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Accounting Software: A Complete Guide For 2023

Understanding finances is an essential aspect of running a successful business, but the days of tracking numbers on nothing more than a wing, a prayer and a spreadsheet are long gone. Instead, most businesses — including sole proprietors working for themselves and accounting departments at international corporations — automate financial tracking and reporting with accounting software.

Learn exactly what accounting software is, which features to look for and how to choose the best accounting software for your business with our complete accounting software guide below.

Get on track with the right accounting software

Sage Intacct's comprehensive cloud-based accounting software solution is a good fit for growing businesses that want bookkeeping basics and then some.

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What is accounting software?

Accounting software systems are software programs that help business owners, bookkeepers and accountants tackle time-consuming but crucial financial tasks related to running a business. The software also serves as a record of a business's financial transactions, history and current fiscal status.

Most commonly, accounting software enables and automates tasks like the following:

Sending invoices.

Accepting payments.

Generating financial reports.

Recording expenses.

Tracking cash flow.

Reconciling bank accounts.

While accounting software can sync with payroll software to record vital financial information relating to payroll expenses, accounting software and payroll software are two distinct business software solutions.

Types of accounting software General accounting software

General accounting software blends bookkeeping (the process of recording financial transactions) with accounting (analyzing bookkeeping information to make informed financial decisions) to support business's financial processes. Comprehensive accounting software can save you time with features like automatic bank reconciliation, billing, invoicing and expense tracking features (and then some).

Billing and invoicing software

Billing and invoicing software is a more streamlined, simpler subset of accounting software. If you're a freelancer who works with a handful of clients on a few projects a year, basic billing and invoicing software — rather than more comprehensive accounting software — probably have enough tools to keep you on top of your finances while making sure you're paid on time.

At the same time, although billing and invoicing apps like Square Invoice and Zoho Invoice focus primarily on helping business owners bill their clients and accept payments, they often include basic bookkeeping features like expense tracking, project-based time tracking and basic expense reports.

ERPs

An enterprise resource planning solution, or ERP, is an enterprise-level software system that facilitates connections between departments and personnel at major corporations. ERPs like Oracle NetSuite offer the same set of tools as any basic accounting program, from general ledgers to billing and invoicing. However, ERPs support accounting on a massive scale along with offering features for managing sales, inventory, services, supply chains and personnel.

Desktop-based vs. Cloud-based accounting software

Today, most accounting software is cloud-based, meaning its data is hosted on an off-site server that you can access anywhere as long as you have internet access, not just at your office. In contrast, desktop-based software is localized to your home or office, though modern desktop software usually comes with optional cloud-based expansions.

More payroll coverage

There are still a few desktop accounting software options on the market, such as Intuit QuickBooks Desktop. However, for the most part, desktop software is in the process of being phased out. Even Intuit pushes would-be QuickBooks Desktop users towards its cloud-based accounting software program, QuickBooks Online.

Desktop-based accounting software could be worth your time if you live in a remote area with unreliable internet access. It might also be a good pick if you need features you can't get anywhere else. (For instance, the most expensive QuickBooks Desktop plan includes in-depth industry-leading reports that aren't necessarily the norm for cloud-based options.)

But for most businesses, most of the time, cloud-based accounting software is a more accessible (and more fully featured) accounting solution than any desktop software alternative.

What's the difference between in-house and outsourced accounting?

Accounting software makes it easier to keep bookkeeping and accounting in house no matter how big or small your business is. However, some business owners may prefer to outsource their bookkeeping and accounting tasks to a third party like a virtual bookkeeping service or individual CPA on retainer.

For the most part, accountants use accountant-friendly software like QuickBooks or Sage Intacct to keep their books, though some third-party bookkeeping companies rely on proprietary in-house software instead. Whether you work with an in-house team or outsource your accounting tasks, plan on interacting with accounting software in some capacity.

What are the key features of accounting software? Invoicing and customer billing

Even the most basic accounting software should include an invoicing tool that lets you bill customers and clients for your goods and services. The software should also give you the ability to accept customer payments directly through the invoice. Ideally, it will support multiple payment options, including debit card and ACH transactions.

Some accounting software, such as FreshBooks, includes more advanced invoicing features like batched invoicing, automatic recurring invoicing and automatic charges for late payments.

