Top Accounting Software for Small Business: 2024's Comprehensive Guide

2024 guide to accounting software for small businesses

James Robson

If you’re a small business owner asking, ‘How can I manage my finances more efficiently without overspending on resources?’, the answer lies in finding the right accounts software for small business. Our guide zeroes in on top solutions that offer simplicity, cost effectiveness, and the flexibility necessary for your growing business needs - without any fluff.

Key Takeaways

  • Small business accounting software simplifies financial processes, reduces bookkeeping costs, and provides valuable business insights, with features like enhanced data protection, easy tax navigation, and efficient transaction tracking tailored to various business needs.
  • Critical features of top accounting software include a user-friendly interface, customisable reporting, seamless third-party integrations, and scalability to accommodate business growth, which collectively contribute to streamlined operations and data security.
  • The top accounting software solutions for small businesses include FreshBooks, QuickBooks, Xero, Zoho Books, and Wave, each offering unique capabilities to cater to diverse business requirements, integration preferences, and financial management needs.

Understanding Small Business Accounting Software

Small business accounting software, also known as accounting software for small businesses, is a digital magic wand that streamlines your financial operations. This online application or program, equipped with small business accounting tools, is designed specifically for small business owners to manage finances efficiently without requiring an accountant or bookkeeper on staff. With the help of small business accounting professionals, the goal is simple: to measure, process, and share financial information, thus aiding in better business decision-making.

The beauty of these tools lies in their ability to streamline data entry. By requiring information to be entered only once, they ensure simplicity and accuracy. This not only significantly reduces the time and cost associated with traditional bookkeeping but also provides valuable business insights. Plus, with features like data encryption and access controls, your financial data enjoys enhanced protection.

Efficient tracking of transactions, smooth budget planning, and easy navigation through tax times hinge on choosing the best accounting software. This choice should be based on the unique needs and growth of your business. Whether you require specific tools or an all-in-one accounting software package, rest assured there’s a solution out there for you.

Key Features to Look for in Accounting Software

When considering accounting software, look for the following features:

  • User-friendly interface
  • Customisable reporting
  • Ability to integrate with other applications
  • Scalability

Knowing what to look for in accounting software can be the difference between making a smart investment and getting lost in the sea of options.

It’s worth exploring the significance of these features in detail.

User-Friendly Interface

A user-friendly interface is the cornerstone of any good small business accounting software. It should incorporate error-prevention features such as automatic calculations to minimise mistakes, catering to administrative staff who may not be financial specialists. Platforms like QuickBooks, FreshBooks, and Zoho Books are known for their intuitive interfaces that make the software easy to use, even for beginners.

Intuitive interfaces reduce the learning curve, permitting small business owners to concentrate on managing their businesses. This is particularly beneficial for users without extensive accounting knowledge. For example, Wave’s simple interface is a game-changer for those new to the accounting world.

Some user-friendly online accounting software options, including cloud based accounting software and free accounting software, are:

  • FreshBooks: offers a user-friendly interface, free from jargon, with a focus on invoicing and expense tracking
  • Wave: highlighted for its easy-to-use interface, enhancing the user experience
  • Truly Small Accounting: also known for its easy-to-use interface, making accounting a breeze

These options make accounting more accessible and beginner-friendly, offering essential accounting features.

Customisable Reporting

Customisable reporting is another significant feature of accounting software. It allows businesses to create financial reports tailored to their unique requirements, providing precise insight into business health and supporting better business decisions.

Automated real-time financial insights and analysis are crucial for informed decision-making. The availability of easy-to-understand reports and dashboards enhances internal communication by presenting financial data in formats accessible to team members without a financial background.

Platforms like Xero and Zoho Books demonstrate the versatility of customisable reporting. Xero’s advanced reporting abilities provide customised short-term cash flow projections and sophisticated financial snapshots. On the other hand, Zoho Books offers a broad spectrum of customisable reports which can be scheduled, shared, and tailored to various business needs, showcasing the flexibility and depth of reporting capabilities available.

Integration Capabilities

Integration capabilities are a crucial aspect of small business accounting software. Leading accounting software solutions offer integrations with a wide range of external applications and services such as:

  • PayPal
  • MailChimp
  • Basecamp
  • WordPress
  • Gusto
  • Zendesk

These integrations facilitate a unified business view and streamline processes.

QuickBooks, for example, stands out for small businesses not only for its scalability but also for its ability to integrate with a breadth of third-party applications. Some advantages of QuickBooks include:

  • Integration with online banking and e-filing services
  • Centralisation of financial data, providing a complete overview of a business’s financial health
  • Real-time insights into sales and customer behaviours

These features make QuickBooks a powerful tool for small businesses.

