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The Best Online Accounting Software for Small Businesses in 2020

Updated: Aug 11, 2020

If you are a coach, consultant or freelancer running a small business, you need to manage your finances and having a good web-based application can help you stay on top your financial health. Online software options for small businesses have improved quite a bit over the past few years offering new timesaving features including automated bank feeds, easy connection to your banking accounts and integrations with third-party applications.

With all of the web-based software packages to choose from, how do small business owners, freelancers and start-ups decide? The technology helps to ease the pain of book-keeping and accounts for small business owners and provides a range of other benefits too.

The key to choosing the best online accounting software is to ensure it includes the features that matter most to you and your business. At a minimum, the program should have basic features such as being able to easily invoice customers, pay bills and vendors, integrate with your business bank and credit card accounts and show you detailed reports with an accurate, in-depth, and easy-to-use dashboard.

Here are some key questions to ask yourself:

Ask what kind of accounting reporting features do they have? You want to ensure they have a range of reports to help you measure the performance of your business and stay on top your finances.

  • Profit & Loss

  • Balance Sheet

  • General Ledger

  • Invoice & Expense Reporting

  • Trial Balance Bank Reconciliation

Can it link to your financial accounts? Seamless online payments and low transaction rates. How easy is it for clients to easily pay and what options do they offer? Does it have the ability to accept payments online and Payment Scheduling to keep you on track

Do they offer Payroll Services integrations? If you have employees having a payroll option allows to to prepare for tax season and stay on top of the filing for your local, state and federal taxes.

Can you categorize your expenses? Categorizing expenses will be helpful in keeping your company organized, for budgeting purposes as well as in assessing which expenses can be written off at tax time.

Can you customize the invoicing? As a business owner, you want to have a professional approach to invoicing your clients that you can add your logo and business brand. The invoicing should be flexible and allow you to offer clients their preferred payment options to help you get paid faster such as online ACH, credit card, Apple Pay or other needs.

  • Does the invoicing allow you to request a deposit?

  • Add billable hours?

  • Or charge by predetermined project timelines.

If your invoice is too descriptive with detailed terms & conditions you may find it hard to make the default template work for you. So if this is an important part of your business, you should check it out.

Can you add on team members or your bookkeeper or accountant? Being able to give your accountant access to the financial information and reports whenever they need it. This will help you to save time and maintain accuracy for your accounting entries and year-end adjustments.

Is the Dashboard easy to use? The dashboard should give you a quick glimpse of your business’ finances so you can see where you stand on expenses, profit and outstanding invoices. This should allow you to connect to your reports for a deeper dive into the status and details of activities.

How is their mobile application? Does it include all of the features found on the web version? Can you track time and receipts? Accept payments? The mobile app should give you the flexibility to work from anywhere.

Is there a fully functioning mobile version?

Most online accounting options also offer a mobile version, allowing you to access your accounts through your smartphone. However, in some cases, mobile versions have very limited functionality so it’s worth deciding before purchasing whether this will really be important for you.

Top small business accounting and invoicing options

Considering the needs of a small business, sole-proprietor or freelancer, here are three top options:

Fresh Books: It offers a well-rounded simple and exceptional user interface with advanced functionalities. The invoicing, accepting online payments and keeping track of expenses are all very easy to use. The bust reporting makes it easy to manage your finances, profit and loss statements, balance sheets and more. The software has customizable invoicing that connects directly to projects so you get paid easily and can even has ability to track time for individual project. The software can connect to your banking, accepts ACH transfers, as well as multiple integrations to other applications for payroll and 200+ other third party options. They have three plan options that include features increasing as the plan level increases. Check out my affiliate link to learn more about the advanced and easy to use features. FreshBooks

Quickbooks: This software combines all of the essential accounting tools including income and expense tracking, with customizable invoicing, ability to accept online payments, ACH transfers and QuickBooks Payments. Easy to connect your bank account to consolidate financial accounts. QuickBooks has advanced features for bank feed management tools, with ability to schedule invoices for the future, and employee-focused time tracking. Basic reporting includes profit and loss statements, balance sheets and expenses. This also has sales tax tracking, 1099 contractor management, and integrations with other third-party tools and apps. Popular integrations include Quickbooks Online Payroll and Intuit GoPayment. Click here for more info on affordable payment plans and integrations: QuickBooks

Wave: A robust, but free cloud-based small business accounting and invoicing tool, and their primary accounting services are at no cost but they offer extras and paid add-ons such as payroll or payment processing to enhance the services. Their focus is the small business freelancer or sole proprietor model. The software does allow connection to your financial accounts and lets you download both personal and business transactions, separating them for bookkeeping purposes. Their easy to use dashboard displays invoices, income and expenses and transactions. Wave offers a multitude of third-party integrations and add-on financial services. To see the full site go to: WaveApps

Deciding which one will best serve your business depends on your overall business model.

Both FreshBooks and QuickBooks options will serve your business well and continue to add new features and upgrades. FreshBooks focuses more on the self-employed, freelancer or contract professional who are more service based, while QuickBooks is directed more toward businesses with products or retail platforms. And both have mobile-friendly apps while Wave does not have a comprehensive mobile app.

With the advances in technology, getting an exceptional small business-friendly accounting software for is easy. By using an online accounting application you can stay up to date and view your records wherever you are. This ensures you maintain correct and accurate financial information at all times. Having a solid accounting foundation is key to growing your company. Each these options have their own characteristics and features. You’ll want to match the one that is right for your business.


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