Figure A.

Image: FreshBooks. FreshBooks' invoicing tool includes customizable templates, easy estimate-to-invoice conversion, payment acceptance, due date reminders and automatic late fee charges. Bank account and credit card syncing

Accounting software should automate redundant data entry by syncing with your bank accounts and tracking expenses in real time. Some accounting software services limit you to connecting one bank account and one credit card only. Others, such as Wave Accounting, include unlimited bank account and card connections.

Figure B.

Image: Wave Accounting. Wave Accounting connects with most banks and financial institutions, automatically importing expenses for easy bank reconciliation. Financial reporting

All accounting software should be capable of generating at least three essential accounting reports:

An income statement, also known as a profit and loss statement, which catalogs your business's total income and expenses over a given time period.

A cash flow statement, which shows where cash is flowing into and out of your business.

A balance sheet, which gives you a snapshot of your business's assets, liabilities and shareholder equity at a specific point in time.

Together, these three accounting reports give you and any stakeholders in your business (like banks and lenders) crucial information about your business's financial situation. Business owners, executives and shareholders use the information contained in these documents to maximize profits, minimize expenses and plan for a more profitable future.

Forecasting and budgeting

Accounting software does more than track your finances and categorize your expenses for tax time. Some plans and software programs, such as Xero's highest-tier plan, will also help you prepare for future growth with forecasting and budgeting features that help you determine the best way to meet your future financial goals.

Cash flow forecasting is typically considered a more advanced feature that comes with mid-tier and top-tier plans, not entry-level accounting software plans.

Figure C.

Image: Xero. Xero's accounting software dashboard includes an at-a-glance overview of your cash flow to ensure you always know how much money your business has and where your cash is going. Expense tracking and receipt scanning

Along with connecting to bank accounts to import and categorize your bank transactions in real time, accounting software should let you document other expenses, including employee expenses for reimbursement. For the most part, accounting software supports real-time receipt scanning and uploading so you always have an accurate financial record at your fingertips.

Bill management

While most accounting software should offer online payment acceptance with every plan, some also give you the ability to pay your own bills directly from your account. For the most part, bill management is considered a more advanced feature that comes with mid-tier plans and pricier accounting services only.

Third-party integrations

Ideally, accounting software should offer built-in integrations with other essential business software. The most common integrations are with payroll software, time-tracking apps and e-commerce solutions, but accounting software can also integrate with CRM, billing, budgeting, HR and other third-party software apps.

Some providers, including Wave Accounting, offer limited native integrations, though you can integrate any apps you want with a third-party solution like Zapier. Other accounting solutions, like Xero, offer more than 1,000 third-party integrations that can be seamlessly synced to its accounting software.

Mobile apps

Most modern accounting software tools now include mobile apps for easy, on-the-go financial tracking. Depending on the app, you should be able to see a quick overview of your financial health, track expenses, send invoices, accept payments and view basic financial reports from your phone or tablet.

How much does accounting software cost?

Generally speaking, the most affordable accounting software for freelancers, solopreneurs and other small-business owners starts at $0 to $25 a month for a basic plan. Mid-tier plans usually cost between $50 and $80 a month, and the most expensive plans generally run between $150 and $250 a month.

Naturally, the more features your accounting software offers and the more users it supports, the more expensive your monthly bill will be. Most (though not all) accounting software providers offer multiple plans so growing companies scale up to heftier software plans as they grow.

Additionally, while most cloud-based accounting services cost a monthly subscription fee, some providers (such as Zoho Books and FreshBooks) offer annual payment alternatives with discounts.

Lowest plan price Highest plan price Per-user fees Learn more Wave Accounting $0/mo. $0/mo. $0/mo. Try Wave Xero $13/mo. $70/mo. N/A Try Xero Zoho Books $0/mo. $240/mo.* $2.50/mo. Try Zoho Books QuickBooks Online $30/mo. $200/mo. N/A Try QuickBooks FreshBooks $17/mo. $55/mo. $11/mo. Try FreshBooks

*When billed annually.

Small-business accounting software companies typically list their pricing upfront. More complex accounting solutions for enterprises usually require a degree of customization that makes it hard to offer an upfront price.

