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Best Online Accounting Software for Small Businesses


Running a small business or freelancing? Regardless, keeping a tight grip on your finances is highly crucial to your business’ success.


Small business owners benefit from accounting software as it helps them to track accounts receivable and accounts payable better, as well as have a clear understanding of their profitability and be prepared for tax season. Small businesses can use out-of-the-box software without requiring extensive customisations. As a business grows, its accounting needs become more complex, and a custom enterprise resource planning (ERP) system is often needed.


Choosing the most appropriate accounting software for your business depends on two main factors: the type of industry and the number of employees.


There are many different types of accounting software available for small businesses, with varying capabilities and price tags. For this article, we will briefly cover only three of the best small business accounting tools to help keep your company at bay.



1. Xero


Basic plan price - USD20


Pros

  • Cloud-based

  • Mobile app

  • Payroll integration with Gusto

  • Third-party app marketplace

  • Simple inventory management

Cons

  • Limited reporting

  • Fees charged for ACH payments

  • Limited customer service


Xero’s clean and simple interface fully integrates with a third-party payroll service. Businesses can collect payment online from customers through Xero’s integration with Stripe and GoCardless. Xero offers three monthly subscription options, a 30-day free trial and a promotion for 50% off for two months.


The early plan limits usage and only allows entry for five invoices and quotes, five bills, and reconciliation of 20 bank transactions per month. This limited plan may be suitable for a micro-business with high-ticket transactions, but only a few per month, such as a consulting or small service provider.


Both the Growing and Established plans offer unlimited invoices, bills, and transactions. The only difference is that Established has additional features like multi-currency, expense management, and project costing. All three plans offer Hubdoc, a bill and receipt capture solution.



2. Quickbooks Online


Basic plan price - SGD23


Pros

  • Cloud-based

  • Mobile app

  • Track mileage

  • Differentiate between business and personal expenses

  • Syncs with TurboTax

Cons

  • Data cannot be easily transferred to other accounting software

  • Limited reporting

  • Limited invoicing functionality and customization


QuickBooks Online is mainly for freelancers and independent contractors to track income and expenses for tax returns. The biggest advantage of using QuickBooks Online is that it totals up all business transactions automatically. QuickBooks Online helps freelancers stay organised for tax season annually.


Users can choose between three plan options:

  • Self-Employed ($15 per month)

  • Self-Employed Tax Bundle ($25 per month)

  • Self-Employed Live Tax Bundle ($35 per month)

The mobile app makes it easy to track mileage while driving and capture photos of business expense receipts. QuickBooks’s most special feature provides an option to mark each transaction as business or personal. This is helpful for freelancers who don’t have a separate bank account for their business activity.



3. Freshbooks


Basic plan price - USD7.50


Pros

  • Cloud-based

  • User-friendly interface

  • Third-party app integration

  • Affordable

  • Advanced invoicing features

Cons

  • No inventory management

  • No payroll service

  • Mobile app has limitations


FreshBooks offers more customizations for invoicing and business’ basic bookkeeping needs. For service-based businesses, FreshBooks is an easy tool to send proposals and invoices, request deposits, collect client retainers, track time on projects, and receive payments.


There are four different plans:

  • Lite ($6 and 5 clients per month)

  • Plus ($10 and 50 clients per month)

  • Premium ($20 and unlimited number of clients per month)

  • Select (custom pricing, additional $10 per month for multiple team members, additional $20 per month for advanced payment feature)

There are many third-party app integrations available, such as Shopify, Gusto, Stripe, G Suite, and more. FreshBooks allows invoices to be highly stylized and customised for a professional look and feel. FreshBooks is a great tool for budgeting out projects, sending estimates or proposals, and collecting customer payments.



Our Verdict


Out of all the three online accounting software listed, we at HudAccounts would like to recommend Quickbooks Online for small businesses. Given it’s the most feasible and the easiest to use among the three, we trust that Quickbooks Online will be the best choice if you intend to start a business from the ground up.



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