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Sifting through multiple small business accounting systems is time-consuming and quite the headache. And I should know!
As an ex-accountant and small business advocate it’s my job to test out different programs and share my honest findings.
The good news is that I don’t mind putting in the work so you don’t have to. I’m all about working smarter not harder and being able to earn more money in less time.
I’m coming at you with a list of the best small business accounting systems as tried and test by me, and recommended by the community of over 9,000 freelancers here at Careful Cents.
Let’s get started so you can begin tracking your business finances, save money on taxes and get organized!
1. QuickBooks Self-Employed
For the first time on this blog I’m officially naming a QuickBooks product as my #1 choice for the best small business accounting systems. I know, crazy right?!
If you’ve been a reader of this blog for long you know that up until mid-2015 I didn’t really like QuickBooks at all. In fact, I initially advised against using QuickBooks as a freelancer.
But I changed my mind when they came out with QuickBooks Self-Employed, and since then I’ve slowly come around. It’s important to note that I’m NOT a fan of QuickBooks Online or Desktop, only the Self-Employed version.
In the summer of 2016 they announced brand new features that allowed users to manage clients, create invoices and accept payments. As a small business owner you can also track business mileage, calculate quarterly taxes all while separating your business and personal finances.
What does all this cost? $5 per month. Yep, it’s basically a bargain compared to FreshBooks, which starts at $15+ a month.
And the best part is that if you pay for the TurboTax Bundle (which costs $12 per month) you can file your self-employed taxes for free every year. Unreal, I know!
Best QuickBooks Self-Employed features
- Calculate and pay quarterly estimated taxes
- Separate business and personal finances
- Easily track business mileage
- In-depth financial reporting
- Send professional invoices on the go
- Multiple online or in-person payment options
- Great customer service
- Securely syncs with mobile app
- Take pictures of receipts on the go
What is QuickBooks Self-Employed missing?
As of this writing, QBSE does not have any time tracking or calendar integration that allows you to track different projects. This is one stand-out difference between QuickBooks Self-Employed and FreshBooks.
The good news is that you try QuickBooks Self-Employed free for 30 days! Then if you like it, it will only cost you $5 (or $12) per month. You can also cancel anytime without any hassles. I actually cancelled my subscription for a few months and then renewed it once they added the new invoicing features.
Best for: Self-employed freelancers and business owners who need to calculate/pay quarterly taxes
Cost: Free 30-day trial then costs $5 – $12 per month
2. FreshBooks Cloud Accounting
While FreshBooks Cloud Accounting is second on the list, it’s still a favorite here at Careful Cents, and for good reason. Not only has it been part of my small business accounting system since 2012, it’s also a category leader for freelancers and small biz owners.
Fun fact: I took the FreshBooks training course and am a Certified Beancounter!
The software is very easy-to-use and is designed for the freelance lifestyle so it seamlessly syncs with the mobile app. This makes it very convenient for logging expenses, creating invoices and recording payments on the go.
Best FreshBooks features
- Simple time tracking
- Easily create estimates
- In-depth financial reporting
- Multiple payment processing
- Excellent customer service
- Amazing mobile app
- Capability to take pictures of receipts
What is FreshBooks missing?
Obviously the biggest thing that FreshBooks Cloud Accounting lacks is the ability to calculate and pay quarterly taxes. This is likely because the company is based out of Toronto, Canada and doesn’t have the same rules for taxes like we do here in the U.S.
Thankfully though, you can try FreshBooks Cloud Accounting free for 30 days! If you decided to start paying for the service the price starts at $15 per month for your first 5 clients. Then if you decide you don’t like it, you can cancel anytime. There are no strings attached.
Best for: Freelancers and small businesses that are client and customer focused
Cost: Free 30-day trial then costs $15 – $50 per month
3. Xero Accounting
After hearing a ton of buzz about how awesome Xero Accounting is from members of my local Spark Denver group, I decided to try it out for myself. Xero is actually very impressive, so if you have a knack for numbers, this small business accounting system is a great choice.
For one, Xero Accounting is best for the business owner who needs the features of a full-service accounting software but don’t have the funds to hire a CPA. The system offers a complex chart of accounts, financial reports, bank reconciliation and payroll options.
It’s a much more comprehensive small business accounting software versus FreshBooks Cloud Accounting or QuickBooks Self-Employed.
Best Xero Accounting features
- Comprehensive accounting program
- Easily manage multiple business accounts
- Customizable chart of accounts
- Bank reconciliation
- Complex financial reports
- Create and send invoices
- Send quotes
- Payroll processing
- Accepts multiple currencies
What is Xero missing?
Much like QuickBooks Self-Employed, Xero Accounting does not offer any time tracking features for freelancers who work on different client projects. It can also be a bit time-consuming to set up in the beginning as you have to categorize all of your income and expenses before Xero starts functioning properly.
Don’t take my word for it though, you can test out Xero Accounting with their 30-day free trial! If you want to continue using the accounting system, the price starts at just $6 per month for the first 5 invoices and quotes.
Best for: Business owners who prefer DIY accounting and bookkeeping processes
Cost: Free 30-day trial then costs $6 – $70 per month (get 30% off with promo code: XERO30)
4. Wave Accounting
This is another one of the top small business accounting systems that I’ve heard constantly recommended by members of the Careful Cents community. Wave Accounting is a very popular choice for several reasons.
It’s totally free and specifically designed for small businesses with 10 employees or less. It’s consistently one of the top most comprehensive freemium systems for basic accounting needs.
Wave Accounting is an all-inclusive integrated platform designed for small businesses and is used for managing accounting, payroll, invoicing, payments, bills, and other financial processes. It’s a mix between the complexity of Xero and the functionality of FreshBooks (without having to pay a monthly fee!).
