Online billing and invoicing software reviews

Accounting software plays a critical role in keeping your business financially sound. The best accounting software fits within your budget, is easy to use and integrates with other programs and applications you are already using. To help you sift through hundreds of options, we checked out all of the top accounting software solutions. We pored over their features, prices, fees and reputations to come up with our list of the 11 best options for various types of businesses.

What Is Accounting Software?

Accounting software is a digital system that helps you manage your money. Overseeing your business finances is very different from managing your personal finances and requires different actions. Accounting software records and analyzes your company’s financial data. It also tracks transactions, generates reports, manages customer and vendor contacts, creates purchase orders, tracks inventory levels, bills customers and monitors account balances. Accounting software helps you put your financial data into a structured system and understand how your company is doing.

How We Decided

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How We Decided

Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.

Compare Our Best Picks

Xero: Best Accounting Software for Growing Businesses

• Xero offers more than 1,000 app integrations.
• Email and live chat support are available 24/7.
• Not all accountants are familiar with Xero.

Intuit QuickBooks Online: Best Accounting Software for Small Businesses

• QuickBooks Online has valuable accounting software features, including professional invoicing, expense tracking and cash flow management.
• QuickBooks Live Bookkeeper connects you to accountants when you need expert help.
• You can’t upgrade from the Self-Employed plan. If you think your business will grow, you may want to choose the Simple Start, Plus or Advanced plan.

Oracle NetSuite Accounting Software: Best Accounting Software ERP Tools

• Oracle NetSuite’s feature-rich accounting software also offers enterprise resource planning (ERP) functionality.
• The accounts receivable (A/R) system automates the delivery and collection of invoices while the accounts payable (A/P) solutions automate payments.
• You must contact a sales representative to learn how much the software will cost your company.

FreshBooks Accounting Software: Best Accounting Software for Invoicing

• You can create professional invoices, allow customers to pay invoices online and send automatic bill reminders.
• Accounting features include time and expense tracking as well as automated bank and credit card entries.
• FreshBooks can get pricey if you want to add several team members to your account.

Zoho Books: Best Accounting Software for Process Automation

• Zoho Books is available on iOS and Android devices, allowing you to accomplish accounting tasks from anywhere.
• You can track bills, manage vendor credits and add reporting tags to transactions.
• The highest tier limits you to 100,000 transactions per month.

Melio: Best Accounting Software for Bill Management

Melio

• Melio doesn’t charge any fees for bank transfers.
• You can pay over 7,000 vendors directly with Melio.
• While its website is mobile-friendly, Melio does not have a stand-alone mobile app for iOS or Android.

ZarMoney: Best Accounting Software for Report Generation

ZarMoney

• ZarMoney offers over 40 built-in reports.
• The software connects with more than 9,600 banks in the United States and Canada.
• Some cash-basis reports are not available.

Plooto: Best Accounting Software for Payments

Plooto

• Plooto unifies payments, approvals, reconciliation and reporting, and you can automate your A/P and A/R.
• You can add a vendor or supplier payee in seconds via the Plooto Network.
• It syncs with QuickBooks and Xero only.

Wave Financial: Best Free Accounting Software

Wave Financial

• Wave can link to your bank and credit card accounts to track your transactions automatically.
• It offers standard bookkeeping services.
• Compared to other accounting software selections, Wave’s app integrations are limited.

Sage Business Cloud Accounting: Best Accounting Software for Customization

Sage Business Cloud Accounting

• Sage doesn’t limit the number of users who can access the software.
• It has 24/7 support, including live chat with Sage accounting experts and one-on-one sessions.
• You can accept payments via invoices only through Sage’s integration with Stripe.

Neat Accounting Software: Best Accounting Software for Document Scanning

Neat Accounting Software

• Neat offers extensive text-parsing and document-scanning features.
• It includes standard bookkeeping and invoicing abilities.
• Neat is more expensive than some alternatives.

Accounting Software Pricing

Most accounting software programs have an array of plans to fit your business’s needs and budget. The plans typically differ in price, features and number of users who can access the software.

A subscription pricing model, which has become the industry standard, bills you monthly or annually for services. With this model, you have access to all the software’s updates as soon as they are released. Depending on the service plan you choose, subscription prices range from $5 to $60 per month.

