The Best Accounting and Invoice-Generating Software for Small Business in 2022

The best invoicing software makes it easy for you to track projects, estimates and invoices, and get paid on time. They include features that automatically convert quotes into invoices and track billable hours. Most offer client portals to easily get approval of estimates, so you can get to work and get paid.


The Best Accounting and Invoice-Generating Software for Small Business in 2022


What is accounting software?

Accounting software is an application that records and reports a business’s financial transactions. Core modules of accounting software includes accounts payable and receivable, billing, and bookkeeping. Non core modules of accounting software may include debt collection, expenses, timesheets, purchase reconciliation, payroll, and reporting for all of these. Accounting software is either cloud-based or desktop-based. The best accounting software for small businesses listed here is cloud-based.

The 11 Best Accounting Software for Small Business of 2022

  • Small businesses that need basic invoicing and reporting capabilities will do fine with free or low-cost cloud-based accounting software. As your business grows, you can add more features and functionality.
  • Businesses that have more complex needs have a lot of choices for accounting software. Your business’s specific needs will determine which accounting application is the best fit.
  • Businesses should look for accounting software vendors that are transparent about their pricing.
  • This article is for business owners who are looking for accounting and invoicing software.
  • When you start a business, accounting software is one of the first business applications you need to get. The best accounting software helps you create invoices, record incoming and outgoing payments, identify and follow up on past-due receivables, and run reports that help you analyze your financial health and other aspects of your business.

    COMPARE OUR BEST PICKS

    Accounting softwareUse caseStarting priceFree trial periodMobile applicationsIntegration optionsBill pay tools
    QuickBooksSmall businesses$15 per month30 daysYesYesYes
    FreshBooksInvoicing$4.50 per month30 daysYesYesYes
    Zoho BooksMicrobusinesses$9.00 per month30 daysYesYesYes
    Oracle NetsuiteERP toolsCustomN/AYesYesYes
    ZarmoneyTransparent pricing$15.00 per month14 daysYesYesYes
    GoDaddyOnline merchants$4.99 per monthNoYesYesYes
    Wave FinancialFree optionFreeN/AYesYesYes
    Sage BusinessFreelancers/self employed$10.00 per month30 daysYesYesInvoicing
    XeroGrowing businesses$11.00 per month30 daysYesYesYes
    MelioFree accounts payableFreeN/ANoLimitedYes
    PlootoAutomating accounts payable$25.00 per month30 days
           

1. Intuit QuickBooks Online: Best for Small Businesses

What can’t QuickBooks do? The extremely popular accounting software is used by small businesses across the country. Accountants are quick to praise the application for its affordability, ease of use and effectiveness. It’s hard to find many flaws with QuickBooks, especially considering the needs of small businesses today. QuickBooks Online offers small business owners a feature-rich accounting platform that integrates with tons of business applications and doesn’t break the bank. Many businesses find it helpful to connect their credit card processing provider to their accounting software to close the loop on their sales. We like that the software is cloud-based and updated regularly.

2. FreshBooks Accounting Software: Best for Invoicing

If you need to create and send invoices, it can be challenging to find a small business accounting app that matches your needs. Some solutions excel at invoicing but offer no accounting features; others include solid accounting services but lack quality invoicing tools. FreshBooks, on the other hand, succeeds at both.

3.Oracle NetSuite Accounting Software: Best ERP Tools


Oracle’s NetSuite is a great choice for small business owners who want to get a complete picture of their business while automating aspects of accounting. With this software, you can manage all aspects of your business from one dashboard, making NetSuite our pick for the best accounting software with enterprise resource planning (ERP) tools.

4. Zoho Books Accounting Software: Best for Microbusinesses

Microbusinesses need simple accounting software, and that’s where Zoho Books comes in. Zoho Books offers all of the basic features that microbusinesses need, as well as advanced tools such as project billing and time tracking. It also has integrations, so you can continue using the software as your business grows. We selected Zoho Books as the best accounting application for microbusinesses because of its simplicity and value.

5. Melio: Best Free Accounts Payable Software

Some business owners don’t need complex accounting software. If you just need to send invoices and receive payments, you should seriously consider Melio. We chose this free accounts payable software as one of our best picks because you can make and accept payments, manage bills and integrate with QuickBooks for free.


6. GoDaddy Online Bookkeeping: Best for Online Merchants

The sales channels are blurring for small business owners who must manage both online and offline sales, which is why it’s important for those businesses to have an accounting program that can keep all of those transactions together. GoDaddy Online Bookkeeping stands out in that regard, thanks to integrations with marketplaces such as Amazon , Etsy and PayPal; the ease with which you can send invoices and accept payments; and the ability to run a slew of reports. Plus, you get all of those features at an affordable price, making GoDaddy Online Bookkeeping our choice for the best accounting software for online merchants.

7. Xero: Best for Growing Businesses

Although many businesses start small, they don’t always stay that way. You want accounting software that can grow alongside your business, and Xero does exactly that.

