Running a small business can be hectic. Knowing the best bookkeeping software (and how to use it correctly) is a great way to make your life a little easier.

No matter how big your venture is, keeping track of numbers is important. Keeping your books up to date helps you understand important metrics like cash flow and budget. They also prepare you for (or prevent you from) surprises come tax time.

What’s less clear is which bookkeeping software is best. Some are paid and others are free, so knowing which to go with can be tough.

We’ll help you make an informed decision below with these analyses of bookkeeping software.

Benefits of the Best Bookkeeping Software

The best free bookkeeping software (as well as paid versions) offers a number of benefits for a small business.

  • Fast data entry
  • Streamlined report generation
  • Reduced risk of human error
  • Better preparation for paying taxes
  • A deeper understanding of business metrics
  • Less operational costs
  • Insight into trends in your business
  • Insight into ways to save money

The type of bookkeeping software you choose, though, should depend on the venture you’re running. There are many different options available online (view here for more).

How to Choose What’s Right for You

Your bookkeeping application or software should serve the business you’re involved in. For example, small business owners should look for a bookkeeping product that helps self-employed people simplify their lives.

However, this is just one type. Some of the best home bookkeeping software is not designed for businesses, but for accountants, property owners, realtors, and even farmers.

(Believe it or not, farmers have a much different set of requirements come tax time.)

Besides this, consider what you’ll use the software for. Do you need to send invoices? Conduct payroll duties? Link a personal bank account or business account to track cash flow?

Price is also a factor. No bookkeeping software is going to make you go bankrupt. But if you’re just starting out, saving $10 to $20 per month could still a big deal as you work towards generating a profit.

Quickbooks Self-Employed

Quickbooks Self-Employed is one of the most recognizable bookkeeping products for self-employed people. It’s a multifaceted tool designed to track expenses, record income, and generate easy reports.

The tax tool also makes it easy for you to pay every quarter or at the end of each year. One unique thing to consider is that Quickbooks is owned by Intuit, a company that owns many nifty tools for running a business.

Intuit owns Mint, the personal finance app, as well as Turbotax, perhaps the most widely used software for doing your taxes at home. With a few clicks, you can send all your Quickbooks information right over to Turbotax and file quarterly or yearly reports. It’s very convenient.

You can get a trial of Quickbooks or use the free version for a limited time, or upgrade to the low monthly fee for features. Of all the items on this list, it’s likely the most expensive (unless you buy it when it’s on sale and lock in your price).

But since you’re using it for your business, it’s an expense you can write off at the end of the year.

Freshbooks

The Freshbooks software is quickly becoming a household name in terms of the best bookkeeping software on the market.

Notably, Freshbooks has more features for those who deal with clients on a day-to-day basis in their business. It also has tons of nifty tools for people new to the world of freelance and entrepreneurship.

If you feel like you could use a hand and having access to educational tools would benefit you, you might choose Freshbooks over Quickbooks.

Freshbooks also offers powerful invoicing software that makes sending, recording, and curating invoices easy. It does cost a little more than a Quickbooks subscription, but not enough to break the budget.

Wave Accounting

Wave Accounting is probably the best free bookkeeping software you’re going to find. There is a paid option, but you can get a lot of its functionality without ever putting a credit card down. If your business gets paid irregularly, you can even select a pay-as-you-go option.

Wave advertises their business as ideal for those with between 1 and 9 employees. In 2020, they began rolling out new features that make it possible for small business owners to finance and bank with their platform.

Many say using Wave is a lot easier than Quickbooks or even Freshbooks. If you’re an aspiring entrepreneur or testing out the market for a new product, this is your best bet.

Zoho Books

Zoho Books is a software that was designed to do what Quickbooks does but cheaper. Like Wave and Freshbooks, they gear their product more towards startup business owners or people who run small enterprises.

They succeeded in being cheaper. Zoho is about half the price of a Quickbooks subscription with plenty of mobile functionality. It’s a user-friendly application designed for doing business in 2021 and beyond.

Two drawbacks to Zoho include not being able to do payroll or budgeting through the system. If you’re hoping to expand and eventually add employees, you’ll probably need to upgrade to a new system.

Which Is Right for You?

The best bookkeeping software for your business comes down to what your goals are and what type of functionality you need. Quickbooks has long been described as the gold standard, but upstart companies like Freshbooks, Wave, and Zoho are changing the game.

Do your research and start with a free option like Wave if you’re unsure. It’s free, and if you need to upgrade down the road you can always do that.

For more tips for your small business, click around the rest of our blog!

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