Digital accounting is transforming the way finance departments work. Companies of all sizes and across different industries can benefit from accounting software to reduce manual work and optimize processes.

To help you choose the right tool for your business, we listed and compared the five most popular accounting software for SMEs.

 

1. QuickBooks Online

QuickBooks Online is an all-in-one accounting software that allows SMEs to optimize their bookkeeping processes and store their financial data safely in the cloud.

Since QuickBooks Online is a cloud-based solution, you can access it from anywhere and from any device. However, you will always need an Internet connection.

All QuickBooks plans allow users to track income and expenses, send unlimited invoices and quotes, track payments, and organize receipts. QuickBooks Online users also get access to free support and real-time dashboards.

A great thing about QuickBooks Online is that it integrates with over 650 popular e-commerce apps, online payment systems, and other tools that businesses use regularly. Examples include PayPal, Shopify, Square, eBay, and Wix.

Simple Start is the cheapest plan that QuickBooks Online offers, and it’s suitable for startups and individuals who run their businesses independently. With this plan, users can connect their bank to the system, invite up to two accountants to review their books, send customized invoices and quotes, and create basic reports.

For service businesses, QuickBooks recommends their Essentials plan. This plan is a tad more expensive since it allows companies to add up to three users, plus their accountant. What’s more, it also includes features such as time-tracking, recurring invoicing, and multi-currency.

For businesses that need to track inventory and projects, the QuickBooks Plus plan is more suitable. This plan includes all the features in the Essentials plan and allows you to add up to 5 users, plus your accountant.

Should you decide to give QuickBooks Online a try, you can request a 30-day free trial on their website.

 

2. Xero

Xero is a cloud-based accounting solution that helps small and medium-sized companies manage their day-to-day accounting processes in one place.

Like most accounting software, Xero allows users to create and send invoices, pay bills, manage receipts, keep track of income and expenses, and generate reports. It connects with your bank, so bank transaction data flows directly into the system. All Xero plans also include inventory tracking, and allow you to add as many users as you want.

The platform makes life easier for its users by integrating with numerous business tools such as Zapier, PayPal, HubSpot, Stripe, and Shopify.

However, their cheapest plan — Starter — limits the number of quotes and invoices you can send or approve to 20 per month. Also, the number of bills you can enter is 5 per month.

If you need to send more invoices or enter more bills, you will have to opt for their Standard plan or their Premium plan (if you also want to use multiple currencies).

Xero offers paid add-ons for submitting and managing expenses, tracking projects, and business analytics. You can purchase these as add-ons regardless of the plan you choose.

You can get a 30-day free trial of Xero to experience the product for yourself before committing to a purchase.

 

3. FreshBooks

FreshBooks is an accounting tool that provides invoicing, expense tracking, time tracking, and reporting for small business owners. The system also helps you reduce manual work by automating bank data imports.

Their most basic plan — Lite — allows you to send unlimited invoices to a maximum of five clients, set up recurring invoices, and track billable hours.

If you have over five billable clients, you can choose the Plus plan. With this plan, you can send unlimited invoices to up to 50 customers, automatically capture receipt data, and invite your accountant to review the books.

Do you need to send invoices to more than 50 customers? Then, the Premium plan is the one for you.

It’s important to mention that FreshBooks plans don’t include user accounts, so you will have to pay $10 per month for each account. Payroll management also comes at an extra cost.

FreshBooks integrates with over 100 apps, including Squarespace, HubSpot, Zapier, Zendesk, and WooCommerce.

If you want to test out FreshBooks, you can request a 30-day free trial.

 

4. Wave

This free accounting software allows companies to create and send invoices in any currency and track their income and expenses. Wave also provides bank data connections and recurring billing for repeat customers.

Users can grant access to their accountants and reduce manual data entry by integrating Wave with their favourite tools via Zapier or Automate.io.

 

5. Zoho Books

Small business owners can use Zoho Books to send estimates, invoice customers, set up recurring invoices, and import bank transaction data.

The free plan allows you to give access to one user plus your accountant. You can send unlimited invoices and estimates and easily collect online payments.

If your organization also needs to track billable hours and project expenses, you can opt for the paid Standard plan. This plan also lets you add up to three users.

Should you need additional features such as multi-currency handling, stock tracking, or recurring bills, Zoho Books also offers a Professional plan. Besides providing extra features, this plan also allows you to add up to 5 users.

To see how Zoho Books works, you can apply for a 14-day free trial.

 

Accounting software comparison

To give you a clear overview of the features included in their basic plan by each software provider, we compared them side-by-side in the table below.

Accounting software comparison
QuickBooks
Simple Start
Xero
Starter
FreshBooks
Lite
Wave Zoho Books
Free
Cloud-based
Users (included) 1 Unlimited 1 Unlimited 1
Invoices Unlimited 20/month Unlimited Unlimited 1000/year
Billable customers Unlimited Unlimited 5 Unlimited Unlimited
Quotes Unlimited Unlimited Unlimited Unlimited Unlimited
Bank reconciliation
Snap and manage receipts
Enter and manage vendor bills 5/month
Real-time dashboard
Basic reports
(Profit & loss, expense reports, balance sheet etc.)
Prebuilt integrations Over 650 integrations Over 1000 integrations Over 100 integrations 18 integrations
Accountant access
Recurring invoices
Payroll
Time tracking
Inventory tracking
Multiple currencies
Price €15/month €21/month €4.80/month Free Free

 

What is the best digital accounting system for your company?

All small and medium-sized businesses can benefit from accounting systems regardless of their industry. However, since different companies face different challenges, there’s no one-size-fits-all accounting software.

Therefore, the best accounting tool for your company is the one that fits your budget and meets the specific bookkeeping needs of your business and industry.

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