6 Best Financial Software for Small Businesses in 2021
Warren Buffet once said, “Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.” When you are running a business, keeping a track of your company’s financial health can become pretty challenging. Moreover, tracking down how your company is making profits and where it is losing money is very important to ensure long-term financial success and stability.
As the world continues to head towards digitalization and automation, the finance sector is not lagging behind. Small businesses have embraced accounting and financial software solutions with open arms over the past few years due to their time-saving and productivity benefits.
Besides, the best finance software for small businesses provides critical insights into a company’s income and expenses while simultaneously tracking finances.
Today, around 60% of small business owners believe that they do not have sufficient accounting knowledge [1]. This could be the reason why around 65% of small businesses use accounting software to manage their finances [2].
To help you understand and pick the best small business financial management software, we have researched more than a dozen applications, before picking the top six. We have added these tools based on their features, functionality, pricing, and more.
SEE ALSO: Why Businesses Get Audited and How These Tools Can Help!
Best Finance Software for Small Businesses
- QuickBooks®Online
- Zoho Books
- Xero
- Freshbooks
- Wave
- Sage Business Cloud
1. Quickbooks Online
Quickbooks Online is considered to be one of the best accounting software for small businesses. It comes with an array of accounting features that are extremely easy to use. The software is perfect for businesses with around five users or less. If you wish to add more users, you will have to pay an additional cost.
The platform can be integrated with more than 600 third-party applications, mobile, and tax support apps, making it one of the most popular accounting software for small businesses. It is a cloud-based software which means that users can access it via a mobile application or a web browser.
Pros:
- 600+ integrations
- Scalability
- Invoicing feature
- Preferred by financial and accounting professionals
Cons:
- Customer support
- Unintuitive at times
- Requires additional cost and upgrade to add more users
- Syncing issues with credit cards and banks
Pricing
The vendor offers four main pricing plans starting from $ 25/month. It comes as no surprise that the larger the plan, the more features can be accessed.
Features overview
When it comes to ease of use, the cloud accounting software may not rank high on the list. However, its cutting-edge features make up for that.
Features:
- Double-entry bookkeeping
- Bank reconciliation
- Expense tracking
- Invoicing
- Project management
- Client portal
- Contact management
- Inventory management
- Sales tax
No other accounting software on this list can compete with Quickbooks when it comes to integrations. With more than 600 integrations, Quickbooks offers more integrations than any accounting platform.
In the past, Quickbooks has received some flak for its customer service. More recently, it has made considerable improvements in this area by redesigning its help center and quicker response times.
ToolsMetric verdict
Despite leaving plenty of room for improvement when it comes to ease of use and customer service, Quickbooks Online is value for money due to its range of advanced features.
Read our in-depth Quickbooks Online review to learn more about the platform.
2. Zoho Books
Zoho Books is another accounting solution that provides great value for money. It is a perfect fit for small businesses that are looking for a robust and affordable accounting system.
Zoho’s invoicing and mobile application is easily miles ahead of other vendors mentioned in this list. Furthermore, the recent changes and updates have pushed Zoho Books up the ladder and closer to QuickBooks Online in terms of features.
When it comes to user-friendliness, pricing, and customer service, Zoho Books is one of the best accounting software for small businesses.
Pros:
- Pricing
- Ease-of-use
- Customer support
- User-friendly UI
Cons;
- Integrations are limited
- Payroll management is not available
- Not a great accounting software for large businesses
Pricing
Zoho offers three different pricing options that range from $9 per month to $29 per month. While all options provide unlimited invoices and basic features, the larger plans come with advanced features, more users, and contacts.
Features overview
Zoho Books is packed with plenty of powerful features. The world-class customer service along with the user-friendly UI makes it one of the easiest accounting solutions to use and learn.
Features:
- Contact management
- Expense tracking
- Time tracking
- Project management
- Tax support
- Fixed asset management
- Reports
Zoho Books can be integrated with more than 30 applications. The Zapier integration allows users to sync and connect Zoho to more than 1,000 third-party applications.
Zoho thrives due to its unbeatable customer service and the positive user reviews are a testament to that. Users can get immediate assistance via phone or email.
ToolsMetric verdict
In terms of features, Zoho Books has come very close to QuickBooks Online especially after the recent updates. The unmatched invoicing feature along with ease of use make it a very strong contender.
Read our Zoho Books review to know more about how it can cater to the accounting needs of your firm.
3. Xero
Xero is specially designed for scaling and small businesses and widely used by small business owners, bookkeepers, and accountants. Xero is regarded as one of the easiest tools to set up and use.
Since Xero is a cloud-based accounting solution, it offers an iPhone and Android app that can be accessed from any location. Xero banks on its easy-to-read dashboards that can be used to collaborate with different team members, accountants, and employees.
The two-step authentication ensures optimum data security and also makes Xero reliable accounting software for small businesses.
Pros
- Cloud-based
- Inventory management
- Mobile application
- Payroll integration with Gusto
Cons
- Customer service is limited
- Reporting
Pricing
Xero offers three main pricing plans. Each plan offers a free 30-day trial without any limit on the number of users. While the basic plan (Early) starts from $ 4.50 per month, the larger plan (Established) costs around $ 60 per month.