Be wary of hidden fees, though. They lurk in things such as accepting payments online, software integrations and technical support services. To avoid overpaying for features you don’t need, make a list of what you’re looking for in an accounting system. As with grocery shopping, creating a list will prevent you from overspending.

Some accounting programs are free, such as Wave. When searching for accounting software, take advantage of free trials and demos. This will help you see how easy the software is to use and how well suited it is for your company.

Types of Accounting Software for Business

Accounting software comes in different flavors, from spreadsheets to cloud software. What makes the most sense for your business depends on the size of your operation, the complexity of your accounting and what you are hoping to achieve.

Spreadsheets

Made popular by Microsoft and Google, spreadsheets are digital documents that are used to arrange data in rows and columns. You can apply calculations and move around data with spreadsheets. Spreadsheets are a cheap option, popular with many microbusinesses and sole proprietors. However, if you want to do more than keep data organized and categorized logically, you may want to consider accounting software.

Learn more about the best spreadsheet software in our 2023 buying guide.

Commercial Accounting Software

Designed with small and midsize businesses in mind, commercial accounting software enables you to manage your books, send invoices, accept payments and perform other business functions. Examples of commercial accounting software include QuickBooks, FreshBooks and Xero. The vendors typically charge monthly fees to access their accounting software in the cloud.

Enterprise Accounting Software

Large companies have more complex needs. Enterprise accounting software is designed for large businesses and typically integrates different aspects of a business in one central location.

Custom Accounting Software

Although it isn’t very common, some vendors create custom accounting software for their clients. Alternatively, a company can create its own custom accounting program if it can’t find something suitable on the market. This can be costly and isn’t the best option for many small businesses.

Key Features of Accounting Software

There are many aspects of accounting software that make it a useful tool. Most online accounting programs offer A/R, A/P, banking and reporting features. Some even include tools for inventory management, project management, time tracking and payroll. Here are some core elements of accounting software you should look for.

Bank Feed

This feature allows you to connect to your business bank and credit card accounts to receive a daily update of your transactions. This saves you the time it would take to manually upload statements into the system and it gives you a daily overview of your accounts. This feature also assists with reconciliation, making 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 with an overview of your account activity and key metrics, such as cash flow, P&L, account balances, expenses, A/P, A/R and sales. Some software lets you 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 can help you get paid faster. Some accounting programs integrate with third-party payment processors while other vendors require you to use their in-house processing services.

Recurring Invoices

With this feature, you can schedule the software to generate and send invoices for recurring charges automatically, 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. Many accounting software providers don’t have recurring invoice functionality (we’ve noted in our reviews which ones do).

Automatic Payment Reminders

This feature reminds your customers about upcoming and past-due payments. Some have sample email text you can use as is or customize. You can then choose when you want the reminders to be sent. Some programs also give you the option of sending 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 software, saving you the hours it would take to sift through records. You can then approve or deny the suggested matches. The best products we reviewed suggest potential matches as you reconcile your accounts and a few also include a reconciliation feature on their mobile apps.

Financial Reporting

Every accounting program generates financial reports. Some are more basic than others and some require you to subscribe to a higher plan for advanced reporting. If you need specific types of financial reports, make sure they’re included in the program and plan you choose. Detailed reports can help you interpret your financial data to make informed business decisions.

Mobile Apps

Not every accounting and invoicing program has mobile apps, but the best ones do. However, there is quite a bit of variance in app capabilities. Some can capture receipts for expense tracking only, several allow you to create and send invoices and others have almost every feature the web-based software does. As mobile work becomes increasingly convenient, it’s worth verifying that a company offers a mobile app with its software.

Integrations

The ability to connect your accounting software to the other business programs you use saves you the time of manually transferring data from one system to another. Highly rated payroll services, payment processing platforms, top point-of-sale systems and customer relationship management software are some popular types of integrations you may want to look for. Integration with systems you already use also cuts down on training time for employees.

Tracking for Billable Hours

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

Inventory Management

If you have a retail or distribution business, you’ll want accounting software that tracks inventory and helps with purchase ordering. You may need to subscribe to a top-tier plan to get this feature. If you need more advanced inventory features, the best inventory software options feature 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 tasks and budgets. The software should allow you to invoice customers for tracked time and rebill them for project expenses.

Support for Multiple Businesses

Several programs we reviewed allow you to add more than one business to your account, though some of them charge extra for this convenience.

