Best Accounting Software 2021

Accounting software is built to help companies of all sizes to manage their sales, expenses, and financial outlook. There are solutions designed for companies within specific industries as well as general tools that many different kinds of businesses can utilize. The accounting software space includes platforms that are designed for freelancers and very small businesses, like FreshBooks, as well as solutions that are better for larger businesses, like QuickBooks Online.

These solutions offer features like invoicing, expense tracking, inventory management, accounting reports, account reconciliation, payment processing, and bookkeeping services. While you'll utilize the software to add relevant business information, you will also give your accountant and bookkeeper access to the software, where they'll provide expert services and reconcile your accounts.

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Highest Rated Accounting Software

Different software vendors build solutions for freelancers, small businesses, and larger businesses. All the tools we've reviewed are industry-agnostic, meaning that they're relevant for businesses of all types.

QuickBooks Online
Rating: 94
Starting Price: $25 per month

QuickBooks online is the most popular accounting tool for small businesses. It includes all features a small business needs to keep track of its financials, and most accountants are very familiar with using the tool. QuickBooks Online has over 70 financial reports, integrations with many third-party tools, and a powerful payroll add-on.

Pros:
  • Best overall accounting platform for most small businesses
  • Most accountants and bookkeepers are trained in using QuickBooks
  • More than 70 reports included - the most of any accounting software
  • Allows multiple users to access the system at the same time, and work simultaneously
Cons:
  • Customers report that the software is not as user-friendly as other accounting tools
  • More expensive than other accounting platforms
  • Learning how to best navigate the application takes time
  • History tracking (audit log) is difficult to use
Xero
Rating: 91
Starting Price: $11 per month

Xero is an accounting software that's used by more 2 million customers worldwide. It includes all essential accounting features like reporting, invoicing, inventory management, and tax form generation. It's a great option for most small and medium businesses in any industry.

Pros:
  • The software is as equally accessible to business owners as it is to accountants
  • Connections with over 800 third-party software applications available in the Xero Marketplace
  • The software has a great balance of being advanced yet user-friendly
Cons:
  • The reporting section is a bit thin compared with reporting in QuickBooks Online
  • Slightly difficult to get in touch with the customer support team
  • Reports did not always generate on demand
Zoho Books
Rating: 89
Starting Price: $20 per month

Zoho Books is an accounting software designed for small and medium businesses. Its standout features are its invoicing templates and vast number of financial reports. We recommend Zoho Books for those who need inventory management features.

Pros:
  • Significantly more detailed and functional than alternatives
  • More than 50 financial reports and 16 invoicing templates included
  • Advanced automation and workflow rules that'll save time
Cons:
  • More difficult to learn to user than simpler accounting tools like FreshBooks
  • Less popular among accountants than QuickBooks and Xero
  • Free trial is 14 days, and most alternatives offer a 30-day trial
Bench
Rating: 87
Starting Price: $159 per month

Bench is a software-enabled bookkeeping service with around 10,000 customers. It offers both bookkeeping and tax services for small businesses at reasonable monthly prices.

Pros:
  • Bench offers catch-up bookkeeping services for businesses that have fallen behind
  • Tax advisory services come at a very reasonable monthly price
  • You can add your personal accountant to your Bench account
Cons:
  • Business owners have relatively little control over the software where financial work is being done
  • Reporting section is very limited compared with competitors
  • You cannot use Bench if you reside outside the United States
FreshBooks
Rating: 86
Starting Price: $15 per month

FreshBooks is the most user-friendly accounting software for beginners and freelancers. With features like invoicing, receipt capture, and expense tracking, it's a great first accounting tool to use when you're starting your business.

Pros:
  • One of the easiest accounting software tools to use
  • Very quick to set up and implement
  • Receipt capture feature is notably easy to use
Cons:
  • Plans have user limits and additional users cost extra
  • Lacking advanced inventory management features
  • Limited templates and customization options
Wave
Rating: 86
Starting Price: Free

Wave is an accounting tool for invoicing, expense tracking, and payroll functionality. Wave is the best freemium tool on the market, and we recommend it for those who want accounting features for free.

Pros:
  • Wave offers features for free that most alternatives charge for
  • Extremely well-built and user-friendly interface
  • Wave offers bookkeeping services for those without a dedicated bookkeeper
Cons:
  • It's very difficult to get in touch with the Wave support team
  • Payroll comes at an additional monthly cost
  • Lacking inventory management features that many businesses require
Sage Business Cloud
Rating: 83
Starting Price: $10 per month

Sage Business Cloud is a mid-tier accounting software designed for small businesses. Its main features include invoicing, expense tracking, and accounting reports. Overall, Sage Business Cloud is a very user-friendly tool, but is not as nuanced or cost-effective as other accounting software products.

Pros:
  • Pricing is capped at $25 per month, making the software very affordable
  • Sage allows customers to create advanced, customized reports
  • Cash flow forecast graph provides 30-day visibility into expected cash balance
Cons:
  • Features like payroll and time tracking must be purchased through third-party applications
  • Sage offers fewer payment gateway options than other accounting tools, which limits payment options for customer invoices
  • Application can sometimes take a long time to load

Accounting Software Prices

Accounting software can range from free to upwards of $200 per month. Here are some details that will help you compare prices for the most popular accounting platforms.

Software VendorStarting Monthly PriceFree Trial
WaveFreeYes
Sage Business Cloud$10Yes
Xero$11Yes
FreshBooks$15Yes
Zoho Books$20Yes
QuickBooks Online$25Yes
Bench$159Yes

Accounting Software FAQs

Accounting software is technology that allows companies to manage their financials. This involves sending invoices to customers, collecting payments online, tracking company expenses, and balancing books to ensure a hassle-free accounting experience.