Pros and cons of using accounting software Accounting software pros

Accounting software is a more affordable alternative to hiring an in-house team or outsourcing to a third party.Sole proprietors and new LLCs might not have the budget for a part-time CPA or full-time in-house bookkeeper. Accounting software can help new business owners gain their financial footing without requiring them to spend above their budget.

Accounting software makes financial tracking accessible to non-accountant business owners.Without a good grasp of basic accounting principles, it's next to impossible to run a successful business. With accounting software, it's possible to make sense of complicated financial data without a business finance degree.

Accounting software facilitates collaboration between business stakeholders.Cloud-based accounting software facilitates easy, secure data sharing between your business's financial stakeholders. Most accounting software includes free access for your accountant and allows for multiple users with customizable permissions, which means departments can get on the same financial page with relative ease.

Accounting software automates time-consuming data entry.Manual data entry is a time-consuming process with a high risk of user error. Since accounting software automatically imports and categorizes transactions, it drastically reduces the possibility of introduced errors.

Plus, with automated software, you don't have to spend hours a week entering expenses in spreadsheet cells or painstakingly updating a chart of accounts. Instead, your software does the heavy lifting so you can stick to managing daily business operations and expanding your profit margins.

Accounting software cons

Accounting software may have a steep learning curve.The best accounting software aims to simplify complex accounting processes for non-accountants, but that doesn't mean basic accounting principles are easy to pick up right off the bat. Plus, the software itself will likely take some getting used to, which means you'll have to spend at least some time setting it up and familiarizing yourself with its interface.

Accounting software can be expensive.Free accounting software is only an option for the smallest of businesses. As your business grows, you'll have to scale up to more robust — and more expensive — accounting software plans.

Choosing the right accounting software

Finding the right accounting software for your business can be an in-depth process that requires you to invest a good deal of time and energy upfront. However, putting in the work to find the best accounting software for your unique situation is well worth the effort. Follow these steps to get started.

1. List your accounting software priorities.

Before you start shopping for software, it's important to consider what you really want out of your accounting solution.

For instance, are you a service-based freelancer who needs solid mobile invoicing and expense categorization for easier end-of-year tax filing? Does your multi-member LLC need collaborative software that facilitates communication between stakeholders? Are you a first-time business owner looking for a simple solution with a relatively low learning curve and multiple plan options so you can scale to software with more features as you grow?

2. Determine which accounting features you can't live without.

Once you know broadly what you want out of your accounting system, it's easier to narrow down which software features you need to meet your business goals. Ask yourself questions like these to figure out what accounting features you need your software to include:

Do you need software with an app so you can analyze finances on the go, or do you tend to work from your laptop and can stick with a browser-only solution?

How important is it to you to find accounting software that integrates smoothly with other business software tools you already use?

Do you need a comprehensive general ledger and chart of accounts, or can you get by with basic income and expense tracking?

How many people will be collaborating with you on your accounting software program?

Do you want software that helps you manage bill payments, or are you happy with your current bill payment process?

3. Decide on an accounting budget.

Most accounting software providers are relatively straightforward about their starting prices, though more comprehensive programs for bigger businesses may require a custom quote. When budgeting for an accounting solution, make sure to consider the following:

Additional feels for extra users.

Discounts for paying annually instead of monthly.

Money-back guarantees.

Plan scalability.

4. Research the best accounting companies.

There's no shortage of accounting software providers to choose from, which can make the research process feel overwhelming at first.

Instead of vetting hundreds of potential options on your own, check out review round-ups of popular accounting software for businesses like yours. Our guide to the best accounting software for small businesses can help you get started.

5. Sign up for a free trial or schedule a free demo.

Most accounting software companies offer free trials. (The industry standard is usually 30 days or one month free.) Make sure to read the fine print when you sign up: Some software requires you to enter a credit card that will be charged automatically if you don't cancel by a certain date.

Enterprise-level accounting solutions tend not to offer free trials. Instead, interested parties should schedule a free demo with a sales representative. During the demo, you'll be able to ask specific questions about how the software could benefit your company.

6. Reevaluate as needed.

Once you've taken your potential accounting software solution for a test drive, you can sign up for your favorite product and get to work organizing your company's finances.