8. ZarMoney: Best for Transparent Pricing

With ZarMoney, there are no secrets about pricing. The company’s website states exactly how much you’ll pay monthly, which is why we chose it as our pick for the best accounting software for transparent pricing. Far too often, it’s hard to determine how much an accounting program will cost, making it difficult to comparison-shop. ZarMoney, by contrast, prides itself on being straightforward, and that’s reflected in the clearly laid-out pricing plans.

9. Plooto: Best for Automating Accounts Payable Processes

Most small businesses are crunched for time, so anything they can automate is welcome. Plooto gives small businesses a whole lot of that for a low price, which is why we selected it as the best accounting software for automating accounts payable processes.

10. Wave Financial: Best Free Option

Wave Financial offers many important, quality accounting features for free. It connects to your bank accounts in real time, and offers payroll and invoicing features and unlimited accountant connections. Those are just a few of the reasons we selected Wave as our pick for the best free accounting software.

11. Sage: Best for Freelancers/Self-Employed

Freelancers and self-employed people need an affordable accounting program that can help them send invoices and get paid. Sage Business Cloud Accounting offers that and much more, making it our pick for the best accounting software for freelancers and the self-employed.

KEY FEATURES OF ACCOUNTING SOFTWARE


There are many aspects of accounting software that help make it a useful tool. As a small business owner, it’s important to know which features to look for. Most online accounting software offers accounts receivable, accounts payable, banking and reporting features. Some programs include inventory management, project management, time tracking and payroll tools.

Here are some of the core features to look for in accounting software:

Bank Feed
This feature connects the software to your business bank and credit card accounts to receive a daily update of your transactions. This saves you time, because you will not have to upload transactions manually. It also gives you a daily, rather than monthly, overview of your accounts. A real-time bank-feed feature can assist with reconciliation, allowing you to make it a small daily task rather than a monthly ordeal.

Dashboard
When you log in to your account, you’ll be greeted by a dashboard that shows you an overview of your account activity and key metrics, such as cash flow, profit and loss, account balances, expenses, accounts payable and receivable, and sales. Some accounting programs allow you to customize what you see first by rearranging the information.

Online Invoicing
If your business sends invoices, the ability to email them and accept online payments helps you get paid faster. Some accounting programs integrate with third-party payment processors; others require you to use their in-house processing services. It’s a plus for accounting software to also serve as an invoice generator.

Recurring Invoices
With this feature, you can schedule the system to automatically generate and send invoices for recurring charges, such as subscriptions. You can choose how frequently invoices are sent – daily, weekly, monthly or annually – and indicate whether there’s an end date to the billing.

Automatic Payment Reminders
This feature helps you remind customers about upcoming and past-due payments. Some have sample email text that you can use as is or customize. You can then choose when you want the reminders to be sent. Some programs give you the option to send thank-you emails to customers after you receive their payments.

Bank Reconciliation
Smart reconciliation tools identify potential matches between your bank transactions and the bills and invoices you’ve entered into the accounting software, saving you the hours it would otherwise take to sift through your bank account for this information. You can then approve or deny the suggested matches. The best applications suggest potential matches as you reconcile your accounts, and a few include a reconciliation tool in their mobile apps.

Financial Reporting
Every accounting program can generate financial reports. But some are more basic than others, and some require you to subscribe to a pricier plan for advanced reporting. If you need specific types of financial reports, you’ll want to make sure they’re included in the software application and plan you choose. Detailed reports can help you interpret your financial data to make informed business decisions.

Mobile Apps
Not all accounting and invoicing programs have mobile apps, but the best ones do. There is, however, quite a range in the capabilities of mobile apps. Some can only capture receipts for expense tracking, some allow you to create and send invoices, and others have almost every feature the web-based software does. It’s worth checking if the software you’re considering offers a mobile app and, if so, what features are included in the app that will help you manage your business while you’re away from the office.

Integrations
The ability to connect your accounting software to other business programs you use saves you valuable time because you don’t have to manually transfer data from one system to another. Payroll, payment processing, POS systems and CRM software are just a few of the popular types of integrations that are available with accounting software. Integration with systems you already use also cuts down on training time for employees who will use the software.

Tracking for Billable Hours
If you’re a consultant or your business bills clients by the hour, you need software that allows you to track and bill your time or that integrates with the time-tracking program you already use. This is an important feature for freelancers.

Inventory Management
If you have a retail, e-commerce or distribution business, you need an application that helps with inventory tracking and purchase orders. You may need to subscribe to a top-tier plan to get this feature. If you need more advanced inventory features, look for software that integrates with a dedicated inventory management system.

Project-Based Billing
Firms, freelancers and consultants who work with clients on projects or jobs should look for accounting software that helps them track their projects’ tasks and budgets. The software should allow you to invoice customers for tracked time and bill them for project expenses.

Support for Multiple Businesses
Several programs we evaluated let you add more than one business to your account, though some companies charge extra for this convenience. Also, the types of accounting tools that are important to you will depend on the specific needs of your business. For example, if you run a small freelance business, project-based billing might be the most important feature on your list. Or, if you plan to do some work on your mobile device, a full-featured mobile app might be at the top of your list.

