Bookkeeping Software for Small Business: 7 Alternatives To Simplify Your Finances

With 70% of small businesses operating without an accountant, choosing the right bookkeeping software for small business is essential. QuickBooks may feel like the safe choice, but it’s not your only option—and depending on your industry, budget, and workflow, it may not even be the best one. 

The best bookkeeping software for small businesses is the one that fits seamlessly into the way you already run things. It should save you time, reduce errors, and keep your books accurate, but it should also align with your existing workflow, be easy for your team to use, and include features you’ll actually take advantage of.

In this guide, we’ll break down what makes bookkeeping software worth it, highlight the top alternatives to QuickBooks, and help you find the best fit for your business.

TL;DR: Breaking down bookkeeping software for small businesses

Below you’ll find quick lists of different bookkeeping software for small businesses so you can choose the best one for you. We also have tips for what to look for in new bookkeeping software and how to set it up.

Bookkeeping software helps small businesses save time, reduce errors, integrate with other tools, scale business growth, lower costs compared to hiring a bookkeeper, and simplify tax prep.

Best bookkeeping software for small business:

• QuickBooks — Best for established businesses with complex needs.
• Xero — Best for collaboration and bank reconciliation.
• FreshBooks — Best for service-based businesses and freelancers.
• Wave — Best for startups and very small businesses on tight budgets.

Best free bookkeeping software for small business:

• Wave — Always free and best for businesses under $100k in revenue.
• QuickBooks Simple Start — Free for 30 days, then paid, and ideal for businesses ready to invest.
• Zoho Books — Free for small teams and best for testing collaboration features.

Easy bookkeeping software for small business:

• Wave —  Minimal learning curve, clean interface
• FreshBooks — Service-focused simplicity
• Xero — Beautiful design, logical workflow
• QuickBooks — Powerful but steeper learning curve

When searching for easy bookkeeping software for small businesses, look for an intuitive dashboard and navigation, automatic bank transaction categorization, simple invoicing and payment processing, and clear financial reports.

Cheap bookkeeping software for small businesses that doesn't sacrifice quality:

• Wave: Free core features, optional paid add-ons
• Xero Early plan: $20/month for growing businesses
• Zoho Books: Free or $15/month with a good feature set
• Watch for hidden costs like per-user fees, transaction limits, add-on charges, and setup and training costs.

Debating between cloud-based software and desktop?

• Cloud-based bookkeeping wins with anytime access, automatic updates, seamless bank feeds, and real-time collaboration. 
• Desktop bookkeeping software makes sense if your business has specific compliance requirements, unreliable internet, or if you prefer a one-time purchase over a subscription.

Bookkeeping software also integrates with your other tools to save time:

• Payroll: Homebase + QuickBooks, Gusto + Xero, Wave Payroll + Wave Accounting
• Payments: Stripe, PayPal, Square for automatic sales recording
• Banking: Daily imports, auto-categorization, and real-time cash flow visibility

To set up your bookkeeping tool fast, gather your bank info, financial statements, invoices, receipts, and income/expense categories. 

Then, connect your accounts and credit cards, import and categorize your transactions, set up your chart of accounts, create invoice templates and a customer list, and configure your tax settings.

In your first month, review transactions weekly, create rules for recurring items, schedule reports, and connect with your accountant or bookkeeper.

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What makes bookkeeping software worth it for small businesses?

Time savings vs. manual spreadsheets or paper methods

Manual bookkeeping might seem cheaper, but it quickly becomes unmanageable as your transactions grow. 

With simple bookkeeping software for small businesses, you can automate repetitive tasks like bank reconciliation and invoice tracking, saving hours each week. That time can go back into running your business.

Here’s a simple guide to small business bookkeeping if you’re just getting started.

Accuracy and error reduction in financial tracking

Spreadsheets can work well, but they rely heavily on manual entry, and that’s where mistakes often creep in. Typos, broken formulas, or juggling too many tabs can throw off your numbers.

 A time-tested bookkeeping app reduces human error with built-in checks, automatic categorization, and real-time syncing. This ensures your records are always reliable.

Integration with other business tools (payroll, banking, payments)

Good online bookkeeping software for small businesses connects seamlessly with payroll, credit card processors, and your bank. This integration eliminates double data entry and keeps all your financial data in one place.

Scalability as your business grows

As your company expands, your bookkeeping needs evolve. The best bookkeeping software for small businesses should grow with you and offer features like multi-user access, advanced reporting, and inventory management as you scale.