However, it's important to bear in mind that your business's financial software needs will change over time. If you outgrow your current accounting software, you can always switch to a different provider whose features better fit your trajectory for growth.

Frequently asked questions What's the most used accounting software?

Intuit QuickBooks Online is one of the most popular cloud-based accounting software services used by small, midsize and large businesses across the world. Other popular cloud-based accounting solutions include Sage Intacct, Xero, FreshBooks, NetSuite and Zoho Books.

Which software is most commonly used by accountants?

Many bookkeepers, CPAs and accounting firms use QuickBooks Online or Intuit QuickBooks Desktop, but Sage Intacct and Sage 50 are popular options as well. Many firms also use Xero, NetSuite and FreshBooks.

What is the best accounting software for small business?

Zoho Books is one of the most fully featured and scalable accounting solutions for small businesses. Its general ledger and chart of accounts are ideal for small-business owners new to bookkeeping, and it offers enough plans to support businesses scaling from startups to multi-entity companies.

However, the best accounting software for your business depends on your needs and budget. While Zoho Books could be a good fit for another company, your ideal accounting program might be an in-depth solution like Sage Intacct or a free tool like Wave.

Learn more about the best accounting solutions for all business types and sizes by reading our review of the year's best accounting apps and software.

Is accounting software expensive?

No, accounting software doesn't have to be expensive. Some accounting software, like Wave Accounting, is completely free. Alternatively, providers like Zoho Books offer a free plan for small businesses with an annual revenue below $50,000 USD.

Pricier solutions built for large enterprises with dozens of users can cost hundreds of dollars a month, but there are plenty of middle-ground options that start at less than $20, including Sage Accounting, FreshBooks and Xero.

Read next: Best Accounting Software for Multiple Businesses (TechRepublic)

Featured accounting solutions 1 QuickBooks

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QuickBooks from Intuit is a small business accounting software that allows companies to manage business anywhere, anytime. It presents organizations with a clear view of their profits without manual work and provides smart and user-friendly tools for the business.

Learn more about QuickBooks

2 Acumatica Cloud ERP

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Acumatica Cloud ERP offers powerful finance and business intelligence tools to streamline company-wide accounting processes. Track costs, control billing, and manage time/expenses with multi-currency support and powerful financial reports. Acumatica makes real-time financial data available anytime, anywhere, on any device. Harness this data to make informed accounting decisions, reduce workloads, close the books faster, accelerate growth, and transform how you do business in the digital economy.

Learn more about Acumatica Cloud ERP

The 6 Best Accounting Apps For 2023

Maintaining proper accounting and bookkeeping processes is vital to ensure the accuracy and prosperity of businesses. Today, accounting technology has been gaining traction for its ability to streamline business bookkeeping and decrease the time and effort spent on related tasks.

To help you navigate the packed accounting software market, we've created a list of software tools that we have identified as the optimal accounting solutions for businesses in 2023. This article takes an in-depth look into these seven best accounting solutions and their ideal use cases.

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Top accounting software comparison

Consider the software comparison chart below to identify the best accounting software solution for your business. This chart compares how the solutions covered in this article approach prominent accounting software features and their differing price points.

Starting price Expense tracking Invoicing capabilities Financial reporting User limits QuickBooks Online $30/mo. Yes Yes Yes 25 Try QuickBooks Zoho Books $0 for businesses with an annual revenue below $50K USD Yes Yes Yes Unlimited Try Zoho FreshBooks $17/mo. Yes Yes Yes Unlimited Try FreshBooks Xero $13/mo. Limited to the highest-cost plan Yes Yes Unlimited Try Xero Wave Accounting $0 Yes Yes Yes Unlimited Try Wave Everlance $0 Yes No Yes Unlimited Try Everlance Best accounting apps in 2023 QuickBooks Online: Best overall accounting app

Image: QuickBooks

If you're searching for a top accounting software solution for your business, you have likely heard of QuickBooks Online. This accounting software solution, created by Intuit QuickBooks, is a favorite of ours for its robust features, wide range of integrations and transparent pricing.

As a cloud-based system, QuickBooks Online offers plenty of capabilities for its users, including bank account reconciliation, customizable invoicing, income and expense tracking and more. Some noteworthy features include built-in time-tracking capabilities and cash flow forecasting.