WHAT BENEFITS OF ACCOUNTING SOFTWARE?


Managing your finances is vital to the success of your business, and choosing the right accounting software can make that a whole lot easier. There are a lot of benefits from swapping out pen and paper or an Excel spreadsheet for accounting software. Here’s a look at a few of them.

Improves organization
Small businesses can’t afford not to have their finances in order. Whether it’s time to pay the tax bill or forecast for the next year, it can be difficult to get the information you need if you are not organized. Accounting software helps you stay on top of your financial data. It organizes financial information, stores it in one location and automates many time-consuming accounting processes, thereby freeing you up to focus on running your business.

Doesn’t break the bank
Thanks to cloud-based offerings, the price of accounting software has come down a lot over the years. Today, small business owners have a lot of choice: Accounting software costs range from free to $350 a month. The size of your business and your accounting needs dictate how much you pay. But if that monthly cost means you’ll optimize cash flow, meet tax obligations and identify growth opportunities, it’s probably worth it.

Ensures best practices
Taxes are part of running a business, and many accounting software vendors are well aware of that. As such, they’ve designed programs that calculate sales tax, prepare tax forms and even file taxes with no intervention on your part.

FAQS

How does accounting software work?

Accounting software records transactions and tracks different accounting metrics. You can set up the software to automatically receive financial information from your bank or use an extremely basic version that might require manually inputting the data. We encourage you to use software that automatically receives financial information from your bank and credit card provider to track your business’s finances. Further, most software solutions store the information in the cloud, so your data will be secure and safe if your computer crashes or you experience other technical issues.

Which small business accounting system is best?

Based on our research, QuickBooks Online is the best small business accounting system. But, depending on the specific needs of your business, another system may be a better fit or better value. For example, if your business provides a service and sends a lot of invoices, FreshBooks might be the best choice for you because of its robust invoicing features. See our best picks above for our specific recommendations for different business sizes and needs.

What do you need from your accounting software?
You need accounting software that tracks the money moving in and out of your business, with both accounts payable and accounts receivable features. Some software solutions don’t include both accounts payable and accounts receivable information. Also, accounting software should connect to your bank and credit card accounts and automatically download your transactions. If your business is service based, you may need project management tools. If your business sells products, you may want an accounting solution that has inventory management features. Last, look for software solutions that offer greater advantages by connecting to other business applications you already use, such as your point-of-sale system, customer relationship management system or email marketing software.

Do you need online bookkeeping software instead of accounting software?

For small businesses, the term “online bookkeeping software” is usually interchangeable with “online accounting software.” (However, there is a difference between bookkeepers and accountants.) The best online accounting programs for small businesses have bookkeeping capabilities that allow you to record debit and credit transactions, as well as accounting features that let you run reports and analyze your business’s financial performance. Look for more than just a bookkeeping solution; accounting software should include more detail and let you generate invoices and detailed reports.

Should your accounting software also act as an invoice generator?

It depends on your business. If you generate (or expect to generate) a lot of invoices to send to clients and customers, we recommend that you find a comprehensive accounting application with invoice-generating features. Freelancers should consider using accounting software that can generate invoices.

What does an online accounting service do?

Online accounting services can perform a wide range of tasks for busy business owners. Some focus on bookkeeping duties, such as entering and categorizing transactions, reconciling accounts, and generating financial statements and reports that you can take to your CPA at tax time. Others provide payroll and tax preparation services. Some – such as virtual controllers, chief financial officers and CPAs – provide high-level accounting services, like internal audits and financial planning and analysis.

How much should a small business plan expect to pay for accounting software?

For some small business owners, an accounting platform that tracks expenses and sends invoices is all that’s needed. For others, advanced reporting, inventory management, and e-commerce are more important. The camp you fall into will dictate how much you pay for accounting software. Some accounting software options are free, while paid versions can cost as much as $25 per month, per user. The total cost of what you spend will be determined by the complexity of the software you choose and how many employees you want to have access to it.

Should small businesses look for certain accounting software attributes?

Small business owners should look for accounting software that is easy to install, simple to use, easily integrates with third-party apps, and provides a bevy of features and functionality including invoicing and inventory management. The best accounting software enables easy collaboration between you and your accountant.

Why should my business consider changing accounting software vendors? 

When it comes to accounting software, changing is easier said than done. After all, you already uploaded all your data into the platform and learned how to operate it. Nonetheless, there are reasons to consider a switch, as painful as it may be. They include:

  • Just like you shop your insurance, you should check out what accounting competitors are offering from time to time. If you find a more affordable vendor that offers the features you need, it may be a reason to consider switching. 
  • If your business grows and your accounting software can no longer support operations, it may be time for an upgrade.
  • A surefire reason to switch accounting software is if your staff hates it. If they find it difficult to use, you may want to pay attention. 
What business processes have been automated with accounting software? 
A big reason to use accounting software is to automate manual processes. That reduces the likelihood of human error and speeds up accounting. In accounting software, automation is ever present. It’s used to extract data from large tax documents, create new journal entries, track payments, send invoices and eliminate manual data entry. 
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