Best Small Business Accounting Software – Top 4 Providers Compared QBO / Freshbooks / Sage 50 / Wave

We have no idea why David Waring did not include Xero in the field, nonetheless David Waring for FitSmallBusiness.com writes: With so many accounting software solutions on the market, it can be difficult to identify the best small business accounting software for your needs.  In today’s article we review the 4 most popular small business accounting software packages and reveal which is the best fit for your business.

Best Small Business Accounting Software for small businesses doing more than $250K in revenue: Quickbooks Online

Best Small Business Accounting Software for businesses doing less than $250K in revenues: Wave

	Quickbooks Online	Freshbooks	Sage 50	Wave
Cost for basic package	$12.95/Month	$19.95/Month	$379.99/One Time	Free
Cloud or self hosted?	Cloud	Cloud	Self	Cloud
Other Available Features (may require additional cost)	Invoicing Time Tracking Payroll Payments Point of Sale Inventory Management	Invoicing Time Tracking Payments	Invoicing Time Tracking Payroll Payments Inventory Management Point of Sale CRM	InvoicingPayrollPaymentsPoint of Sale
Other Integrations	DemandForce, Salesforce andmany others	Basecamp, Highrise and many others.	Document Management, Sales Management and many others.	none listed
Customer Service	Phone/Email	Phone/Email	Phone/Email/Live Chat	Email
	Learn More	Learn More	Learn More	Learn More

Best Small Business Accounting Software ($250K+ in revenues):Quickbooks Online

BEST FOR: Businesses doing more than $250K in revenue.

HOW IT STACKS UP: QuickBooks has been the most sophisticated accounting solution on the market for years. The online version has done an excellent job in keeping pace with the cloud revolution, boosting collaboration functionality, and integrating with mobile devices. Small businesses may be better served by a more simple, easy-to-use option, but we personally use QuickBooks Online and feel it will remain the go-to accounting solution for medium and large business.

PRICING: You pay a monthly subscription fee and can choose from three different packages. Simple Start is $12.95 per month and allows basic functions such as income and expense tracking, automatic banking integration, and sending invoices. If you want to manage and pay bills, set up recurring invoices and compare you’re profitability with industry trends, you’ll need to upgrade to the Essentials package for $26.95 per month. The Plus package will set you back $39.95 per month and offers added features such as inventory tracking, the creation of purchase orders, and budget projections.

WHY WE LIKE IT:

• Cloud hosting means you can access the program any time, from any computer and automatic data backup means you don’t have to worry about maintaining a server bank.
• Well-designed dashboards display the financial health of your company at a glance.
• Improved collaboration functionality allows you to seamlessly share data with clients, your accountant and employees from different business units.
• There’s a deeper focus on multi-tasking and you can now easily switch between accounts without logging out.
• You can easily synchronize your bank accounts for time-effective, stress-free bank reconciliation.
• Integrated QuickBooks Online smart phone apps keep you connected at all times and include new functions such as receipt capture for improved expenses management.
• As the industry standard in accounting software, you can expect your accountant and bookkeeping staff to be familiar with QuickBooks.

LIMITATIONS: Payroll functionality is not included in any of the three subscription packages. It’s held back as an additional add-on for an extra $31.20 per month. Even with the Plus subscription, only five users can access QuickBooks Online simultaneously, which may cause frustrations if you are running a larger business.

Quickbooks Online: Try Now FREE for 30 Days!

Best Small Business Accounting Software (Revenues Lower Than $250K): Wave

BEST FOR: Freelancers, contractors and sole proprietors who are on a tighter budget and need a basic accounting system.

HOW IT STACKS UP: Let’s not beat around the bush – this collection of simple accounting tools will not cut it for larger businesses. However, if you’re a sole proprietor with little accounting knowledge who feels overwhelmed by the complicated bells and whistles of other more advanced systems, then this could be the answer to your prayers.

PRICING: Wave is free to download and use, however the optional payroll add on will cost you $5 per month plus $4 per employee for the first 10 employees and $1 per employee after that. And if you want to take credit card payments, it will cost you 2.9 per cent of the transaction, plus 30 cents.

WHY WE LIKE IT:

• Wave connects to your bank account, PayPal account or other sources of data to automatically download your transactions into the system to eliminate manual entry.

• Invoices are customizable, you can set recurring invoices and you can include a ‘Pay Now’ button to accept credit card payments.
• Personal finance software lets you set budgets, assess your progress, and track your investments with real-time stock data.

