there things in particular you should think about: those being cost, features, and ease of use. Let’s look at them in greater detail:


Given that the primary goal of accounting is to cut down of costs, it can be counter-productive to spend too much on accounting software. Conversely, if you don’t spend enough, you might not get software that can do everything you need it to do, requiring you to do more manual work (something that will take up your valuable time).

There are three possible payment models:

  • Using a free accounting tool is financially ideal, of course, but you’re likely to run up against frustrating limitations — sometimes because your tool of choice is fairly simple, and other times because more advanced features require payment.
  • One-time payment. Software that requires a one-time payment allows an easy calculation of value. If you can find something with a lifetime license that covers your needs, you can simply work out if you’re willing to pay the price. The downside of this approach is that such a tool can easily be abandoned by the developer, allowing it to become outdated and no longer fit for use.
  • SaaS accounting tools are the most common today, and they’re generally good for all parties involved. The developer gets a consistent source of income from the monthly payments, and the customers get to spread out their costs and benefit from ongoing support and the reassurance that their software will receive consistent updates.

As for how much you should spend, there’s no general figure to go by. It all comes down to answering one question: how much money will accounting software save you? Factor in the time you’d otherwise spend tallying things up, and any costs you’d incur from bringing in financial advisors to handle things on your behalf.

If you’re totally unsure where to start, consider speaking to some other businesses (in your industry or beyond) to see how using accounting software has affected their profitability. A business that has been using a particular package for a year or so should have a good idea of how much it has saved them.


You might think that having as many features as possible will be ideal, but it isn’t quite that simple. For example, it’s typically better to do one thing exceptionally well than to do ten things in mediocre fashion. Look for software that offers everything you need and can do it well.

Let’s run through typical features of accounting software and consider what they mean:

  • Asset management. The core of accounting software, this involves the general management of your financial assets: where your money comes from, where it goes, and the assets you own. You log everything initially, then route all your financial activity through the software using suitable integrations.
  • Billing and invoicing. Generating, distributing and chasing invoices takes a lot of time, so it’s highly valuable to have a software suite manage the bulk of it for you. Once you’ve added client details, you can set everything to be automatically generated and sent out at the appropriate times.
  • Payroll management. Even if your business only has a small number of employees, it can still be a pain to manually arrange for everyone to get paid on time (and in the right amounts). Payroll management features allow you to get everything automated and ensure that all legal boxes are ticked.
  • Budgeting and forecasting. It’s one thing to have your financial performance tracked, but it’s another to have it analyzed. An accounting software suite with budgeting and forecasting capability can not only rate your company’s performance but also produce realistic budget figures and sales targets for the future.
  • Inventory management. If you run a retail business, be it traditional or online, handling inventory might be a great source of frustration. Accounting software can’t help you move stock around any more easily, but it can link your inventory log to your finances and help you figure out where you’re making (or losing) the most money.
  • Project accounting. Your business might be large enough to pursue multiple internal projects, or (more likely) you may simply want to track your expenses differently for each client. If so, having software that allows you to define distinct parameters for distinct projects can be useful. It isn’t typically vital, though.

You might find that a simple asset management solution is perfectly adequate for your needs, or it may be that you need all of these features (and more). What’s most important is to remember what accounting software is capable of — if there’s a different feature you’d really benefit from, do some research, because there’s every chance that there’s a suitable tool out there.

Ease of use

It’s possible to find a tool that’s well within your price range and equipped with every one of your required features, yet still realise that it’s not the right tool for you. Why? Because of UX (user experience) design. There’s little use in having an incredibly powerful accounting tool if you can’t figure out how it actually works.

Consider that you won’t just be leaving the software to run in the background. You’ll need to update it from time to time, check that everything is going as it should, and manually enable or disable particular features to suit demand. That means you need to be able to use it, and use it comfortably without getting frustrated.

Customer support also plays into this. Let’s say you set aside a workday to configure your new accounting software, but you can’t figure out how to enable an important function. You look for a help section, but nothing is showing up. What do you do? Well, you don’t want to waste any time, so it makes the most sense to reach out to the developer. Even if they’re able to help you, it’s still frustrating — and there’s a chance they won’t help you.

A well-designed piece of accounting software should offer an intuitive interface that’s easy to understand, even for someone without a huge amount of accounting knowledge. It should be simply to install, customize, and update. It should provide a native knowledge-base, and ideally a glossary to cover the most important terms.

The best thing you can do is take advantage of free trials before investing in anything. Never buy a tool unless you’ve used it extensively and feel absolutely confident that it’s something you can comfortably use for many years (and trust with something as vital as your finances).

Our favorite accounting software

All that said, what do we personally recommend you use? Here are some excellent options to consider testing out:


Being a completely free cloud-based choice, Wave allows unlimited collaborators from a single login, and offers basic accounting features plus invoicing and payroll management. The interface is slick and straightforward, the security standard is excellent, and it will easily import data from legacy software. Does it have limitations? Inevitably, yes — but for a small business that doesn’t require anything exceptional, there’s little reason to look beyond Wave.


Starting at $5.00 per month per user, Quickbooks is perhaps the dominant accounting tool for small businesses, and it certainly has an excellent range of features (including budgeting and forecasting options, most notably) as well as unlimited 24/7 customer support. If you’re working with international clients (or selling throughout different time zones), then the 24/7 support alone might give it the edge over Wave.


Odoo is an interesting case, being an ERP solution in principle but actually not being all that expensive. There’s a caveat, though: it’s a modular suite, and the accounting module in isolation will cost you more than a comparable tier from Quickbooks. Will it be worth it? It really depends on whether anything else in the Odoo ecosystem is useful to you, because if you want a helpdesk solution and a CRM, you could get both through Odoo. This would provide a great level of interconnectivity to your operation.

What accounting software should you choose?

Now that we’ve given you our favourites, which do we suggest you use? Well, it depends on your circumstances. Here’s the summary:

  • If you just want the best you can get without spending a penny, then Wave is the way to go. It’s simple, convenient, intuitive, and entirely free. What do you have to lose?
  • If you need more functionality, step up to Quickbooks. It’s popular for a reason, and its wide range of features (coupled with its budget-friendly tiering) will be a huge help.
  • If you want your accounting software as part of a larger system, try Odoo. Having everything running through one suite can be hugely convenient (if more expensive).

Wrapping up

Let’s recap what we’ve looked at: we’ve established why accounting software is worthwhile, looked at the types of accounting software you can get, set out what you need to think about when considering accounting software, and given our personal recommendations.

If you’re still reading at this point, then you’re clearly very interested in using accounting software for your small business. You should go for it, and don’t just go with our recommendations for the sake of it — do some research of your own, and use as many trials as you need to pick out the perfect solution for you. Good luck!

About the author


A team of writers and marketers, MicroStartups was founded to inspire the entrepreneurial and business community to give back. We believe in business growth through giving and supporting the local community.

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