The short answer is that every business needs to do bookkeeping or accounting of some sort. You need to have your financial records in order come tax time, and it’s good practice to consistently check in on your company’s financial standing.

This depends on your budget and type of business. If you’re a freelancer or very small service-based business, Wave and FreshBooks are reliable options. If you’re a small or medium business and need to keep track of inventory, QuickBooks Online, Xero, or Zoho Books will be best for you.

The most popular accounting tools for small businesses are QuickBooks Online, Xero, and Wave.

The most common live chat software features are:

  • Accounting Reports
  • Invoicing
  • Expense Tracking
  • Inventory Management
  • Payment Processing
  • Customer CRM
  • Vendor CRM
  • Payroll
  • Tax Form Generation
  • Time Tracking
  • Receipt Capture

Accounting Software Research & Advice

Xero Competitors & Alternatives

By Katelyn Anderson |

Are you considering Xero to manage accounting for your business? Before choosing a software, it’s important to learn about other accounting...Read More >

FreshBooks vs. QuickBooks Online

By Katelyn Anderson |

Is FreshBooks or QuickBooks Online the better solution for you? This in-depth, feature-by-feature breakdown will help you select the best...Read More >

Wave vs. QuickBooks Online

By Katelyn Anderson |

Is Wave or QuickBooks Online the better solution for you? This in-depth, feature-by-feature breakdown will help you select the best...Read More >

Zoho Books vs. Xero

By Katelyn Anderson |

Is Zoho Books or Xero the better solution for you? This in-depth, feature-by-feature breakdown will help you select the best accounting...Read More >

QuickBooks Online vs. Xero

By Katelyn Anderson |

Is QuickBooks Online or Xero the better solution for you? This in-depth, feature-by-feature breakdown will help you select the best...Read More >

FreshBooks vs. Wave

By Katelyn Anderson |

Is FreshBooks or Wave the better solution for you? This in-depth, feature-by-feature breakdown will help you select the best accounting...Read More >

Xero vs. FreshBooks

By Katelyn Anderson |

Is Xero or FreshBooks the better solution for you? This in-depth, feature-by-feature breakdown will help you select the best accounting...Read More >

Why You Should Trust Our Recommendations

The team at SoftwarePundit has been testing software since 2017. We’ve hand-tested over 250 software products in that time, including 8 in the accounting category. We applied the same rigorous process to each piece of accounting software that we analyzed. The specifics of our accounting category research process are outlined below.

Katelyn led our analysis of accounting software. She has spent more than 300 hours evaluating leading accounting software systems. To test the tools, she set up trials of each tool, created and sent test invoices, and tested key user flows. She also spoke with each of the companies to hear about their value propositions and spoke with professional CPAs and bookkeepers to get their input on tools.

In addition, all research and content was overseen by Bruce Hogan, SoftwarePundit’s Co-founder & CEO. Bruce has more than a decade of experience researching, building, and reviewing the world’s best software products. His technology advice has been featured on a wide range of media sites such as AngelList, CMSWire, Dental Economics, iPhone Life, Reader’s Digest, Thrive Global, U.S. News, and the Zapier Blog.

How We Selected the Best Accounting Software

We selected the best accounting software tools to review based upon a number of criteria. The most important criteria were each software tool’s features, usability, price, and customer support. The details of our analyses are captured in the in-depth reviews we publish about each software tool.

There are a handful of critical features that you should look for in accounting software. We prioritized the following features in our analysis:

  • Accounting Reports
  • Invoicing
  • Payment Processing
  • Inventory Management
  • Expense Tracking
  • Vendor and Customer CRM
  • Payroll & Time Tracking

How We Evaluated Accounting Software

We used the same rigorous process to evaluate accounting software as all other software categories. For the accounting category, Katelyn invested several weeks researching, testing, and writing about the tools.

We interviewed the teams at the software companies listed above. Our conversations with the companies included questions about each company’s product, customer base, pricing, customer support, and business strength. After a general interview, Katelyn spent additional time participating in a product demo led by each company. This provided Katelyn with the opportunity to ask detailed questions about the features and functionality of the accounting software. She asked questions about each company’s target market, their best features, and more.

Katelyn also obtained a free trial of each software tool listed above. She spent several hours testing the key user journeys in each software product. This allowed us to validate the features offered by each product, and to gain an understanding of the software’s usability.

In addition to conducting conversations with the software companies and hand-testing every platform, Katelyn also spent dozens of hours consulting industry experts and interviewing real customers of the software tools listed above.

Industry Experts

  • Cheree Hill: Cheree Hill is the owner of Tranquility Bookkeeping Services and uses Xero with all of her clients.
  • Graham Davies: Graham Davies is the founder of Addition Finance, a professional bookkeeping service. He and his team use Xero for their customers, who are small business owners across many industries.
  • May Jiang, CPA, CFP®: May is a Certified Public Accountant (CPA) and a Certified Financial Planner at Offit Advisors. All clients at their financial services firm are onboarded with QuickBooks.

Accounting Software Customers

  • Apryl Syed: Apryl is the founder of a consulting business called Apryl Syed Consulting. She’s used a variety of accounting tools like NetSuite, Sage, and QuickBooks.
  • Gilad Rom: Gilad is the founder and CEO of Huan. He currently uses Zoho Books to handle accounting for his business and used Sage Business Cloud in the past.
  • Nick Chernets: Nick currently uses Sage to manage accounting for his business, DataForSEO. He has also used QuickBooks Online in the past.
  • Mark Hayes: Mark is the head of marketing at Kintell. The company currently uses Wave to pay their team of freelancers.
  • Cole Torres: Cole is the owner of Local Eye Media. He currently uses Wave for his accounting purposes.