Many start-ups and small businesses neglect good bookkeeping, but it should be the foundation of any company – large or small. Keeping accurate records will give you a snapshot of how your business is performing over time and make it much easier to remain compliant when the dreaded IRS comes knocking.
Bookkeeping involves recording all financial transactions that take place within the business. It can be tedious and time-consuming. Thankfully, cloud-based bookkeeping software has simplified the process by automating and streamlining repetitive and tedious tasks. Not only does it save time, but it also saves money. According to Forbes, software automation will save between 40 percent and 75 percent with a payback of several months to several years.
Bookkeeping software focuses on accurately recording all financial data so that you can organize, analyze, and adjust – minimizing your expenses and maximizing your income.
We’ll cover each bookkeeping software in more detail later. In the meantime, here’s a quick summary of the best bookkeeping software in 2022:
- QuickBooks Online: Best overall bookkeeping software for small businesses. QuickBooks does it all, from being a bookkeeping platform to a robust accounting tool. There’s an option for every set of needs with its comprehensive platform.
- FreshBooks: The addition of double-entry accounting has resulted in additional report options. The reports screen displays your top five reports.
- AccountEdge Pro: AccountEdge Pro offers a wide selection of features, ranging from basic to advanced. There are add-on options, such as adding a payment link to your invoices and credit card processing.
- Xero: As your business grows, Xero supports unlimited users and over 700 app integrations. It even has its own payment plan for growing businesses.
- Wave: Wave offers a free platform for accounting, invoicing, and receipt tracking. It’s a good match for businesses operating on a smaller budget.
- ZipBooks: ZipBooks has a very appealing interface that is easy to navigate. ZipBooks has fast loading times, and the software is well organized.
How we pick the best bookkeeping software
When coming up with our list of the best bookkeeping software, we looked for software based on certain criteria. More about the methodology can be read in detail later on.
- Functionality. This is based on how well the software meets the needs of your business. We’ve highlighted some of the newer features and the ones that tie in with the category the software excels in.
- Financial reporting. It’s important that businesses can get an accurate snapshot of their financial standing. We’ve reviewed software reporting based on how well reports can be tailored to the business and on the reporting features of the software.
- Growth. Everyone goes into a business hoping to grow. We’ve reviewed software based on how well the software will grow with your business, such as the number of users and integrations.
- Value. Not all software is priced fairly. We’ve reviewed prices based on what the software offers. Sometimes you get what you pay for.
- Ease of use. Automation and streamlining make repetitive and tedious tasks quicker, easier, and less frustrating to accomplish. We’ve reviewed software based on how intuitive it is and how easy it is to navigate.
Best bookkeeping software
Best overall bookkeeping software for small businesses.
QuickBooks Online is a popular bookkeeping option for businesses of all types and sizes with up to 50 employees, startups, sole proprietors, online sellers, inventory-based businesses, growing businesses, and service-based entities. In addition to Windows and Macs it works well on mobiles and tablets thanks to a great app.
QuickBooks Online is a cloud-based software with mobile apps for both Android and iOS. A flexible, scalable option, QuickBooks Online meets the various needs of small business bookkeepers with its generous accounts payable and accounts receivable features.
- Invoices. Sending invoices is a simple process.
- Estimates. Estimates can be converted into quotes and emailed directly from QuickBooks Online, simplifying the process to receive payment.
- Bills and receipts. Organizing receipts and paying bills is another efficient feature of QuickBooks Online that speeds up the payment process.
- Contractors. The software pays contractors and issues 1099s
- Banking. You can connect QuickBooks to bank accounts, PayPal, credit cards, and Square. Transactions will automatically import.
- Payroll. One outstanding feature is that payroll is built in (though it does cost extra)
- Tracking. Helps with tracking sales tax and mileage.
- Mobile. You can use your phone or tablet to manage accounts, enter transactions, and send invoices.
- Business analysis. QuickBooks offers data-driven insights such as spending habits and potential cost-saving.
- Expenses. With the mobile app, you can take a picture of your receipt and attach it to your business expenses.