Cost-effectiveness compared to hiring a bookkeeper

Hiring a bookkeeper can cost hundreds per month. While many businesses benefit from professional help, cheap bookkeeping software for small businesses gives you many of the same functions at a fraction of the price.

Tax preparation and compliance support

The right software makes tax season much easier. With organized expense tracking, categorized transactions, and built-in compliance reports, you’ll be ready for your accountant or even able to file yourself.

If you’re in the U.S., the IRS also offers clear guidelines on record keeping for small businesses, which can help you stay compliant alongside whatever bookkeeping system you choose.

What is the best bookkeeping software for a small business (by business type)?

1. QuickBooks

• Best for: Established businesses with complex needs
• Key features: Comprehensive reporting, inventory tracking, project management
• Starting price: $38/month
• Free trial: 30 days
• Why it works: Industry standard with extensive third-party integrations
• Drawbacks: Can be overwhelming for simple businesses, and the price increases over time

2. Xero

• Best for: Businesses prioritizing bank reconciliation and collaboration
• Key features: Excellent bank feeds, unlimited users, beautiful interface
• Starting price: $20/month
• Free trial: 30 days
• Why it works: Superior bank reconciliation and multi-user access
• Drawbacks: Limited inventory features, fewer integrations than QuickBooks

3. FreshBooks

• Best for: Service-based businesses and freelancers
• Key features: Time tracking, project management, client portals
• Starting price: $21/month
• Free trial: 30 days
• Why it works: Built specifically for service businesses and client billing
• Drawbacks: Limited inventory management, not ideal for product-based businesses

4. Wave

• Best for: Very small businesses and startups on tight budgets
• Key features: Completely free core accounting, built-in invoicing
• Starting price: Free (paid add-ons available)
• Free trial: Always free
• Why it works: No monthly fees, surprisingly robust for free software
• Drawbacks: Limited customer support, fewer advanced features

If you’re running a restaurant, you may need bookkeeping tools that handle tips, payroll, and inventory. Our guide to restaurant accounting software covers options built with food service in mind.

Best free bookkeeping software for small business: What you actually get

Wave (truly free)

• Core accounting features at no cost
• Limitations: Basic reporting, email support only
• Best for: Businesses under $100k revenue

QuickBooks Simple Start / EasyStart (free tier limitations)

• 30-day trial, then $38/month minimum
• No truly free ongoing option
• Best for: Businesses ready to invest in comprehensive features

Zoho Books (free up to 3 users)

• Free for small teams with basic needs
• Upgrade required for advanced features
• Best for: Teams wanting to test collaboration features

Easy bookkeeping software for small business: Simplicity wins

When it comes to bookkeeping and all its complexities, a simple tool is best because it’ll be easier for you to learn and use regularly.

But easy or simple doesn’t mean lacking features. An easy bookkeeping tool will include an intuitive dashboard and navigation, automatic bank transaction categorization, simple invoicing and payment processing, and clear financial reports without accounting jargon.

Let’s dive deeper into each of these features.

Intuitive dashboard and navigation

Simple bookkeeping software for small businesses should make it easy to find what you need. An intuitive dashboard provides a clear overview of income, expenses, and outstanding invoices, so you can see your financial health at a glance.

Navigation menus should be logical and uncluttered, making it easy to jump between tasks like creating invoices or reconciling transactions without feeling lost.

Automatic bank transaction categorization

With automatic bank feeds and categorization, you can skip the time-consuming and error-prone manual data entry. The software pulls in your transactions daily and sorts them into common categories like rent, supplies, or payroll. 

Over time, the system learns from your edits and becomes more accurate. This feature saves hours each month and ensures your books stay up-to-date without tedious input.

Simple invoicing and payment processing

Easy-to-use bookkeeping software should let you generate professional invoices in just a few clicks, send them by email, and allow clients to pay online. Some tools also sync payments automatically with your accounting records, so there’s no extra step required.

Clear financial reports without accounting jargon

Simple bookkeeping software translates your numbers into clear summaries and visual charts. Instead of wading through dense accounting terms, you’ll see straightforward profit-and-loss statements and balance sheets that help you make better decisions.

Simple bookkeeping software for small business (ranked)

1. Wave: Minimal learning curve, clean interface.
2. FreshBooks: Service-focused simplicity.
3. Xero: Beautiful design, logical workflow.
4. QuickBooks: Powerful but steeper learning curve.

