If you’re running a small business, bookkeeping software can be a huge help in keeping your finances in order. But with so many different options on the market, it can be tough to decide which one is right for you.
In this article, we’ll compare three of the most popular bookkeeping software programs—QuickBooks, Xero, and FreshBooks—to help you make the best decision for your business.
What to Look for in Bookkeeping Software
When you’re choosing bookkeeping software for your business, there are a few key features to look for:
- Ease of Use: You want software that’s easy to use and understand, so you don’t waste time trying to figure out how it works.
- Affordability: Make sure the software is affordable for your business—you don’t want to break the bank just to keep your finances in order.
- Integrations: Look for software that integrates with other programs you’re using, like your invoicing system. This will make it easier to keep all of your financial information in one place.
- Customer Support: Choose a program that offers excellent customer support in case you have any questions or run into any problems.
These are some of the most common features you should consider, but there are much deeper functions that you need to take into account. We’ll explore these in greater detail below:
Payroll Management
One of the most important functions of bookkeeping software is payroll management. This includes tracking employee hours, calculating payroll taxes, and issuing payments.
This is a much-needed feature for many business owners, and understandably so. After all, dealing with payroll can be a huge headache.
But not all bookkeeping software programs offer payroll management. So if this is a feature you need, make sure to look for it when you’re choosing a program.
Inventory Tracking
Another important function of bookkeeping software is inventory tracking. This helps you keep track of the products you have in stock, so you can see when you need to order more.
This is especially important if you run a retail business or e-commerce store. It can also be helpful for businesses that sell services, as well as those that use inventory in their production process.
Budgeting and Forecasting
Budgeting and forecasting are other important functions of bookkeeping software. This helps you plan for future expenses and make sure you have the money you need to cover them.
This is a critical feature for any business, as it can help you avoid financial difficulties down the road.
Billing and Invoicing
Bookkeeping software can also help with billing and invoicing by creating invoices, issuing payments, and tracking outstanding payments.
This is a necessary feature for any business that bills its customers on a regular basis. It can be a huge time-saver, as it automates the billing process and keeps all of your financial information in one place.
Project Management
Some bookkeeping software programs also offer project management capabilities, which can be helpful if you need to track time and expenses for a specific project.
This is a useful feature for businesses that bill by the hour or need to track project-related expenses.
Financial Reporting
Finally, bookkeeping software can also help you generate financial reports. This includes things like income statements, balance sheets, and cash flow statements.
This is important for keeping track of your business’s finances and making sure everything is in order. It can also be helpful when it comes time to file your taxes.
These are just a few of the important functions to look for in bookkeeping software. But there are many other features that you may need, depending on your business.
Below, we’ll explore and compare three bookkeeping platforms commonly used by businesses.
QuickBooks
QuickBooks is one of the most popular bookkeeping software programs on the market. It’s easy to use and offers a wide range of features, making it a good choice for both small and large businesses.
Moreover, QuickBooks integrates with other bookkeeping software programs, so you can keep all of your financial information in one place. And if you have any questions, QuickBooks offers excellent customer service.
Like most modern apps, QuickBooks Online offers cloud-based software to help keep your transactions mobile and easy to access on the go.
QuickBooks is simple to sync up your bank account, so you can easily use it with your banking mobile apps for greater convenience.
Pricing: QuickBooks starts at $24 per month for the EasyStart plan and $140 per month for the Advanced plan. Depending on your needs, you could pay more or less for your QuickBooks package.
QuickBooks Advantages
- Ease of use
- Wide range of features
- Robust QuickBooks Online
- Excellent customer service provider
- Comprehensive expense management
QuickBooks Disadvantages
- Pricing can be expensive for some businesses
Xero
Xero is another popular bookkeeping software program that’s known for its ease of use. It offers a wide range of features and integrates with other bookkeeping programs.
Depending on the size and scope of your business, you might need professional assistance with your bookkeeping software. Thanks to Xero’s support system, you can get the help you need when you need it. You’ll also find handy cloud support, and it will support multiple currencies.
Expense tracking works really well here, ensuring that you can stay on top of your spending with minimal effort. Coupled with an intuitive interface, both beginners and seasoned Xero users will find themselves right at home.
Pricing: Xero starts at just $18 per month for the Starter plan and goes up to $58 per month for the Premium plan. Comparatively, Xero is more affordable than many other bookkeeping offerings out there.
Xero Advantages
- Ease of use
- Affordable pricing
- Robust bookkeeping software
- Integrates with other bookkeeping apps
- Fantastic customer service and support
Xero Disadvantages
- Lack of payroll
FreshBooks
FreshBooks is another excellent bookkeeping software choice for small businesses. It’s easy to use and offers a wide range of features, making it a good option for businesses of all sizes.
FreshBooks also integrates with other software programs, so you can keep all your financial information in one place. And if you have any questions, FreshBooks offers excellent customer support.
Moreover, the project management software here is absolutely incredible. If you regularly manage teams, juggle inventory management, and more, bookkeeping features like project tracking are essential.
FreshBooks is a great fit for independent contractors and small business owners. You can assign multiple users for even greater flexibility. In addition, FreshBooks’ credit card processing works well and is easy to manage. This is ideal for when you have billable clients and need to create invoices on the fly.
The ability to create a custom plan with unlimited invoices is a nice addition, too. When comparing Freshbooks vs QuickBooks or FreshBooks vs Xero, the online payments are about equal.
One area FreshBooks does exceedingly well is time tracking. If you manage several employees or teams, this feature is a must-have.
Pricing: FreshBooks starts at just $22 per month for the Lite plan and $60 per month for the Premium plan. If you have unique needs in your business that requires additional features or options, FreshBooks offers a Select plan. Here, pricing is tailored to match your requirements.
FreshBooks Advantages
- Ease of use
- Affordable pricing
- Excellent inventory management
- Integrates with third-party apps
- Time tracking
FreshBooks Disadvantages
- Limited clients
- Lacks bank reconciliation
Which Tool Should You Choose?
So, you’ve reviewed each of the above bookkeeping software options, and now it’s time to make a decision. Here’s a quick overview of each option to help you choose the right software for your business:
- QuickBooks: QuickBooks is easy to use and offers a wide range of features. It integrates with other bookkeeping programs and offers excellent customer service. However, it can be expensive for some businesses.
- Xero: Xero is also easy to use and offers a wide range of features. It’s more affordable than QuickBooks and integrates with other software programs. Xero also offers excellent customer support. However, it lacks payroll functionality.
- FreshBooks: FreshBooks is easy to use, offers a wide range of features, and is affordably priced. It also integrates with other bookkeeping programs and offers excellent customer support. However, it’s limited to 500 clients and doesn’t offer bank reconciliation.
If you’re looking for an easy-to-use software with a wide range of features, QuickBooks, Xero, or FreshBooks could be a good choice. If you’re on a tight budget, Xero or FreshBooks may be the better option. And if you need payroll functionality, QuickBooks or Xero would be the better choice.
No matter which software you choose, make sure to review the features and pricing carefully to ensure you’re getting the best value for your money.
Final Thoughts
As a small business owner, there are numerous reasons why you need bookkeeping via a software program. And at the end of the day, you can have the best bookkeeping software with stellar inventory management, invoicing, and other features, but if you don’t have an experienced bookkeeping service leading the way, that software won’t get you very far.
To ensure that your financials are in order, contact LedgersOnline today. Our accomplished team is comprised of some of the best minds in the industry and will make sure your business is where it needs to be financially.