QuickBooks Online is also a fan favorite among small businesses for its ease of use and price tiers, including different features for organizations of various sizes — including freelancers. That said, it comes at a higher price than some other options on this list, so businesses should take their budget into account when considering QuickBooks Online.

Pricing

QuickBooks Simple Start: $30 per month with access for one user.

QuickBooks Essentials: $60 per month with access for up to three users.

QuickBooks Plus: $90 per month with access for up to five users.

QuickBooks Advanced: $200 per month with access for up to 25 users.

New QuickBooks customers have the option of either locking in 50% off for their initial three months of use or signing up for a 30-day free trial of the software.

Features

Automatic recurring invoicing.

Access to QuickBooks Payments.

Customizable invoicing.

Mobile application.

Bookkeeping and accounting reports.

Cash flow forecasting.

Pros

Available in four plans to support the needs of small, midsize and large organizations.

Comes with a wide range of reports, with higher-tier plans providing in-depth insights.

Businesses can send an unlimited number of invoices to an unlimited number of clients.

Often provides perks to first time buyers, and right now new users can get a 30-day free trial or a three-month 50% discount.

Cons

Prices may be too high for smaller businesses with lower budgets.

QuickBooks Online plans instill limits on the number of users supported.

For more information, read the full QuickBooks Online review.

Zoho Books: Most comprehensive app

Image: Zoho Books

Zoho Books is another top solution we had to include on this list for its comprehensive features and capabilities. Businesses that choose this software for their accounting needs can streamline their workflows through its automation features and manage each of their financial aspects through this all-in-one tool.

Zoho Books enables users to manage multiple areas of their business finances, taxes, sales, purchases and everything in between. Businesses can also use Zapier extensions or built-in connections to integrate with third-party applications, making it a single source of truth to support each of their financial processes.

A stand-out feature of this software is the collaborative customer portal. This increases transparency between businesses and clients to support straightforward business processes and positive customer relations.

Pricing

Zoho Books offers a free version of their software for smaller businesses with an annual revenue below $50,000 USD. The paid plans are billed either month to month or yearly at a discounted rate.

Standard: $20 billed monthly or $15 per month billed yearly.

Professional: $50 billed monthly or $40 per month billed yearly.

Premium: $70 billed monthly or $60 per month billed yearly.

Elite: $150 billed monthly or $120 per month billed yearly.

Ultimate: $275 billed monthly or $240 per month billed yearly.

The base price of each plan includes a specific number of users; however, businesses can purchase additional users at $3 per user billed monthly or $8 per user per month billed annually.

Features

Quote and invoice creation.

Mobile apps.

Collaborative customer portal.

Sales tax compliant accounting.

Automatic bank feeds.

Exhaustive reports.

Pros

Growing organizations can choose between six price plans and adjust them to scale alongside their business needs.

Admins can customize their workflows and install transaction approvals within their processes to ensure accuracy.

A free solution is exclusive to businesses with an annual revenue below $50K USD.

Cons

Lower cost plans may not include some features such as cash flow forecasting and timesheet management.

The free version of Zoho Books is exclusive to small businesses with an annual revenue of below $50K USD.

For more information, read the full Zoho Books review.

FreshBooks: Best invoicing app

Image: FreshBooks

An important aspect of accounting software is invoicing, and businesses should choose solutions that will allow them to process sales appropriately. That said, FreshBooks's invoicing features make it an excellent software choice for freelancers and small businesses that provide services.

Its unlimited allowance of automated invoices and estimates means that services can be easily tracked and managed through this convenient tool. FreshBooks also includes features to facilitate on-time payments, including automated upcoming payment reminders and automatic late fees once the invoice becomes overdue.

Other significant aspects of this system include its built-in time-tracking and project-tracking tools that help to ensure error-free payment processes. And with four differently priced plans aimed towards freelancers, small businesses, midsize businesses and enterprises, any sized organization can find an option to meet their needs.

Pricing

Lite: $17 per month billed monthly or $204 billed yearly. Allows users to bill five clients per month.

Plus: $30 per month billed monthly or $360 billed yearly. Allows users to bill 50 clients per month.

