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Written by
Katy Ratican
16 Aug 2021
4 minutes
6 best accounting software tools loved by small businesses
How small businesses, freelancers and startups can use software tools for accounting – and the six best to choose from
Best accounting software small businesses

Accounting is something no business can avoid. While it’s no problem for large enterprises, small businesses, startups and freelancers often have to hire accountants not connected to their business. At least that used to be the case, until some of the best accounting software for small businesses made it easy.

Mobile apps for everything from appointment scheduling to expense tracking and virtual phone numbers have been helping small business owners better manage their time and resources. The best accounting software for small businesses also is in that league.

What does accounting software do for small businesses?

Accounting software does everything that an accountant is employed to do. It keeps track of a business’s expenses, cash flow, and accounts payable and receivable. The best accounting software for small businesses also helps not just prepare for filings taxes but also claim deductions where applicable.

How does accounting software work?

Accounting software automates bookkeeping and produces actionable data for small businesses and startups. Even those with no experience in accounting can generate invoices, manage payroll and bill payments through an accounting app.

All you have to do is input numbers in any of the templates or scan receipts for the software to do these tasks. Along with ensuring that payments are made and received on time, the software will also produce valuable financial reports.

6 best accounting software for small businesses

QuickBooks

For small and medium-sized businesses, it hardly gets better than QuickBooks. More than accounting software, it’s a finance manager that automatically organises the books. It can create multiple spreadsheets, read scanned receipts, calculate expenses based on mileage and ensure that you get paid faster with the app’s invoicing.

Cost: Packages start from £6 per month, increasing after four months (discounts apply, please refer to QuickBooks for up-to-date information).

Ideal for: Freelancers, small and medium enterprises

FreeAgent

Over 100,000 businesses trust FreeAgent’s easy-to-use, simple and reliable accounting software. The app intuitively sends recurring invoices with automatic reminders for clients who are late to pay and has a user-friendly dashboard. You can also connect the app to your bank accounts for a comprehensive view of your financial health.

Cost: Free for the first 30 days, then $10 for six months and $20 after that (discounts apply, please refer to FreeAgent for up-to-date information).

Ideal for: Small businesses

Xero

If you’ve absolutely no experience in bookkeeping, what you want is simple accounting software like Xero. You can easily pay bills, track and claim your expenses and connect the app with your bank. What makes it efficient is its ability to keep track of the profitability of your various projects.

Cost: Plans start from £10 per month for the first six months, through to £30 for a premium account (discounts may apply, please refer to Xero for up-to-date information).

Ideal for: Small businesses and accountants

FreshBooks

If there’s accounting software that was built with the needs of service-based businesses in mind, it’s FreshBooks. That’s because it understands the primary responsibility of services, which is invoicing. It not only offers several easy-to-use templates for invoices but also helps businesses send proposals and track and collect retainer payments. It also effortlessly integrates with over 100 apps for greater efficiency.

Cost: Starts at £4.40 per month and goes up to £12 and beyond for specialised features (discounts apply, please refer to FreshBooks for up-to-date information).

Ideal for: Service-based businesses and accountants

Zoho Books

For its users, what stands out in Zoho Books is its exceptionally user-friendly interface. You don’t have to be an accountant to use the app to manage your finances. It’s good at automating workflows across departments and effortlessly takes care of time-tracking, and inventory management. The app also generates easy-to-understand financial reports that reveal the health of your business. Users are also satisfied with its customer support.

Cost: Starts at £10 per month

Ideal for: Startups, small businesses, freelancers

Wave

Are you a freelancer about to enter the gig economy? Or a small business that doesn’t have any employees and so doesn’t have to worry about payroll management or track inventory? Then Wave is the accounting software for you. It’s a no-frills app that takes care of the basics incredibly well. It’ll handle your invoicing with the utmost ease and will help you create a professional-looking tax return at the end of the year. The best part? It’s absolutely free.

Cost: Free

Ideal for: Freelancers, early-stage contractors and small businesses with no staff

In short

If you can get the best accounting software for small businesses, you’re also getting an accountant, financial manager and tax consultant. Make accounting software work for your business, whether you’re a one-person sole trader, a start-up or a small business.

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