Best accounting software 2020

If you are a small business owner, there is a raft of potential tech platforms you can use to help you run your business. Admittedly, many of these platforms can be unnecessary “bells and whistles.” They are a pleasant thing to have, but your business does not necessarily derive any huge benefit from using them. However, this sentiment does not apply to online accounting software, which should be a top priority when building your small business tech stack.

Xero estimates even accounting professionals can save up to three hours per day using software. If professionals can save three hours a day, how much time could you save? If you are a small business owner wearing many hats, how valuable will the time you save be to you and your business?

What is accounting software?

In general, most accounting software platforms have similar basic features, allowing you to:

• Track incoming and outgoing monies.
• Send invoices directly to clients.
• Receive debit and credit card payments or allow your clients to set up direct debits.
• Expand your business beyond your home country’s borders by offering multi-currency support.

However, depending on your specific needs, you will be able to find accounting software that can take care of various other features, including:

• Employee time tracking.
• Payroll processes.  
• Inventory management and tracking.
• Document storage and management.
• Personalised, white labelled portals for your clients.
• Integrations with other platforms in your small business tech stack.

You might even opt for a fully-fledged ERP accounting software platform to help you manage all your business operations as you grow.

While most of the best-known accounting software is commercial, there are several open-source accounting software platforms available. Many open source accounting software platforms are free but offer paid options if you want to benefit from added functions and features.

What is the best accounting software for small businesses?

There is not one accounting software that we can definitively say is the best for your business. Why? Because your business is unique.

The best accounting software is the one that suits you. For example, you might need a specific small business accounting software for Mac users. Likewise, you might be able to find specific accounting software for your niche. If you run a charity, for example, you will be able to find many examples of non-profit accounting software. Many of the world’s biggest accounting software providers, including Xero accounting software, also offer plans for non-profits.

We want to help you make as informed a choice as possible when it comes to accounting software. To facilitate this, we have pulled together a top three list of accounting software covering both paid and free accounting software for small businesses.

Top 3 free accounting software platforms

Most accounting platforms will give you a free trial. However, as a small business, you might be tight on both time and financial budget. Therefore, you might be better off going for a free accounting software solution right out the gate.

Many free platforms are scalable; you can smoothly progress onto a paid tier when your business grows, and you need more from your accounting software.

1. Wave

Wave is a fantastic free software that allows you to take care of all your essential small business accounting functions, including:

• Sending unlimited invoices.
• Scanning of receipts.
• Ability to connect bank accounts and credit cards.
• Manage your accounts.
• View all dashboard and reporting functions, including overdue invoices, cash flow, and business profit and loss.

The only thing you will need to pay for with Wave from an accounting perspective is if you want to allow your clients to pay invoices online.

You can also add payroll functions to your Wave account as a subscription.

2. ZipBooks

ZipBooks is a simple to use, free accounting software with a clean interface offering an enjoyable user experience. ZipBooks offers mostly the same features as Wave, with one difference being you can take online payments via PayPal. Best of all, you don't have to pay for this function; all you will pay are the usual PayPal fees!

If you want to integrate your accounting to payroll and other HR functions, ZipBooks integrates seamlessly with Gusto, for which you will need to pay a monthly subscription.

3. GnuCash

GnuCash had to have a place on this list simply because of how easy it is to get started. Go to the website, download and install GnuCash, and you’re ready to go. The GnuCash website is loaded with valuable resources to help you get started and learn the ropes, too.

Top 3 paid accounting software platforms

1. Sage 50cloud Accounting

Formerly Peachtree accounting software, Sage 50cloud Accounting is a premium software solution. You can install Sage as a desktop application and integrate with Office 365 for easy printing of reports or uploading of documents.

Perhaps the best feature of Sage 50cloud Accounting is that it is set up to scale with your business as you grow.

The starter plan, called Pro Accounting, enables you to organise your business finances in one place, send invoices, pay suppliers, and analyse your cash flow.

As you grow, you can add whatever features you need, from payroll and inventory tracking to additional users. Sage will even work with you to help you identify the software features you need to tailor your experience to your industry and business needs!

Even the lowest tier plan is expensive, but if you already have significant revenue, it is well worth it.

2. Intuit QuickBooks Online

QuickBooks is one of the world’s most famous accounting platforms, and with good reason. QuickBooks’ lower tier plans are affordable and packed with features, allowing you to have access to a fully-fledged accounting suite at little expense.

You can receive payments online on any plan, too. If you already send a significant number of invoices per month, you will make a saving versus paying processing fees with other platforms.

As you grow, QuickBooks' higher-tier plans include employee time management, inventory management, and full payroll functionality.

3. Xero

Xero is an excellent choice if you work on the move and need to send invoices and receive payments whether you are in a client’s office or on the train to your next appointment.

In addition to the usual plethora of features such as custom invoicing and the ability to make and receive payments, Xero also allows you to automate financial performance reports to be sent to you regularly. Ideal if your business is at the stage where you're employing others, and you're taking more of a pure leadership role.

Like ZipBooks, Xero partners with Gusto for payroll services integrations.

Overall takeaways

Remember that the best accounting software is the one that suits your small business. It is worth noting that even the leading paid accounting platforms are cheap if you subscribe to their lowest tier services. Paid platforms typically offer a more comprehensive range of functions and make it easier to scale as you grow. We are not writing off free accounting software! However, given the overall time, and money, you will save, a paid accounting software platform is more than worth the investment.

Integrate your accounting system with Contractbook

Interoperability is an important attribute when picking an accounting system. Integrating your accounting with a contract management system, a salary system or a CRM will enable easy transfer of data and many automation opportunities. 

Contracbook integrates well with most accounting systems through integrations with Zapier or our Public API that allows for more customised setups. You are able to make integrations that transfer data between the systems, so you do not have to do it manually, and you can set up triggers that set other events in motion so that payment could trigger a certain contract and an exceeded due date another. Read more here.