Software for Accounting: What It Is and How To Choose It

Keeping a tight grip on finances is critical for the success of small businesses and freelancers. We tested and rated small business accounting tools to find the best and help keep your company in the black.

TOP 5 Accounting Software For Small Businesses 2022 – Quickbooks vs xero vs freshbooks vs wave

What is accounting software used for?

Most accounting software examples offer a range of functions designed to meet the basic accounting needs of several different types of businesses. A few of the most common features of accounting software include:

Some specific accounting software programs offer additional features. Custom-made accounting software can include or not include any of these features and others, based on the specific needs of the organization for which its made.

What is accounting software?

Accounting software is specific computer programming designed for managing common accounting procedures. Accountants, bookkeepers and other employees who handle financial responsibilities for a company are most likely to use accounting software.

Most companies use a general type of accounting software designed to meet the needs of a multitude of industries and companies. Some businesses, particularly large corporations, have their own proprietary accounting software made specifically for their organization.

Benefits of accounting software

Using software for accounting is highly beneficial for most organizations. Consider these common advantages when considering whether to get accounting software for your department and which kind:

Best accounting software

While every business may have different needs and requirements for their accounting software, these 10 programs are highly rated by experts in the field and by business owners:

Intuit QuickBooks

Intuits QuickBooks accounting software is a long-time favorite. You can use it in either a traditional, downloadable version or a fully online, cloud-based version. Its affordably priced and includes several highly sought-after features, like task automation, report building, automatic back-ups and electronic invoicing.

Workday Financial Management

Workday Financial Management gives business owners a clear overview of their organizations financial health and future. Its fully cloud-based and gives users basic functionality options like invoicing and expense tracking alongside advanced features like fixed asset management, payroll management and tax management.

Accounting by Wave

Waves Accounting platform is a top contender due to its appealing cost—its free. While some actions do require payment, Wave is a great choice for small businesses looking for basic accounting software at a low cost. A few of Waves best features include project accounting, fund management and invoicing.

FreshBooks Accounting Software

FreshBooks combines optimized accounting and invoicing in one program. Users love that customers can pay their invoices directly online through FreshBooks software. Other features of note for this cloud-based platform include the mobile application, expense tracking and user role assignment options.

Zoho Books

Zoho Books is a fantastic accounting software option for very small businesses. Its priced specifically for small organizations and provides a number of great accounting features, including scalability, should the company grow larger, contact tracking and billable hours tracking.

Xero

Xero is an excellent accounting software choice for those companies who know theyre going to see change and growth in the near future. Its a highly flexible and intuitive program with features like invoicing, mobile access, inventory and bank reconciliation.

Sage 50cloud

Sage 50cloud is a downloadable desktop accounting software program that is highly customizable for your business. While its mainly a desktop application, it does have cloud computing capabilities. A few of Sages top features include its inventory management tools, scalability and strong support options.

GoDaddy Bookkeeping

GoDaddys Bookkeeping program is a fantastic choice for entrepreneurs or other companies that use big-name platforms like Amazon or eBay to sell their goods. Some of the best features of GoDaddy Bookkeeping include its low price point, easy-to-read dashboard and tax tracking and estimation.

Sunrise by Lendio

Lendios Sunrise accounting software is easy to use and great for freelancers or sole proprietors who need accounting guidance and assistance. A few of the best features of Sunrise include its free price tag, easy-to-use sales forms and integration with other common business software programs.

Kashoo

Kashoo is a cost-effective accounting software tool, primarily marketed to small businesses. It offers users valuable features like project cost tracking, income and expense management and free user support through email, phone and chat.

How to choose the best accounting software for your business

If youre looking to select an accounting software program for your organization, follow these steps to ensure you purchase the best one for your company:

1. Find free trials

One of the best ways to discover if an accounting software program is right for you and your organization is to use a free trial. This way, you can see in real-time if the program supports your needs without committing to any expenditures.

2. Consider ease of use

Think about who in your organization will primarily use the software. Ease of use can ensure that the program gets used appropriately and that you and company leaders have the necessary information to make informed financial business decisions.

3. Look for multiuser functionality

Some companies want multiple people working on the businesss accounting software. If youll have multiple employees taking control of the organizations finances, ensure the software allows for multiple accounts and users.

4. Find automation

Many accounting software programs automate some basic tasks, saving the accounting or bookkeeping staff time. If this is an important feature for you, ensure the software you select has automation capabilities.

5. Ask about support

Technical support is an important feature for most companies. Make sure the program you select offers technical support thats easy to access and included as part of your contract to ensure you quickly solve any problems you might encounter.

6. Check the security

Data security is necessary for accounting software since most programs require information like bank account numbers and tax information. Check the security offerings included with the software youre considering to make sure it meets your needs.

7. Know if its scalable

If you expect your organization to grow in size or change in function in the short or long term, its best to invest in an accounting software program that is easy to scale up as your business grows and changes.

8. Have a price point

Know how much you want to spend upfront on accounting software and each month for certain features. Look exclusively at accounting software programs within your set range to ensure you maintain your budget.

FAQ

What is the meaning of software accounting?

Accounting software manages and records the day-to-day financial transactions of an organization, including fixed asset management, expense management, revenue management, accounts receivable, accounts payable, subledger accounting, and reporting and analytics.

What is an example of accounting software?

Quickbooks India

Quickbooks is one of the leading accounting softwares in the US and other countries.

Which software is best for accounting?

The 5 Best Accounting Software for Small Business of 2022
  • Best Overall: QuickBooks Online.
  • Best for Micro-Business Owners: Xero.
  • Best for Service-Based Businesses: FreshBooks.
  • Best for Part-Time Freelancers: QuickBooks Self-Employed.
  • Best Free Software: Wave.

What are the three types of accounting software?

Types of Accounting Software
  • Billing/ Invoicing Software. Accounting software in the operational field of invoicing/billing takes care of companies’ basic billing activities. …
  • Payroll management system. …
  • ERP Systems.

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