Specific integrations, such as that between Xero and Gusto, allow small businesses to enhance their functionality by adding services like payroll directly within their accounting software ecosystem. This demonstrates how integration capabilities can significantly increase the value and utility of your accounting software.

Scalability and Flexibility

Scalability and flexibility are two defining features of a robust accounting software solution. Scalable accounting software grows with the business, accommodating increased data volumes and complex financial transactions seamlessly. This eliminates the need to hire additional staff to manage the financial workload as the business expands, thereby providing cost savings.

Effective accounting software includes:

  • Multi-location management capabilities
  • Multi-currency support
  • Automation of repetitive tasks
  • Tools for creating cash flow forecasts
  • Invoice management
  • Compatibility with other accounting software

These features facilitate effective financial management and ensure accurate financial records across different regions and currencies.

Top 5 Accounting Software Solutions for Small Businesses

Comparison of accounting software logos

Having explored the key features to consider in accounting software, let’s now turn our attention to some of the top players in the market. Our comprehensive research and analysis have identified five leading accounting software solutions that stand out for their features, usability, and customer satisfaction:

  • FreshBooks
  • QuickBooks
  • Xero
  • Zoho Books
  • Wave


Invoicing with FreshBooks

FreshBooks makes it to our list of top software solutions with its:

  • User-friendly interface
  • Superior invoicing tools
  • Ability to send proposals
  • Time tracking on projects
  • Payment receiving capabilities

Its simplicity and user-friendly interface make it a top choice for service-based businesses looking for a cloud based software solution.

FreshBooks provides the following features:

  • Comprehensive project tracking and profitability calculation
  • Various forms including invoices, estimates, and Checkout Links for online payments
  • Four plans that cater to different business sizes and needs, each equipped with essentials like unlimited income and expense tracking and tax summaries

If you’re exploring FreshBooks, you can avail of its 30-day free trial to experience its features risk-free before committing to a subscription.

FreshBooks is praised for its engaging setup process that customises the user experience based on initial information and encourages the setup of online bank connections. This thoughtful approach to user onboarding serves as a testament to FreshBooks’ commitment to delivering a seamless user experience.


QuickBooks tax planning feature

In the world of small business accounting software, QuickBooks is a household name. Known for its intuitive platform, great value plans, and tax planning features, QuickBooks offers cloud-based accounting solutions that are accessible and affordable,.

With five subscription tiers available for businesses of different sizes and requirements, QuickBooks’ pricing is strategic, offering regular discounts and a half-price deal for the first six months on certain plans. For those wanting to test the waters before diving in, QuickBooks extends a 30-day free trial to allow potential customers to experience its features risk-free before committing to a subscription.

QuickBooks is recognised for offering simple, smart solutions suitable for business growth, without hidden fees, cementing its position as a comprehensive choice for small businesses. Its high customer satisfaction rating, with a score of 4.6 out of 5 on Trustpilot, is a testament to its quality and reliability.


In the small business accounting software market, Xero also emerges as a top contender. Best suited for businesses where multiple people need access to the accounting software and powerful reporting tools are required, Xero supports unlimited users at no extra cost and offers exceptional reports and advanced analytics,.

Xero’s pricing includes a low-cost Early plan with limits such as sending only five invoices, entering five bills, or reconciling 20 bank transactions. However, a basic plan is also available for more extensive invoicing and transactions. Potential users can explore Xero’s features through a 30-day free trial before making a purchase decision.

Xero enhances business insights with:

  • Visual representations of business health
  • Short-term cash flow projections
  • Upgradability to Xero Analytics Plus for further advanced analytical capabilities
  • Facilitation of integration with other tools

This robust feature set and flexibility make Xero a popular choice among 1.8 million subscribers globally.

Zoho Books

Zoho Books is designed for larger small businesses, growing companies, and established businesses that require in-depth bookkeeping capabilities as well as project tracking and CRM tools. Zoho Books offers seamless integration with other Zoho applications and additionally offers third-party app integrations, enhancing usability for businesses deeply invested in the Zoho ecosystem.

Zoho Books’ pricing structure caters to a wide range of businesses. Its plans include a robust free offering, a competitively priced monthly Professional Plan, and features scaling up to 5,000 invoices per annum even on the free version. This versatility makes Zoho Books a flexible choice for businesses of different sizes and requirements.

Zoho Books is also Making Tax Digital compatible, which is essential for UK-based businesses. It offers a toolset that enables managing financial activities efficiently from various devices, making it a convenient and compliant choice for small businesses.