Small businesses requiring access for multiple users will need to buy one of the more advanced plans. QuickBooks Online is an all-in-one flexible and scalable platform with many add-on options and integrations that allow it to do more than your average bookkeeping software.
The most common report data is visible on the dashboard at all times. Reports are easy to run with a simple click and are customizable. Bookkeepers will find the financial reports they need, such as balance sheets, income statements, and cash flow in QuickBooks Online’s Simple Start plan.
Bookkeepers will also find reports such as sales, receivables, and payables with QuickBooks Online Essentials. To run inventory reports, comprehensive sales and profitability reports require QuickBooks Online Plus, while QuickBooks Online Advanced features a comprehensive set of reports with business analytics and insights.
Many of the reports are available in the mobile app, as well. Plus, users can save their frequently run reports and report customizations to a shortcuts area in the reporting tool for re-use whenever necessary.
Ease of use:
QuickBooks Online features a user-friendly, modern interface. The setup process is quick and painless. A free trial provides users with the opportunity to try the software before buying it. It is widely popular, so the user community is vast and can help anyone who is trying to learn how to use the software. It also provides excellent training opportunities.
QuickBooks Online offers many options at different tier levels. The number of features increases with each tier, along with the price. It also offers a free 30- day trial.
Things we liked:
- Apps are well executed
- Excellent user interface and easy to navigate
- Multiple users with permissions on most plans
- 1099 contractor support
- Scalable and flexible
Things we didn’t like:
- Can get costly but additional options are worth it
- Only single entity support is available
- Payroll incurs an extra cost
BEST BOOKKEEPING SOFTWARE IN 2022: QuickBooks is our #1 pick. All of QuickBooks’ plans are ideal for tracking income and expenses, sending invoices, and receiving payments. As your business grows, you can track inventory, track time, and run payroll. It’s incredibly easy to use, can be integrated with many platforms, and has all the features a bookkeeper will ever need.
Best bookkeeping software for financial reports.
Best for those who are self-employed, sole proprietors, start-ups, and small businesses.
FreshBooks is designed with double-entry accounting, is cloud-based, and is accessible anywhere via browser and internet access.
Some of its standout features include:
- Invoicing and payment collection. Both of these can be executed through FreshBooks or also through an integration with Stripe.
- Proposals and estimates. Both of these can be converted easily to invoices.
- Invoices. Have a lot of customizable options.
- Advanced plans. The software automatically takes into account retainer fees and bills only for hours over and above that amount. The advanced plans feature automatic payment and late-fee notifications.
- Banking. Integration and multi-currency support are possible through FreshBooks, which also streamlines expense tracking, allowing the attachment of receipt photos.
- Expenses. The software automatically categorizes expenses. It also allows you to create an expense right from the expenses tab with the Quick Expense Creation feature.
- Management and tracking. FreshBooks also supports team and project management, multi-project management, mileage tracking, and time tracking.
The addition of double-entry accounting has paved the way for more reports, in particular, a General Ledger and a Profit and Loss report. Through the dashboard, there is quick access to profit and loss, sales tax summary, accounts aging, expense, payments collected, invoice details, and additional advanced accounting reports.
FreshBooks offers more reports than your average bookkeeping application and they are very detailed. Reports can be filtered by date, team member, or client to aid the user in analyzing financial information. Not only is there a wide selection of reports, but the screen lets you display your top five reports at the top of the screen for quicker access.
Ease of use:
FreshBooks features a simple interface. Those with little or no accounting experience can easily navigate the software. The customer service here is known for being friendly and helpful. It also provides comprehensive training materials.
FreshBooks provides a range of monthly pricing options, depending upon the plan selected. As far as cost goes, FreshBooks is in the middle of the pack—not the most expensive, but definitely not the cheapest either. Price increases as the number of billable clients and users are added. Custom pricing is necessary if you exceed 500 clients, but it includes an account manager, lower rates for credit card transactions, and custom training. FreshBooks offers a 30-day free trial.
Things we liked:
- Good automation functionality
- Expense records
- Lots of application integrations
- User-friendly client portal
- Referral program
Things we didn’t like:
- Lacks native accounts payable and payroll
- Most plans are single user
- No user permissions
Best bookkeeping software for functionality.