Needless to say that larger plans offer more features and can be accessed by more users.
Features overview:
Apart from offering standard accounting software features, Xero offers plenty of additional features such as a Hubdoc wherein users can capture bills, receipts, and also track project costs.
Features:
- Invoicing
- Expense claims
- Real-time cash position
- Financial reporting
- Bank reconciliation
- Data protection
- Collaboration with team members
ToolsMetric verdict
If you are looking for a finance software demo before you make a decision, as a small business owner, Xero should make it to your list. Besides, the platform also provides additional features apart from the standard set of solutions, which is why we consider it one of the best finance solutions available in the market.
4. FreshBooks
FreshBooks is for businesses that place simplicity high on their checklist. Apart from being one of the most simple-to-use financial solutions, its strong invoicing, spotless customer support, and proposals make it an instant hit among small businesses.
Prior to the recent update, FreshBooks was an invoicing software that featured some basic bookkeeping tools as well. The addition of double-entry accounting makes it one of the most well-rounded accounting software for small businesses.
Pros:
- Extremely easy to use
- Customer support
- Invoicing
- Mobile application
Cons:
- Pricing
- Limit to users
- Fewer features in comparison to other tools in the list
Pricing
The software provider offers three main pricing plans that start from $15/month. Almost all features are included in all the plans. One of the drawbacks of this platform is that it supports only a single user. If you wish to add more users, you need to pay $10/month per user.
Features overview:
Since its launch, FreshBooks has ranked well when it comes to ease of use. The recent update takes the user experience to a whole new level with an even more attractive user interface (UI).
Freshbooks is easy to set up and the learning curve is not as steep as some of the other tools mentioned in this article. One feature that really stands out is the chat feature that allows users to directly interact with their customers.
Features:
- Project management
- Reports
- Time tracking
- Invoicing
- Expenses
- Time tracking
- Reports
5. Wave
Wave is a cloud-based and one of the best financial accounting software for small businesses. Although it is primarily used for invoicing and accounting, Wave also provides payroll and credit card processing services.
The best part about Wave is that it can be used by business owners who do not have any bookkeeping and accounting experience. The tool allows you to sync bank accounts with all your expenses.
It is also considered as one of the best value accounting software for small businesses as Wave does not charge for its invoicing and accounting services. Although the aforementioned services are free, credit card processing and payroll services are chargeable.
Despite some drawbacks associated with the free features, Wave is a perfect accounting tool for startups and new businesses.
Pros:
- Accounting and invoicing is free
- Mobile application
- No billing or transaction limits
Cons:
- Third-party integrations are limited
- Does not have the inventory management feature
Pricing
Accounting, receipt scanning, and invoicing are absolutely free without any hidden costs. Wave earns revenue from its payroll and credit card processing features.
Features:
- Pricing
- Invoice templates
- Invoicing
- Accounting
- Receipt management
- Recurring billing
Read our Wave review to learn more about how it can cater to your firm’s accounting needs.
6. Sage Business Cloud Accounting
Sage Business Cloud Accounting was formerly known as Sage One. It provides online business and accounting services for small businesses. The most striking feature of this tool is that it adjusts with your company size, industry, and other requirements. Another advantage of using this tool is that it can be used by multiple users without any additional costs.
Sage’s reputation and strong brand presence is a major reason why it makes it to our list of the best finance software for small businesses.
Pros:
- Collaborative workflows
- Ease of use for users without any tech experience
- Expense management
- Payroll integration
Cons:
- Project-level expense management
- API documentation
- Report customizations
Pricing
Sage Business Cloud Accounting offers two pricing tiers i.e., Accounting Start (starts from $10/month) and Accounting (starts from $25/month).
Both these pricing plans offer a free trial.
Features
The platform offers all the important features a user desires in finance software.
- Payroll management
- Tax compliance tools
- Invoicing
- Cash flow management
- Inventory management
- Dashboard
- Human resource management and estimating add-ons
- Payments
Finance Software for Small Business FAQs
As a business owner, do I need an accounting solution for my small business?
In today’s competitive business landscape, every company, big or small is looking for new ways to manage its finances. The best way to address your accounting needs is by investing in accounting software.
Which is the best finance software for small businesses?
All the software solutions listed in this article are among the best accounting software for small businesses. However, if we had to pick one, we would go with QuickBooks Online as it ticks off all the boxes such as features, integrations, price, scalability, etc.
How do I choose the right finance software for my business?
You can start by creating a list of features that you are interested in. Secondly, fix a budget and conduct basic research on the internet. We understand that evaluating different tools can take a lot of time, which is why we do that for you.
To understand which accounting software is a perfect match for your business requirements, you can read our tool reviews of some of the top accounting software for small businesses.
SEE ALSO: The Best Financial Reporting Tools You Should Invest In
Image Source: rawpixel.com
Image 1 Source: Zoho
Image 2 Source: Xero
Image 3 Source: FreshBooks
Image 4 Source: Wave
Sources:
[1][2] (2021) “37 Amazing Accounting Statistics Showing the Power of Numbers [2021]” GOremotely [online] Available from: https://goremotely.net/blog/accounting-statistics/ [accessed May 2021]