Artificial Intelligence

Many accounting software solutions are beginning to include artificial intellgence into its platform, either natively or via integrations. AI is being used to help detect errors, flag cash flow issues, make quicker decisions and speed up communication with collaborators.

Benefits of Accounting Software for Business

Properly managing your business’s finances is no small task. The right accounting software can take a lot of pain out of the process. Here are several key advantages to using accounting software.

Organized Finances

An individual may be able to manage their personal finances on the fly, but recording transactions haphazardly and relying on bank statements won’t cut it for a business owner. But small businesses need to keep all their finances organized to prevent any negative surprises. Accounting software can help achieve that. It organizes and stores your financial data in one central location. Many time-consuming accounting processes can be automated, eliminating the likelihood of mistakes.

Cost-Effective Solutions

Accounting software doesn’t have to be one of your biggest expenses. There are several price points that meet the needs and budgets of small businesses. We’ve highlighted free solutions too. Many are easy to set up and don’t have a steep learning curve, which means you can learn the software quickly and start managing your business’s finances.

Compliance With Tax Laws

Trying to configure business taxes can be extremely overwhelming for small business owners. Accounting software takes the guesswork out of filing taxes. Many of these programs calculate sales tax and prepare and file a variety of tax forms. That frees you to concentrate on running your business.

The Section 179 deduction allows businesses to deduct the full purchase price of qualifying assets they financed during the tax year. Learn more ways small businesses can save on taxes.

Improved Internal Controls

Internal controls are the procedures and measures implemented by an organization to ensure the integrity of accounting and bookkeeping. Accounting software can help prevent and detect fraud by increasing the reliability of your controls. This can reduce the probability of theft and loss of assets.

What to Expect from Accounting Software in 2023

The accounting software market is poised to continue growing as more businesses adopt cloud-based accounting programs. With more businesses adopting a hybrid work arrangement, the need for cloud-based services is still on the rise. Many accounting software providers have moved entirely toward a software-as-a-service model and we expect this will continue into 2023.

Business owners are considering the use of accounting software to reduce accounting headaches as working at home becomes the norm for many. According to market research from Fortune Business Insights, the accounting software market is poised to reach $20.4 billion in 2026, up from $11 billion in 2018. The industry continues to focus on making accounting software more accessible and user-friendly. Given the increasing preference for smartphones over desktops, we expect more providers to start offering mobile-first solutions and dedicated apps.

Like many other areas of financial technology, the accounting software space has many players that cater to small business owners, making competition fierce. That should continue in 2023, which is good news for small business owners, who will gain access to more tools and functionality. Expect additional features to speed up processes, save time and boost productivity.

Artificial intelligence (AI) and machine learning gained popularity, with many accounting applications implementing these advanced technologies to reduce manual data entry and automate redundant tasks. Analysis from Vantage Market Research found a growing demand for many accounting functions to be automated, fueling the need for more AI capabilities to be built into accounting software. We expect this trend to continue in 2023 as the accounting profession seeks to reduce human error and increase productivity.

We also see analytics as another major trend in the accounting industry. Professional accountants are increasingly taking on the responsibility of analyzing data and communicating business results and trends to managers and clients. Many accounting software services now offer data analysis and visualization tools and we expect those functions to expand and grow in importance over the coming years.

Reporting features are also growing increasingly important in a globalized world. More tax authorities are imposing real-time reporting requirements. These real-time reports contain details about your company’s profits and losses and AI technology increasingly powers this feature. We think business owners will seek software providers that support these new regulations.

Accounting Software FAQs

Accounting software is an efficient system that saves time and reduces human error. It automates accounting software functions, which eliminates the problem of inefficient and inaccurate data entry. You can also connect the software to your business bank or credit card accounts.

Important reports and financial statements, such as P&L statements and balance sheets, can be created from accounting programs. This is helpful when you’re seeking funding from an investor. Not only does accounting software help you manage your cash flow, but it also streamlines financial tasks and puts everything you need to do in one place. This reduces confusion and keeps you abreast of how your company is doing.

Any company looking for help managing its finances should use an accounting tool. Especially for small business owners, it makes managing your finances easier by automating tasks and reduces human error in your data entry. Accounting software also helps you comply with local, state and federal tax laws.

This software is useful for businesses looking to save time or set up a bookkeeping or accounting system. Accounting software lays the groundwork for that. It also helps manage your tax filing and business taxes.