• Snap a photo of your receipts with your smart phone and they will automatically upload into your records for easy bookkeeping.

LIMITATIONS: Wave runs internal advertising integrated into your dashboard to keep the service free, but this can be distracting. It would be worth offering an ad-free version for a small subscription fee, but for now it seems you’re stuck with ads. If you just need to send a few invoices, accept online payments, do your simple bookkeeping and track your personal finances, it’s great – but don’t expect much more than that.

Other Options:

FreshBooks

HOW IT STACKS UP: FreshBooks was purpose designed for small business and offers many of the basic functions available in QuickBooks without some of the more advanced functionality that is mostly reserved for medium and large business. FreshBooks offers automated billing and depreciation tracking and supports multiple currencies, however you don’t get the more advanced accounts payable, accounts receivable and general ledger functionality that comes as standard with QuickBooks. The result is a user-friendly interface that’s easier to use and doesn’t require the training time or expense required for the more complicated QuickBooks.

PRICING: FreshBooks starts from $19.95 per month to manage a maximum of 25 clients. Most businesses, however, will need to upgrade to the Evergreen package that allows you to manage an unlimited client base and gives five additional team members access to the program. If you need more than five additional FreshBooks users, you’ll need to upgrade again to the Mighty Oak package for $39.95.

Things to like:

• FreshBooks was designed for small business people, not professional accountants, which results in a user-friendly interface for accounting novices and takes less time to learn.
• The award-winning iPhone app and new Android app allow on-the-road connectivity for service-based professionals.
• As with QuickBooks, a customer support line provides advice and troubleshooting help during business hours. No need to waste time watching endless YouTube tutorials.
• Customizable online invoices support 14 payment gateways including credit cards and PayPal, and late payment reminders and recurring invoices save you time. FreshBooks will also notify you when your client has seen your invoice.
• Easily track your expenses with transactions automatically exported form you back account and snap photos of receipts with your smart phone.
• Track your time and pull your billable hours directly into your invoices, set different rates for each project and boost productivity with team timesheets.

LIMITATIONS: Our major problem with FreshBooks is the price. It’s expensive if you need access for multiple staff members, and QuickBooks offers a cheaper entry point, along with more advanced functionality for your money. If you’re a small business that finds yourself growing into a medium business, then it’s quite possible you’ll out-grow FreshBooks. Learning QuickBooks will take you more time in the short term, but if growth is on your mind, it may be a better investment than having to migrate to QuickBooks later.

Sage 50

HOW IT STACKS UP: Sage 50 is the only of the big four that’s not cloud hosted. That means a more complicated set-up procedure and limited remote access. However, it’s a very sophisticated system and covers everything from basic accounting to inventory and project management, and offers a strong payroll processing solution. Sage 50 will be especially valuable if you have accounting experience, however beginners may feel overwhelmed.

PRICING: While you only need to part with a one-off payment rather than an ongoing monthly subscription fee, it will cost you significantly more to get started – especially if you need multiple users. The software starts at $379.99 for a single user; $699.99 for three users; and $949.99 for five users. You may also need to factor the time IT staff will take to install it into the set up costs.

Things to like:

• It’s a complete accounting solution and is the only on this list that includes payroll processing as a standard inclusion.

• Sage 50 helps you grow. The Inventory and Services Management Center is great for planning purchases, customizing item and service data, and expanding service offerings.
• Project management tools help you ensure large projects don’t get out of hand. You can break large jobs into phases, then track costs to phases and compare estimates to actuals as the job progresses.
• Run ‘what if’ scenarios in the Cash Flow Manager to anticipate your cash needs into the future under a range of different conditions.
• The 2014 version has reduced the number of steps necessary for tracking outstanding invoices, which makes recording late payments quicker and easier.
• You get quick access to customer information – such as credit status messages – when creating invoices.

• The in-built Sage Advisor offers a QuickBooks Conversion Guide, which makes it easier to switch platforms.

LIMITATIONS: While new users receive one year of free customer support and automatic updates under the Sage Business Care Silver plan, you’ll need to pay your own way after that. The user interface also seems quite out dated and if you’re used to using more attractive cloud-hosted software in other areas of your business, using Sage 50 could feel clunky. We’re also concerned about its poor remote access capabilities. If you’re addicted to your smart phone or tablet, don’t expect Sage 50 to play nicely.