4 Bookkeeping Platforms for Small Businesses
Record-keeping is a hugely important and often underrated part of running a small business, and it’s particularly important to keep good financial records. If you don’t track money in and money out, then building a profitable business is a far greater challenge. What’s more, IRS regulations require businesses to track income and expenses at the very least.
The good news is that technology has made bookkeeping far easier than it was in the days of paper ledgers. While you can keep the business’s books in a simple Excel spreadsheet, setting up a more professional option can be time and money well spent because these platforms will grow with your business. You can start with a simple subscription plan and then shift to a more full-featured one within the same platform as your needs grow, so you won’t have to go through the hassle of re-building your books and learning a new system every few years.
1. Intuit QuickBooks
QuickBooks is the best-known option in the small business bookkeeping software industry. It’s dominated the field for decades, although recent years have seen an influx of competitors who are beginning to nibble away at Intuit’s market share. It’s one of the best options for small businesses, but also tends to be the most expensive.
This platform comes in both desktop and online versions, although the latter has definitely seen more focus and development work from Intuit and is a better choice for most businesses. QuickBooks is available in a range of different forms, from the cheap but extremely limited Self Employed to the relatively robust (but significantly pricier) Advanced package. This makes it easy for very small businesses to start with a basic version of QuickBooks and upgrade as they grow.
Within the last few years, QuickBooks added a basic inventory management system that makes it far more useful for retail businesses. Inventory management is available in QuickBooks Plus and Advanced.
Integration options: QuickBooks syncs with over 650 different apps, including Square, PayPal, and Shopify. You can also link the program with bank accounts and credit cards to automatically import transactions.
Like QuickBooks, Xero is a small business accounting software package. The two have similar functionality, expecially now that Xero has added a full-service payroll option for all 50 states. Its built-in inventory management system is basic, but adequate for most businesses. Xero lacks built-in time tracking and project management tools, making it somewhat less useful for service businesses (though you can get such tools through integrated apps).
Price: The starter package is a mere $11 per month, but only allows users to send up to 20 invoices per month, which is not enough for most small businesses. Xero’s standard package costs $32 per month and allows unlimited invoices; the premium package, at $62 per month, adds multicurrency support.
Integration options: Xero’s app marketplace lists over 700 different apps that integrate with the program, including Gusto, Square, and Expensify. Like QuickBooks, Xero can also import bank account and other transactions automatically.
Freshbooks went through some big changes a few years back, revamping its product and adding several new features to make it more competitive. Existing Freshbooks customers can still access the old version of the product, now titled Freshbooks Classic; new customers are limited to the new version of the product. Both versions of Freshbooks are designed for solopreneurs and micro businesses. The platform works well for such businesses, particularly for invoicing, but lacks features that larger businesses would need. If you expect your business to grow in the near future, you’d be better off with a more robust bookkeeping option.
Price: Freshbooks costs $15 per month for up to 5 active clients, $25 per month for up to 50 clients, and $50 per month for up to 500 clients.
Integration options: The FreshBooks Apps & Integrations page lists about 100 different apps, including Gusto, Salesforce and Slack. Freshbooks also now supports automatic bank reconciliation.
4. Zoho Books
Zoho Books is one of the least expensive cloud bookkeeping software packages, and it’s also one of the most user-friendly. However, it doesn’t support payroll integration – a potential deal-breaker for businesses with employees.
Where Zoho Books really shines is in its basic bookkeeping functions, particularly inventory management (which tends to be a weak point for other small business bookkeeping systems). Zoho Books also has a terrific automation feature called “workflows,” which are basically macros that you can set up to assign tasks and/or send notifications at predetermined events.
Price: Zoho Books is subscription only; prices range from $9 per month for the basic platform to $29 per month for the most advanced version.
Integration options: Not surprisingly, Zoho Books integrates easily with other Zoho products (including Zoho CRM and Zoho Expense). In addition to a number of direct app integrations, Zoho Books can also integrate with Zapier – giving users access to Zapier’s galaxy of apps.
Choosing the right bookkeeping platform
Setting up a new bookkeeping system is a hassle and can be disruptive to the flow of your business, so when you’re picking one it’s important to consider not just what you need now but also what you will need in the near future. For example, if you have no employees but plan to hire a few within the next five years, it’s wise to pick a bookkeeping system that supports or integrates with a solid payroll service. You want a small business bookkeeping platform that will support your needs until you’re ready to move up to an enterprise version… at which point you can hire a consultant to manage the transition for you!