Premium: $55 per month billed monthly or $660 billed yearly. Includes unlimited billable clients.

Select: Custom quote pricing for enterprises.

Features

Mileage tracking.

Project-based budgeting and billing.

Automatic expense tracking.

Collaborative client portals.

Sales tax tracking and reporting.

Pros

Includes features and capabilities to support reliable invoicing processes.

FreshBooks software has a user-friendly interface, and its mobile accounting app lets users keep track of their business financials on the go.

Ideal for service-oriented business organizations and freelancers.

Cons

Its capabilities may not be suitable for larger businesses or businesses that sell inventory.

All FreshBooks plans, apart from the Select plan, allow for just one user. Additional users can be purchased for the above-average cost of an additional $11 per month.

For more information, read the full Freshbooks review.

Xero: Best on-the-go profit tracking

Image: Xero

For busy users on the go, we have to suggest Xero. Xero offers tools and apps to help users process their accounting from anywhere. This software's convenience is also supported partly by its intuitive and user-friendly interface that's easy for users to navigate.

Xero's software helps businesses streamline their accounting with automatic data capturing and documentation management, so users don't miss a thing when tracking and reporting their finances. The solution's multicurrency support also facilitates easy reporting of international business activity.

Finally, it's worth mentioning that what this software lacks in built-in features, it makes up for through its integrations. Xero supports 1,000+ prebuilt connections with various accounting, e-commerce and payroll systems. Popular integration options include Hubdoc for document scanning and Gusto for payroll.

Pricing

Early: $13 per month and includes 20 invoices and five bills per month.

Growing: $37 per month and includes unlimited invoicing and bill entry.

Established: $70 per month and also includes unlimited invoicing and bill entry.

All plans allow the addition of unlimited users for no additional fee.

Features

Online file storage.

Bank reconciliation.

Basic inventory management tools.

Automatic data capturing.

Project tracking.

Customized invoicing.

Pros

Customizable accounting dashboard provides a comprehensive view of important business finances.

No limits on the number of users for any of its plans.

Mobile Xero Accounting App allows for easy on-the-go access.

Cons

Less expensive Xero plans limit the number of estimates created, bills managed and invoices that can be sent per month.

Xero doesn't support multibusiness use, so users must purchase separate accounts for each business they want to run accounting for.

For more information, read the full Xero review.

Wave Accounting: Best receipt scanner

Image: Wave

Wave Accounting is an entirely free income and expense tracking software that's an excellent option for businesses on a budget. However, the system's economic price point isn't the only aspect that makes it a great choice. It also provides excellent tools for users looking to optimize their financial tracking and reporting.

Businesses can easily maintain up-to-date transactions and financial snapshots within the system by connecting their bank accounts to Wave Accounting software. Expense management is streamlined and simplified through the receipt scanning feature that automatically categorizes business expenses.

Although Wave Accounting offers users optional add-on services, the base software is forever free. Cost-effective tools such as Wave Accounting's receipt scanner can be especially beneficial for small businesses and freelancers who want to stay on top of their financial management without breaking the bank.

Pricing

Wave Accounting is a forever-free software.

Features

Multibusiness management.

Customized invoicing.

Unlimited expense and income tracking.

Unlimited bank and credit card connections.

Automatic payment reminders.

Mobile App.

Pros

Free-for-life accounting software with inexpensive optional add-ons that aren't required to perform basic accounting tasks.

Very few limits on users' capabilities — it offers unlimited invoices, billable clients, invoice tracking, expense tracking, credit card connections and more.

Low learning curve for new users.

Cons

Does charge processing fees for taking payments, but these charges are standard with accounting software services.

Wave Accounting doesn't support any built-in connections with third-party apps.

For more information, read the full Wave Accounting review.

Everlance: Best mileage and expense tracking

Image: Everlance

Everlance is a nifty tool for accounting businesses looking to streamline their expense tracking automatically. Everlance manages expenses by connecting to banks, integrating credit cards and processing expense reports.

Businesses can also track their data efficiently through the Everlance mobile app, automatically tracking drivers' mileage using GPS. These features make it easy to submit, review and approve mileage and expense reports directly within the app so users can maintain accurate records.