Wave accounting software is an ideal choice for freelancers or very small businesses, especially those with fewer than 500 transactions per year. Wave offers a free version that includes features such as:

  • unlimited invoicing
  • estimates
  • contact management
  • expense tracking
  • reporting

This makes it an excellent choice for businesses on a tight budget.

However, it’s important to note that while most of Wave’s features are free, services such as payroll and credit card processing come with additional costs. Despite these limitations, Wave is praised for its simple navigation and intuitive user experience, making it a popular choice for freelancers and very small businesses.

Transitioning from Manual to Automated Accounting

Transitioning to automated accounting

Transitioning from manual to automated accounting can seem daunting, but with the right approach, it can be a smooth and rewarding process. The first step in a successful transition is setting objectives. These should include:

  • Efficiency improvements
  • Error reduction
  • Minimising manual tasks
  • Enabling real-time financial data accessibility

The actual transition process involves a series of steps. Here is a step-by-step guide to help you through the process:

  1. Compile a Trial Balance and Balance Sheet from the old system for comparison post-migration.
  2. Ensure all recent accounting data is backed up to avoid loss during conversion.
  3. Create a pre-migration checklist and schedule a conversion date to reduce transitional disruption.
  4. Data from the old system should be converted to a common format such as Excel or CSV for easier import into the new software.

Following these steps will help ensure a smooth transition to the new accounting software.

The final steps include:

  • Developing a data map to align old system data points with the new accounting software structure
  • Ensuring data integrity during the last manual task of financial data migration before full automation
  • Performing tests on imported data to confirm accuracy and integrality within the new automated system
  • Providing a proper onboarding experience to familiarise users with the new system and explain the migration of their data.

Common Challenges and Solutions in Small Business Accounting

Small business accounting, like any area of business, presents its own unique challenges. However, with a structured approach and the right tools, these hurdles can be overcome. One common challenge is inconsistent cash flows. To overcome this challenge, you can:

  • Adopt a structured budget that includes all types of costs
  • Create a cash flow forecast to anticipate and plan for future cash flows
  • Establish a rainy day fund to safeguard against inconsistent cash flows

By following these steps, businesses can establish financial control and mitigate the impact of inconsistent cash flows.

Understanding financial documentation and credit scores is critical for small businesses seeking capital. Managing debt levels can be achieved through cost reduction strategies and potentially debt consolidation. Accounting software aids in tax compliance and auditing by automating data entry, reducing error risks, enabling custom report generation, and maintaining a repository for accurate records.

Small business owners may also encounter challenges with accounting software itself, such as bank connection issues, missing transactions, or difficulties in invoice delivery to customers. These issues can be mitigated by leveraging software features like automated accounts payable and segregation of personal and business finances to ensure timely payments and clear financial boundaries.


In conclusion, small business accounting software is a powerful tool that can transform your business’s financial management. From streamlining financial processes to providing valuable business insights, these digital solutions offer a host of benefits. Whether it’s FreshBooks with its user-friendly interface, QuickBooks with its tax planning features, Xero with its powerful reporting tools, Zoho Books with its in-depth bookkeeping capabilities, or Wave with its free software solution, there’s a solution out there to meet your unique business needs. Remember, the key to a successful transition from manual to automated accounting is planning, data migration, and proper onboarding. With the right accounting software, you can overcome common accounting challenges and take your business to new financial heights.

Frequently Asked Questions

What is the best accounting software for new small business?

For new small businesses, FreeAgent or Xero are great choices for their simple accounting features, payroll, multi-currency support, and user-friendly interfaces. Both options cater to different business needs, so you can choose based on your specific priorities.

What software do small accounting firms use?

Small accounting firms often use software like Accountancy Manager, Onvio, IRIS suite, Xero, Clear Books, and Zoho, with QuickBooks Online being a popular choice due to its wide usage and online support resources. Ultimately, it's important to consider your firm's specific needs when choosing accounting software.

Do you need accounting software for a small business?

Yes, accounting software makes life easier for small business owners by helping to budget, track expenses, pay suppliers, categorise transactions, and keep detailed, accurate books. It can prevent the workload from becoming overwhelming.

What are some key features to look for in accounting software?

When choosing accounting software, look for a user-friendly interface, customisable reporting, integration capabilities, and scalability to meet your business needs. These features make the software efficient and flexible for your accounting processes.

What steps should I take when transitioning from manual to automated accounting?

When transitioning from manual to automated accounting, you should set objectives, compile financial statements from the old system, back up accounting data, create a pre-migration checklist, convert data to a common format, develop a data map, ensure data integrity, perform tests on imported data, and provide proper onboarding for the new system. These steps will help ensure a smooth and successful transition.

Former lawyer, now building the future of SME finance.