Because of its scalability, AccountEdge Pro is designed for small growing businesses. The lowest-tier plan is designed for sole proprietors and moves up to the most expensive tier, which is designed for enterprise-level businesses. Businesses will never outgrow this application with all the features it offers.
What will really grab your attention with AccountEdge Pro is the wide range of features. Even some of the standard features in this application have been padded with a few extras:
- Accounts. There are over 100 templates to choose from in maintaining your chart of accounts, or you can create your own. You can create a budget for any account.
- Banking. While most software will let you import bank statements for reconciliations, AccountEdge Pro has taken it one step further by adding an automatic bank feed option that lets you connect both your bank and credit card accounts to the application.
- Sales. You can initiate a quote, process a sales order, create an invoice, and accept payments.
- Time billing. Tracks billable and nonbillable hours, employee time, and can even track employee time remotely
- Purchases. You can create a purchase order, convert a bill to an order, pay vendors electronically, and process 1099 forms.
- Payroll. Payroll can be processed in-house or outsourced through Sure Payroll
- Inventory. The application will alert you when your stock drops below a certain level. It will also keep track of your best-selling products.
- Contacts. You can create custom letters to send out to your customers.
- Customer portal. The customer portal will let customers review their invoices and make payments online.
There are some add-on options as well, such as AccountEdge Web Pay, which lets you include a payment link in your invoices. There’s also an option for processing credit cards. The platform also has budgeting capabilities that most other applications do not have.
While AccountEdge Pro offers a great selection of reports, they are pretty standard ones. The reports can be customized in the application or exported to Microsoft Excel for further customization.
Ease of use:
AccountEdge is designed with an intuitive user interface. There’s a menu bar at the top of the main user screen for all the system features, to the right of the screen are more system functions, and at the bottom for additional navigational aids. Flow charts are presented with each chosen option.
AccountEdge offers four plans that include Basic, Pro, Priority Zoom, and Priority ERP. Throughout these plans, the software moves from basic features to more advanced features, from desktop to cloud-based, from a single user to multi-user, and from onetime fees to monthly fees. AccountEdge also offers a 30-day trial.
Things we liked:
- Wide range of features
- Intuitive user interface
- Budgeting capabilities
- Offers plans that grow with your business
Things we didn’t like:
- Doesn’t offer many integrations
- The mobile platform is not up to par
- Reports could be easier to customize
Best bookkeeping software for growing businesses.
Small businesses specializing in retail, e-commerce, IT, nonprofit, legal, hospitality, Amazon sellers, cafes, start-ups, construction, creatives, global healthcare, farming, manufacturing, tourism, and real estate.
Xero is bookkeeping software that grows with your business. The software supports unlimited users, so as your business grows, you can keep adding employees. The software also supports 700+ app integrations, so there is always an app available to relieve any growing pains.
Other features include:
- Integrations. There are over 800 integrations so that the software grows with your business.
- Users. Unlimited users with every plan, so you can keep adding employees as the business grows.
- Dashboard. The dashboard offers a great snapshot of the company with graphs labeled for bank accounts, invoices owed to you, bills to pay, and total cash flow.
- Sales overview. The application provides a screen that breaks down invoices and estimates.
- Client portal. Customers can view and pay invoices directly online and potential clients can view quotes, which is very helpful when growing your customer base.
- Contact management. Smart Lists is a marketing tool that lets you target a particular group of customers for marketing, which is another great option for growing businesses.
- Expense tracking. Smart categorization automatically categorizes new transactions from past categories.
- Fixed asset management. You can run several depreciation schedules.
- Accounts payable. The purchase overview screen shows details about bills and purchase orders.
- Checks. You can write, customize, and print checks.
- Projects (Established plan). This feature offers projects and job-costing.
- Reports. There are around 50 reports covering every aspect of your business.
- Budgeting. The Budget Manager runs reports at different intervals to see if you’re hitting your financial goals.
- Purchase orders. If you receive an order as a part, you can record a ‘part supply’ to keep track of the rest of the order.
- Multiple currencies. Xero supports over 160 currencies.