Self-employed users and companies alike will enjoy the software's work expense tracking features, making processing reimbursements a breeze. The integrated solution is also beneficial come tax season, providing features to help with processing employee taxes, taxability reporting and managing compliance.

Pricing

Everlance offers its software to individual users and businesses through various pricing plans.

Plans for companies:

Occasional Driver: $0

Mileage Tracking and CPM Program: $12 per user billed monthly or $10 per user per month billed yearly.

Fixed & Variable Rate (FAVR) Program: $33 per user per month billed yearly.

Plans for individuals:

Free: $0

Premium: $8 billed monthly or $5 per user per month billed yearly.

Premium Plus: $12 billed monthly or $10 per month when you prepay for one year.

Features

Automatic mileage tracking.

Expense tracking.

Report approval flows.

IRS-compliant mileage logs.

Team reporting.

Pros

No limits on the number of supported users for any of its plans.

Auto-created expense reports with all plans.

Free plan with limited functionality.

Businesses can simplify their recordkeeping by establishing custom expense rules and automating their recurring expenses.

Cons

Free version doesn't integrate with users bank accounts or credit cards, as this feature is only included through the paid plans.

Free plans only provide automatic trip detection mileage tracking for the first 30 trips each month.

Key features of accounting software Expense tracking

A fundamental rule in business is that you must spend money to make money. Accounting solutions with expense tracking features help businesses manage their expenditures and ensure that their spending aligns with the company's goals. These tools allow businesses to track and categorize expenses, sync their spending data, and create expense reports. This feature enables them to keep track of their spending data and gain insights into how their spending impacts their financial health.

Invoicing capabilities More payroll coverage

Accounting software solutions offer features that facilitate the generation and processing of invoices. These tools can help businesses create customizable invoices, submit them to their clients and monitor their payment status. Many accounting solutions even allow users to send automatic reminders to clients with overdue invoice payments. These features are helpful in terms of tracking income finances and ensuring that the business is appropriately compensated.

Financial reporting

A robust accounting software system will provide tools and resources to support users in generating financial reports based on their business data. These reporting capabilities often include features for developing cash flow statements, balance sheets, income statements and other reports that reflect the business's financial standing. These reports are also often customizable, allowing users to create fine-tuned reports on their unique business scenarios.

Mobile applications

Business operations can occur anywhere and at any time. Mobile applications can enhance the flexibility of accounting solutions, allowing users to perform timely accounting actions while on the go. Using these systems through mobile applications can enable businesses to access their financial data and carry out expense tracking, invoicing and other financial management processes from anywhere.

Third-party integrations

A business' accounting software should be able to integrate seamlessly with the other solutions in their software stack. Systems with built-in connections with popular third-party business applications and software tools are best, as they can support data syncing between systems and help ensure accuracy in the information used for financial reporting.

How do I choose the best accounting software for my business?

Although QuickBooks Online is an impressive solution, there may be better options for your business's accounting needs. To identify the best accounting software solution for your business, consider the factors necessary for your organization's financial management and reporting. This can involve aspects such as the number of people that will need to use the software, the type of reports your organization would need to generate and any third-party integration needs.

For example, a business that offers local deliveries may benefit from the mileage tracking features included in Everlance. On the other hand, a solo entrepreneur who performs services could have more luck with an invoice-centric solution such as FreshBooks.

These requirements can help you narrow down the tools that can offer the most valuable features for your business. From here, you can consider your budget and scalability needs and choose a plan that will align with these requirements.

Methodology

This review is a technical piece based on compiled literature researched from relevant databases. The information provided within this article is gathered from vendor websites or based on an aggregate of user feedback to ensure a high-quality review.

Choosing The Right Small Business Accounting Software

Accounting software helps you track your accounts payable and expenses in one place.

Accounting software packages vary in size, capabilities and integrations.

When selecting accounting software, you should evaluate all offerings, including compliance, reporting, tracking and available add-ons.

This article is for small business owners or financial officers looking to incorporate accounting software into their operations.

One of your top priorities as a small business owner is keeping a close eye on the money you bring in and pay out. This is why it's critical to have the right accounting software. You need a program that helps you accomplish your daily accounting tasks, including recording payments, tracking expenses, invoicing customers and reconciling transactions. Your accounting software should also help you manage your business's financial health, allowing you to generate reports that analyze your business's performance from multiple angles.