One powerful aspect of the Wave Accounting software is that it’s a pay-as-you-go service, so you only pay for what you need. For example, the payroll processing feature costs a monthly fee of $15. And in order to accept credit card payments from clients, you’ll have to pay a processing fee of nearly 3% plus $0.30.
Best Wave Accounting features
- Completely free, pay for features you use
- Personal finance budgeting software
- Etsy shop and PayPal integrations
- Credit card processing
- Simple invoicing features
- Take pictures of receipts
- Payroll processing
- Simple mobile app
What is Wave missing?
Wave is a bit limited by the fact that it focuses on smaller businesses of less than 10 employees. However, this can be a great thing for business owners and one people shops, like freelancers. Another downside is that since Wave’s software is free you do have to deal with in-app ads and other popups for advertisements.
Best for: Etsy or PayPal business owners who prefer to pay-as-you-go
Cost: Completely free, you only pay for services you use (such as payroll, or credit card processing)
5. GoDaddy Bookkeeping
While GoDaddy Bookkeeping is last on this list, it’s still one of my favorites. I use this along side FreshBooks due to the ability to calculate quarterly taxes and export information to my Schedule C during tax time.
I also like the fact that GoDaddy Bookkeeping has the most payment options available to my clients when invoicing for various projects. Clients can choose to pay via direct deposit, PayPal or a credit card.
The mobile app is like none other in that you can see different income sources at-a-glance and types of expense by category. GoDaddy Bookkeeping segments them into colorful graphs and easy-to-read reports. You can track this monthly, quarterly and yearly.
Best GoDaddy Bookkeeping features
- Calculate quarterly taxes
- Schedule C and annual summary
- Record sales tax
- Create project estimates
- Track and record business mileage
- Colorful graphs for income and expenses
- Integrations with Amazon, Etsy, PayPal
- Credit card processing
- Time tracking and calendar integration
- Customizable invoices
- Record pictures of receipts
- Awesome mobile app
What is GoDaddy Bookkeeping missing?
GoDaddy Bookkeeping isn’t really missing much. But there is one small drawback; unlike the other small business accounting systems on this list, it does not offer a free trail for you to test out their service.
On the other hand, (not including Wave) GoDaddy Bookkeeping is the cheapest service coming in at just $3.99 per month.
Best for: Multiple platform integrations (Etsy, Amazon, PayPal) and payment processing options
Cost: $3.99 – $11.99 per month
Which small business accounting system is best?
All five of these accounting programs offer excellent features and are very user-friendly. So how do you know which one is right for you? Obviously this is something that only you can answer, but there are some things to consider when making a decision.
Use this quick checklist of items to help you determine what the best small business accounting software is for your biz!
This is by far the most important aspect to consider when choosing the best small business accounting system. Look at how you run your business and compare this to the list of features for each program.
If you’re big into a clean design, simple invoicing and time tracking, then FreshBooks is by far your best bet. If you need to calculate and pay quarterly taxes, you’ll want to use QuickBooks Self-Employed or GoDaddy Bookkeeping.
Wave and Xero focus more on traditional accounting features such as bank reconciliation, chart of accounts and payroll.
Here are Careful Cents, we’re always conscious about the bottom line so price is a big determining factor when choosing the right small business accounting program. For this, Wave is the top choice since it’s free (although you do have to pay for additional features if you need them later on).
GoDaddy Bookkeeping is in the second spot at just $3.99 per month with QuickBooks Self-Employed following closely at $5 per month. Xero is still relatively budget-friendly at just $6 per month (currently 30% off the regular price) and FreshBooks is the most expensive, costing a whopping $15 per month.
If you’re looking for ways to integrate other apps and services to your accounting system, Xero has the highest number of integrations. It works with over 250 other apps and services, including Google Suite, PayPal, MailChimp, Zapier and lots more.
On the flip side, Wave has a limited number of integrations and therefore is the biggest loser in this category. The other accounting programs fall somewhere in between and offer a wide array of integrations with third-party apps.
Community and customer support
When it comes to customer support and a vast community of business owners, QuickBooks Self-Employed, FreshBooks and Wave are industry leaders. I attend a lot of in-person meetups with small business owners and these three small business accounting systems are always at the top of the list of recommendations.
FreshBooks Cloud Accounting has online web help as well as a simple-to-find number for phone support. Xero and Wave only offer web-based help but it’s better than nothing.
Both GoDaddy Bookkeeping and QuickBooks Self-Employed have an in-depth knowledge base and community forums if you want to figure out the answers yourself.
In this tech-based age it’s more important than ever to create a portable office that travels with you. And this means utilizing a mobile app that seamlessly syncs with the desktop version of your accounting software.
This is where QuickBooks Self-Employed, FreshBooks and GoDaddy Bookkeeping all shine. Each of these mobile apps is intuitive, easy-to-navigate and offers a wide variety of financial features while on the go.
Xero and Wave lag behind a little in the category since the mobile apps can be buggy and don’t offer the same amount of features compared to three listed above.
What does Careful Cents recommend?
My top choices for all-time best accounting software for small business owners and freelancers are:
These tick most of the boxes as far as features, community, integrations, mobility and price!
You may consider using (or at least testing out) two different accounting programs at once, since none of these perform everything perfectly. As an ex-bookkeeper I find that paying for two programs allows me to get the absolute most out of the accounting and bookkeeping features for my business.
But don’t take my word for it — you can test out each one of these programs free for 30 days (with the exception of GoDaddy Bookkeeping). This will ensure you choose the right software that will grow and expand as your small business does.
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