Xero can run a large assortment of reports, 50 to be exact. These include general ledgers and profit-and-loss statements. Reports can be customized, viewed as charts, and various filters can be applied. These reports grow in detail and specifics as your business grows. You can get up-to-date reports at any time, insert formulas to compare and calculate and keep track of your business and its growth.
Ease of use:
Xero is easy to set up and use with or without bookkeeping experience. The many automation options can help with daily tasks. The customizable dashboard enables users to make the software more compatible with their needs. As for customer support, Xero does provide some, but most user help will come from guides and training.
All of Xero’s subscription plans support unlimited users so as your business grows, you can add new users at no additional cost. The pricing plans coincide with the business’s growth. There are three plans. The Early Plan is for sole traders, new businesses, and the self-employed. The Growing Plan is ideal for growing businesses, and the Established Plan is for established businesses. Xero also offers a free 30-day trial.
Things we liked:
- Excellent mobile apps
- Regular updates
- Robust file sharing functionality
- Hundreds of integrations
Things we didn’t like:
- Poor customer support
- The feature set in the lowest-cost plan is restrictive
- Limited budgeting capabilities
Best bookkeeping software for the value.
Bookkeepers on a budget. You’ll be hard-pressed to find a better price for such an impressive set of features. Wave is free, and the free version offers everything any bookkeeper would need, even one working with multiple entities. Some features, such as payroll and payment processing, have an associated cost, but Wave is still a good option for those needing the extra features.
Wave is a double-entry accounting option that provides the features most small businesses would need in its free version, including unlimited clients, invoicing, and expense tracking.
- Income and expense management. These are robust features that are well-organized and laid out.
- Automatic payment reminders and bank & credit card feed. Wave can also be set up to send reminders and receipts.
- Invoices. Invoices are customizable.
- Estimates. Estimates can be converted easily to invoices.
- Sales tax. Sales tax is automatically calculated for you.
- Expenses. Offers billable expense and some time-tracking features.
- Support. Provides multi-entity support and multi-currency support
- Wave Money. Provides a business bank account, a debit card, and a mobile app to allow the user to integrate their business account directly into the software seamlessly.
The payroll feature costs extra, but it’s helpful in that the payroll module allows employees to see their W2s, pay stubs, and bank information. In some states, the module can even file payroll taxes automatically.
Wave is cloud-based and accessible via any browser and an internet connection. Wave has two mobile apps, which are Wave Invoicing and Receipts by Wave.
Wave enables accrual and cash basis reporting. Cash flow, profit and loss, trial balance, and sales tax reports are available with Wave. Overall, Wave’s reporting ability is not as robust as some competitors, but it’s still enough for most small-business bookkeepers.
Ease of use:
Setup is simple, and Wave is easy to navigate and use, providing many automated features, including bank and credit card automation, beneficial to the bookkeeper. The dashboard provides a clear overview of business health. The Wave user community is active and helpful for those who need extra assistance, and the Help Center is easy to navigate and provides many tutorials and guides.
Wave is free, which is a price that’s hard to beat. Extra modules, for example, payroll and payment processing, do incur a cost, but they are cost-effective.
Things we liked:
- Very cost-effective
- User friendly
- Excellent workflow automation
- Multi-entity option
- Knowledgeable customer support
Things we didn’t like:
- No multi-user support
- Limited scalability
- Mobile apps aren’t comprehensive
Best bookkeeping software for ease of use.
Who knows better what small-business owners need more than other small-business owners? That’s exactly who designed this application. ZipBooks is ideal for freelancers, startups, entrepreneurs, and small-business owners who want an easy-to-use platform.
ZipBooks offers a nice combination of standard features along with features specifically tailored to your business. The features revolve around both cash basis and accrual accounting methods.
- Invoicing. ZipBooks has all your typical invoicing capabilities, but there is one difference. ZipBooks gives you an overall invoice health score that indicates how strong your invoices are and if they need to be improved.
- Estimates. Estimates can be converted into invoices with just the click of a button.
- Client portal. Here, customers can receive invoices and quotes, accept and decline estimates, and view and pay invoices.
- Contact management. Automatically categorizes customers and vendors.