Editor's note: Looking for information on accounting software for your business? Use the questionnaire below, and our vendor partners will contact you to provide you with the information and quotes you need.

We'll examine the factors involved in choosing accounting software for your small business and look at some excellent options. 

Primary factors to consider when choosing accounting software

Choosing the best accounting software for your business is challenging. Every program includes a different set of features, and most offer multiple pricing plans that vary in functionality, number of users and other aspects. 

To simplify your search, keep three primary factors in mind when selecting accounting software for your business.

Cost: Would you prefer inexpensive, basic accounting software or an application that costs more but includes extra features?

Usability: How many users must access the software? Do you prefer a cloud-based system you can access anywhere or desktop software? Do you need your accounting software to have a mobile app? What capabilities do you need the app to have?

Features: What do you need the accounting software to do? Do you need both accounts receivable and accounts payable tools? Which accounting reports do you need to generate? Do you need it to track inventory? Do you need it to include ancillary services, such as time tracking, project management,and payroll?

If you already know what you need and only want to see our recommendations, see our page for the best accounting software for small business.

Benefits of accounting software

Hiring an accounting professional or bookkeeper, or using an outside accounting firm, isn't always financially feasible. If your business is small, you may handle the accounting yourself with the right accounting software. 

Here are some advantages of using accounting software instead of hiring an accounting professional.

Time savings: You won't have to wait for someone else to complete the accounting tasks you require. With accounting software, you can do it yourself, with all the tools you'll need close at hand.

Automatic records: As new transactions occur, accounting software will dynamically create and maintain a comprehensive record of your organization's financial dealings to remain compliant with government and industry rules and regulations.

Higher accuracy: Accounting software reduces the chances of human error. This is because software can connect directly with your bank accounts, pulling transactions and other data to create detailed insights without the risk of typos or copy-and-paste errors.

One place for all financial tasks: Many accounting software vendors offer additional services, such as payroll and tax compliance, that can be conducted, tracked and monitored from the same platform.

Optimized payroll: With the right accounting software, you can automate your payroll activities so that benefits and taxes are calculated to provide accurate, prompt payment for every employee.  

Accounting software makes it easy to handle your financial tasks and is less expensive than hiring an accountant or bookkeeper.

How much does accounting software cost?

Accounting software varies in cost, depending on its features, the number of users it supports and other factors. Many of the best accounting software companies offer cloud-based software as a service rather than software licenses, so they charge a monthly subscription fee.

Accounting software as a service is usually quite reasonable. These packages usually offer multiple plans with paid tiers typically ranging from $10 to $40 per month. Organizations that have unique needs or require accounts for multiple users will have custom pricing plans, but even these plans are affordable. Of course, discounted rates are often available if you're willing to pay for the software annually rather than monthly.

More expensive plans often include advanced features such as expense reports and sales tracking, recurring invoices, project tracking, billing, automatic past-due reminders, team functions, advanced reporting capabilities, inventory tracking, and purchase orders. Many accounting software companies offer integrations to augment the software's capabilities or connect it to other business programs, sometimes at an additional cost.

Several companies offer a trial version of their accounting software, though they usually have basic features or limit the number of users, clients or transactions. Some free accounting software providers make their money from the add-on services they offer. These programs are helpful if your business is very small or you want to take the software for a more extended test run than the trial period allows.

Accounting software costs vary by the level of service you choose, the capabilities you need, and whether you choose cloud-based or desktop software.

What usability factors should you look for in accounting software?

To find the best accounting software for your business, you need to decide how and where you want to use it and if anyone else will be using the system. Here are some factors to consider.

Easy integration

Even the world's most feature-packed, reasonably priced accounting applications won't do your business much good if they don't integrate with your existing solutions, such as sales platforms, shipping systems and even payroll applications. By choosing accounting software that works with your existing solutions, you won't have any compatibility issues leading to potential time-consuming errors. 

Multi-user access

Most accounting programs allow you to invite other users to the system and control the data they see and the tasks they access. For instance, you may wish to give your business partner and accountant full access while allowing your employees to use the system only to track their time and invoice cust