The term “online bookkeeping software” frequently is used interchangeably with “online accounting software” in the small business market. The best online accounting software applications have features for keeping the books and analyzing your business’s financial health. However, there is a difference between a bookkeeper and an accountant. For our reviews, we focused on solutions that offer the ability to analyze financial data rather than solutions with basic bookkeeping options.

The best online accounting software uses bank-grade data encryption to protect your account. Furthermore, it should either require or allow you to opt in to two-factor authentication, giving you another layer of security. Because the software is in the cloud, your data is safe, even if your computer is stolen or destroyed.

If you have employees or an accountant accessing your accounting program, you can control the information they see by setting user permissions. The best accounting programs include a detailed history or audit log that shows which changes were made to your records, on what date and at what time by which user, giving you additional insight and control over any changes or entries made in your accounting program.

Yes. Some accounting software providers offer their services for free. Wave offers free accounting software and provides an array of key features to manage your financial data. Wave has no hidden fees, and you can access its invoicing, accounting and receipt-scanning functions for as long as you want at no charge. Instead of simply offering free trials, companies like Wave provide all the essentials for free.

While free accounting software is available, it’s important to find a program that gives you what you’re looking for at the standard your company requires. Free doesn’t always mean faulty, but some free services and software lack sophistication or efficiency. Cloud-based software can grow your business at an affordable price point as well.

Our best picks, which include QuickBooks Online, Xero, FreshBooks, Zoho Books and Wave, are easy to use and have tips and hints within the software, plus online support resources designed for new business owners who don’t necessarily have accounting experience, such as getting-started guides, video tutorials, webinars and how-to articles with step-by-step instructions.

Many of these companies offer free trials. You shouldn’t buy an accounting solution without first testing it to see how it works. Some companies even include hypothetical data for testing, which makes it easier to play with the program and see all the different features. We recommend exploring each platform you’re considering to get a feel for how it works before paying.

Integrating payroll with your accounting software can save you time, but you don’t necessarily have to get both systems from the same company. Many accounting software applications offer integrations with a variety of payroll services. If you prefer to use the same company for both, check out QuickBooks Online and Wave, which offer payroll as an add-on service to their accounting software. If you need more sophisticated solutions, it might be a good idea to check out the best payroll software for small businesses.

It’s not necessarily a deal-breaker if your accounting software doesn’t generate invoices. You can even learn how to create and send invoices with PayPal. However, for some companies, it is a necessity. If you’re a freelancer or a small business that expects to send invoices to clients regularly, it’s a good idea to look for accounting software that includes an invoice generator. The ability to create invoices quickly and send them to clients automatically can save your business important time. One fantastic choice for invoice generation is FreshBooks. With FreshBooks’ mobile app, you can quickly convert estimates into invoices with the click of a button.

The ideal time to switch your accounting software is as your company’s fiscal year is ending. (This can correspond with the calendar year if that’s what works best for your business.) Making a change at the start of the new fiscal year allows you to wrap up the reports from that time period and start the year reporting on new financial information, which makes the transition seamless and less complicated.

If you can’t wait until the start of the next fiscal year to make a change, the next best time is at the end of a fiscal quarter.

The whole idea behind accounting software is to make it easier for you to manage your operations. If it is too complex or requires a lot of manual entries, it may be a waste of time. Good accounting software should be easy to use, integrate with your bank and other apps and enable collaboration with your accountant. The best options also include invoicing, reporting and a mobile app.

You may want to change your accounting software for several main reasons:

• As your business grows, your needs may change and require you to consider a different accounting vendor that offers more features and functionality.
• Complaints among employees who use the software could also prompt a change. If your employees find it difficult to navigate, it could reduce productivity.
• Outdated software or a platform that doesn’t integrate with other business applications is yet another reason to consider new accounting software.

The trend toward automation in accounting software has been going on for several years. Today, it is used for a myriad of processes, including extracting information from tax documents, creating journal entries and freeing up bookkeepers by eliminating manual entries. Also, automation can help accountants streamline data entry and analysis.

Mike Berner is a staff writer at business.com and Business News Daily, where he specializes in finance topics including business loans, accounting, and credit card processing. Mike has a deep background in the financial world, having written hundreds of articles and blog posts on financial markets, business and investing. He holds a B.A. in economics and a B.B.A. in finance, both from the University of Massachusetts, Amherst. Prior to his writing career, he performed financial analysis and research as an economic analyst.

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