In last week’s blog, we talked about what to look for in accounting software. With so many software products out there, it can be pretty overwhelming as a small business owner to figure out which one is best for your needs. And with an actual business to run, do you really have time to wade through all of the options?
At Patrick Accounting, this is the sort of thing we do all the time. So if you haven’t checked it out yet, take a minute and read Part 1: How to Choose Accounting Software for Your Business.
Back already? Great! Let’s dive in to Part 2:
Comparing the Top 3 Software Options for Small Business Accounting
There are shelves and shelves of ketchup varieties at your grocery store, but there are only two or three really big names in what used to be America’s favorite condiment. (Salsa took that title years ago, but that’s a story for another time.)
Accounting software is the same. There are plenty of varieties available, and, like ketchup, some of the niche “flavors” are perfect if you’re looking to meet a very specific need.
But three names consistently rise to the top:
- Freshbooks
- Quickbooks
- and Xero
They all are cloud-based and offer basic accounting features, but each one shines in different areas. So you may find that one is a better fit than the others for the specific needs of your small business.
We did some homework on each one, so you don’t have to. Hopefully, our summaries below will help you find the right one for you.
For this comparison, we focused on four areas:
- Price
- Useability
- Features
- Integration
Freshbooks – ideal for freelancers or solopreneurs
- Price – Three plans (Lite, Plus, & Premium) ranging from $15-50/month, based on the number of clients.
If you opt for an annual subscription, instead of monthly, you can save 10%. See Freshbooks Pricing page for all of the details. - Useability – Simple to get started, extremely user-friendly interface. Easy to find the functions you are looking for. You can also easily import existing data via spreadsheets.
Invoices are clear and simple to understand. They provide a couple of basic styles, which you can brand for your business.
Expense tracking only takes a couple of clicks. Nothing difficult to sort through.
- Features – All plans include unlimited invoices, time tracking and expense tracking. Plus and Premium plans add late payment reminders and late fees.
- Integration – There are 21 different categories of apps on Freshbook’s Apps & Integrations Page…major players you may already be using like Paypal, Asana, and Hubspot, to name a few.
Quickbooks – good for a small-to-medium business with a handful of users
- Price – Four plans (Self-employed, Simple Start, Essentials, and Plus) ranging from $10-60/month*. Based on 1-5 users.
Payroll features can be added for $39/month or $99/month, depending on your level of need.
*Prices above are at the discounted rate of 50% off for the first three months. They double after that, or you can sign on at the full price and take a free 30-day test drive. See the Quickbooks Pricing page for the fine print.
- Useability – It may take a while to get the software up and running as it walks you through a series of questions, but the result is a fairly customized interface for your business.
Brick-and-mortar businesses can process in-person payments seamlessly using Quickbooks’ mobile card readers. You can receive a device that accepts chip and stripe payments at no extra charge, but if you also want to take Apple, Android and Samsung Pay the cost is $49. Processing fees apply.
- Features – All plans include: income and expenses, invoices/payments. Self-employed (geared towards freelancers) includes quarterly tax estimates. Simple Start (designed for solo/small product-based businesses) includes tax deductions and sales tax. Essentials & Plus plans add time tracking, bill pay, project and inventory tracking and 1099 management.
- Integration – Pairs well with TurboTax
Xero – heavy-duty software with lots of options designed for larger businesses that need bells and whistles.
- Pricing – Five plans (Starter, Standard, Premium 10/20/100) ranging from $9-180/month based on how many people you have on payroll.
Starting November 1, 2018, Xero is simplifying their pricing to three tiers:
- Starting – $9/mo.
- Growing – $30/mo.
- Established – $60/mo.
See the Current Xero Pricing page and the New Xero Pricing page for full details.
- Useability – This is the most complicated of the three options, but the set-up wizard will help you each step of the way (even if it does take a while). To import existing data, you need to download their templates, format your information to match, then reupload them. It’s an extra step, but worth the effort if you have a lot of customer and transaction data.
They offer completely customizable invoice options. Design it through their site, or upload your own.
- Features
–Starter – five invoices, five bills, 20 transactions
-Standard – Unlimited invoices, bills, and transactions
-Premium 10/20/100 – Standard + international currencies
- Integration – 700+ apps in their App Marketplace representing third party companies that they work well with.
The Bottom Line
Use Freshbooks if you are a freelancer or ultra-small business that doesn’t require a lot of tools or reports.
Use Quickbooks if you are small- to medium-sized business that processes in-person payments.
Use Xero if you are a small- to medium-size business with a slightly more complex set-up, multiple employees, and handle a wide range of transactions.
Regardless of which accounting software you ultimately decide to use, remember that Patrick Accounting is ready to partner with you and help you with all of your accounting and payroll needs. Whether you do it all yourself and consult with us from time to time, or you go completely hands-off and just tell us to “make it happen”…we can do it!
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