It’s safe to say that accounting software makes life a whole lot easier for small business owners and accountants. It can automate invoicing, reporting, billing, and account reconciliation. As a result, it can save most people a ton of time and money.

Today, my focus is to help you identify and choose the right accounting software for you. This guide is based on my personal experience as a small business owner. It also comes from my observations after testing and comparing dozens of bookkeeping solutions.

I want to emphasize something important. I’ve created this comparison guide from the perspective of a small business owner, not an accountant. I run multiple small businesses, but I’m far from being an accountant myself.

Note: this article may contain affiliate links, meaning I could earn a small commission if you sign up through one, at no extra cost to you.

Xero

Xero is one of my favorite all-in-one cloud-based accounting solutions for small and medium-sized businesses. It reportedly has over 4.4 million users in over 180 countries. This makes it a globally recognized and popular business accounting solution in the small business space.

I love how Xero has a clean and intuitive user interface. This design makes it easy to use, even for non-technical users. For example, you can simply customize the dashboard widgets the way you like, based on the daily snapshot reporting that matters most to you. It’s also easy to locate and generate the reports you’re after.

In my view, what makes Xero stand out from other bookkeeping and accounting software is its essential integrations and extensive app marketplace. This allows users to easily connect Xero to other important tools they use daily, like their CRM, project management, and booking tools. It also connects with website platforms like WordPress, Shopify, Wix, and others.

As a result, transaction data flows automatically from your external tools into Xero. This eliminates manual data entry. Also, Xero reportedly integrates with over 21,000 financial institutions. So, you can likely connect your bank feeds with Xero for semi-automatic account reconciliation. Xero makes this process simple, which saves you a ton of time.

Other powerful tools inside Xero make it a fantastic, centralized bookkeeping solution. These include automatic invoicing and payment capturing options, which help you capture payments quickly and on time. You’ll also find automatic billing, purchase orders, dynamic reporting, product and service tracking, payroll, and project management tools.

Keep in mind that prices vary slightly by region. Xero is not cheap, since it’s a premium product, and businesses pay per month. In my opinion, something small business owners may find frustrating is the increasing subscription price, which seems to happen too often. Still, Xero is a powerful option for small and medium enterprises that will grow with your team and business.

QuickBooks

Similar to Xero, QuickBooks is a popular cloud-based accounting solution for small businesses. It reportedly serves over 7.7 million customers globally. QuickBooks is designed for businesses of all shapes and sizes.

From my perspective, QuickBooks is sleek and relatively intuitive to navigate. However, it can easily overwhelm those who are just looking for accounting basics. Like Xero, QuickBooks offers hundreds of integrations with third-party apps.

That said, there’s an important difference between the two platforms. With QuickBooks, you’ll typically need a third-party connector app, like Zapier or Make, to link up with other tools. Xero’s marketplace, on the other hand, offers more built-in app integrations. Overall, QuickBooks and Xero are very similar. This linked guide will give you a detailed and clear comparison between the two.

With QuickBooks, you can easily track income and expenses, send and automate invoices and quotes, and automate account reconciliation. You also get access to detailed reporting and insights. Beyond bookkeeping, QuickBooks offers tools like inventory management, email marketing, and payment solutions as part of the broader Intuit ecosystem.

One unique feature I love is the ability to send invoices via WhatsApp. This is especially powerful in countries that rely heavily on WhatsApp for communication, particularly businesses in Southeast Asia.

Each plan is a subscription, and unfortunately, the price tends to increase often, similar to Xero’s pricing. There’s another setback for small businesses too. If you want to send automatic invoices and set up recurring payments, you’ll need to upgrade to the Plus plan. This plan is relatively expensive and unaffordable for most new or micro businesses. In my opinion, QuickBooks works best for medium to large enterprises or businesses with complex accounting needs.

Sheetify Bookkeeping

This is a simple yet impactful accounting solution that I created for small businesses. Sheetify Bookkeeping is built with Google Sheets and Apps Script. It’s ideal for small business owners who already have a paid or free Google account.

Think of it as an alternative, one-time payment bookkeeping solution. It’s designed for small and micro business owners who hate paying for increasing subscriptions and just need something simple, without the fluff. Sheetify Bookkeeping is easy to use, especially if you already have some experience with spreadsheets.

This Google Sheets bookkeeping template lets you track and manage income and expenses. You also get access to seven dynamic dashboards, tools to manage accounting tasks, and the ability to generate invoices and quotes. That said, built-in automations and integrations are limited.

However, you can use third-party tools like Zapier or Make to connect with other apps. We also offer a CRM and project management toolkit that connects with Sheetify Bookkeeping. This works through our free Google Workspace add-on, called Sheetify Flow.

We’re also launching an AI receipt scanner and expense tracker app soon. It will be free for Sheetify Bookkeeping users, letting you quickly scan and upload receipts to both Sheetify Bookkeeping and Google Drive.

As for pricing, Sheetify Bookkeeping is a one-time payment, with no subscription required. This gives you lifetime access and all future updates. Overall, Sheetify Bookkeeping is ideal for micro and small business owners who want a simple accounting solution without the fluff.

Zoho Books

Zoho Books is part of Zoho’s huge business ecosystem of tools and apps. It has an easy-to-use interface, similar to QuickBooks. However, I think Zoho Books is slightly more intuitive.

Like QuickBooks and Xero, you can easily connect bank accounts for automatic transaction reconciliation. Unfortunately, Zoho Books doesn’t offer as many native financial institution connections as Xero and QuickBooks. It does have third-party connections, but fewer native ones.

One thing I really like about Zoho Books is how seamlessly it integrates with other Zoho apps. This allows data to flow smoothly between tools like Zoho Inventory, Zoho CRM, and Zoho Books. You’ll also find the standard bookkeeping functionality we mentioned with Xero and QuickBooks.

Beyond that, Zoho Books includes impactful modules that improve how you manage certain workflows. For example, you can automatically send quotes, and customers can accept them while payments are captured automatically. You’ll also get access to complementary tools like payroll, time tracking, and inventory.

When it comes to pricing, Zoho Books is more affordable than Xero and QuickBooks. It offers a completely free plan, plus reasonable pricing as your needs grow. I’d recommend Zoho Books if you already use Zoho products, or if you’re considering adopting more of them into your business.

FreshBooks

FreshBooks reportedly has over 30 million small businesses using the platform. Like other bookkeeping software, it’s a cloud-based solution that focuses on simplicity and ease of use. In my experience, FreshBooks is on par with Xero when it comes to ease of use and adoption.

FreshBooks is specifically built for service-based businesses and freelancers. In terms of apps and integrations, it offers fewer native options compared to Xero and QuickBooks. However, just like with Sheetify and Zoho, you can connect Zapier to link up with third-party tools. FreshBooks is also part of the Freshworks ecosystem, so it works seamlessly with other Freshworks products. Like Zoho Books, FreshBooks covers all the accounting fundamentals you need.

Standout features, like the built-in time tracker, are vital for service-based businesses. The built-in project management tool is also handy, since it integrates directly with your accounting activity.

FreshBooks pricing runs similar to Xero and QuickBooks, with relatively high monthly subscriptions. On the Lite and Plus plans, you’re limited by the number of invoices you can send, based on your number of customers. This often pushes small business owners toward the premium plan, which can get expensive for new or micro businesses.

Personally, I’d recommend FreshBooks to high-ticket, service-based businesses with a large customer base. If you’re a small freelancer with a short client list, the lower-tier plan should work just fine for you.