Sales receipts. When invoice payments are recorded, ZipBooks sends a receipt automatically (higher-tier plans)
- Business intelligence. This includes an invoice health score, business health score, and recommendations. The business health score is based on your company’s financial success. The recommendation bar at the bottom of your screen offers advice that will help your business grow.
- Sales tax. You can run a sales tax report at the end of the year to see how much you’ve collected. ZipBooks supports VAT and other sales tax standards in multiple countries.
- Multiple currencies. Exchange rates are automatically updated and the application supports over 160 currencies.
Depending on your plan, ZipBooks offers up to 16 different reports. The reports include key accounting reports and provide basic insights. They give you actionable insights to guide your business to its optimal performance.
Ease of use:
ZipBooks outshines the competition with its user-friendly interface. The software is well organized, the interface is easy to navigate, the software features fast loading times, and importing accounts with auto categorizations is easy and quick.
Everything is accessed from the home page. Reports and statements are detailed, just a click away, and are color-coded.
Setup and invoicing are quick and easy. The software walks you through every step, while a knowledgeable customer support system is always there for backup if needed.
You can also create and customize your business profile which gives customers easy access to your contact information.
ZipBook offers three pricing plans, which include a free Starter Plan, a Smarter Plan and Sophisticated Plan for a fee, and a custom Accountant plan for personalized pricing. The free plan includes invoicing, quotes and estimates, contact management, live bank feed for one account, business health scores all with one user. A 30-day free trial is offered on the paid plans.
For an extra fee, ZipBooks offers a unique tool known as a Growth Plan. This plan helps businesses improve their internet presence by inviting customers to leave reviews, tracks keyword ranking, sync online listings, and manage any leads.
Things we liked:
- Easy to use
- Free plan
- Excellent customer service
- Simple and aesthetic interface
- Includes standard and advanced features
Things we didn’t like:
- Only offers six integrations
- Does not have an inventory feature
- Limited reports and invoice customizations
Methodology: How we found the best bookkeeping software in 2022
Trying to make a purchasing decision these days is no easy task. When it comes to software, we’re spoilt for choice; and while many providers offer a money-back-guarantee if you’re not happy, it’s hard to ever really know if you’ve made the right choice. That’s why we’re committed to doing the leg for you. We have a robust and impartial testing methodology in place.
To decide which products to test, we maintain keep a comprehensive database of features across a wide range of accountancy software solutions. This data-driven approach helps us better understand the services and their appropriate use cases. To ensure we recommend the very best solutions for real-world users, we give the software to business owners to try in real-world environments. We asked 2 professional accountants and two business owners to use each of the solutions for 14 days. We then asked them to score each of the products based on the following criteria:
- Ease of use
- Financial reporting
These scoring factors are equally weighted because every business need is a little different. We then take the mean average of the results from our reviewers to arrive at a decision. But our research doesn’t end here. We constantly re-evaluate providers as they add new features to their tools. If we feel that a software has changed significantly enough to warrant it, we will retest the solution and update its score accordingly.
What software is most used by bookkeepers?
Quickbooks Online is the most commonly used software by bookkeepers and tax professionals. It offers a comprehensive package of features and is easy to navigate, although any of the recommendations in this article are good options.
Are there any bookkeeping software packages that are free?
ZipBooks and Wave both offer free bookkeeping plans, although we consider it worth investing a small amount in one of the paid options for the better functionality and ease of use they include.
What software features should you look for in a growing business?
Some features that are helpful with businesses that are growing are inventory tracking, time tracking, payroll, multi-user options, and integrations.
Why should you use software for bookkeeping?
Bookkeeping software automates and streamlines repetitive and tedious tasks. The software makes accomplishing these tasks much easier and quicker.
What should you consider when looking for bookkeeping software?
Things to consider are the number of people that will be accessing the software, the need for industry-tailored software, your budget, and what features you need. Also consider if you need online access (most providers offer this) and if there are suitable apps to use.
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- Best bookkeeping software
- Methodology: How we found the best bookkeeping software in 2022
- What software is most used by bookkeepers?
- Are there any bookkeeping software packages that are free?
- What software features should you look for in a growing business?
- Why should you use software for bookkeeping?
- What should you consider when looking for bookkeeping software?