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Online bookkeeping software vs. desktop: Why cloud wins for small business

Access your books anywhere, anytime

With cloud-based software, you’re not tied to one computer. Whether you’re at a job site, in a coffee shop, or at home, you can log in and manage your finances. This flexibility is especially useful for small business owners who wear many hats and are often on the move.

Automatic backups and security updates

Online bookkeeping platforms handle backups and security patches automatically. You don’t have to worry about losing data if your computer crashes. Most providers use bank-grade encryption and two-factor authentication to keep your information safe.

Real-time collaboration with accountants or team members

Cloud access also means multiple users can work on the books at the same time. Your accountant can reconcile transactions while you’re generating invoices, without sending files back and forth. This reduces delays and keeps everyone on the same page.

Seamless bank feeds and automatic updates

When you can link directly to your bank and credit card accounts, transactions flow in automatically and are categorized instantly. This reduces manual entry, eliminates missed expenses, and keeps your cash flow picture current.

When desktop bookkeeping might still make sense

Businesses with specific compliance requirements

Some industries require companies to store data locally rather than in the cloud for compliance reasons. If you’re in a regulated field where auditors expect on-premise data access, desktop software may be a safer choice.

Companies with unreliable internet connections

Cloud access isn’t always practical in rural areas or places with inconsistent or unreliable connectivity. In these cases, a desktop solution ensures you can still manage your finances even when you’re offline.

Those preferring a one-time purchase over subscriptions

Some owners prefer paying once for desktop software instead of committing to monthly or annual subscriptions. While updates aren’t as seamless, this model can be appealing if you’re looking to minimize recurring expenses.

Cheap bookkeeping software for small business that doesn't sacrifice quality

Best value options $20/month or less

• Wave: Free core features, optional paid add-ons
• Xero Early plan: $20/month for growing businesses
• Zoho Books: Free or $15/month with a good feature set

Hidden costs to watch for

• Per-user fees that add up quickly
• Transaction limits on lower-tier plans
• Additional charges for payroll, payments, or advanced reporting
• Setup and training costs

Accounting and bookkeeping software integration: Connecting your business tools

Payroll integration

• Homebase + QuickBooks: Seamless employee cost tracking
• Gusto + Xero: Automatic payroll journal entries
• Wave Payroll + Wave Accounting: Built-in integration

Payment processing connections

• Stripe, PayPal, and Square integrations
• Automatic sales recording and reconciliation
• Reduced manual data entry and errors

Banking and credit card feeds

• Daily transaction imports
• Automatic categorization with learning algorithms
• Real-time cash flow visibility

Many tools today combine accounting and bookkeeping features, giving you a single hub for managing payroll, expenses, and cash flow. If you’re weighing your options, check out our breakdown of the best small business accounting software to see how it compares.

Simple bookkeeping software setup: Getting started in under an hour

Pre-setup checklist

• Gather bank account information
• Collect recent financial statements
• Organize existing invoices and receipts
• List your main income and expense categories

Step-by-step setup process

1. Connect your bank accounts and credit cards
2. Import and categorize recent transactions
3. Set up your chart of accounts
4. Create invoice templates and a customer list
5. Configure tax settings for your location

First-month best practices

• Review and categorize transactions weekly: Instead of waiting until month-end, reviewing transactions weekly keeps your books cleaner and prevents a backlog. This also helps you catch errors early.
• Set up automatic rules for recurring transactions: Some platforms let you create rules so that recurring expenses, like rent or utilities, are automatically categorized. This feature reduces repetitive work and improves consistency.
• Schedule regular backups and reports: Even though cloud platforms provide automatic backups, downloading monthly reports adds an extra layer of protection. You’ll always have a local copy if you need it.
• Connect with your accountant or bookkeeper: Bringing your accountant into the software early ensures they understand your setup and can give feedback. It also means they’ll have access to everything they need for tax prep.

Making the switch: Moving from spreadsheets to bookkeeping software

If you’ve been managing books in Excel, moving to online bookkeeping software for small businesses can feel like a big leap. But the transition pays off. Bookkeeping software can help you:

• Save time by automating manual tasks
• Improve accuracy with built-in error checks
• Cut costs compared to manual bookkeeping or hiring full-time help
• Simplify tax season with categorized records

Whether you need free bookkeeping software for a small business to get started or a more robust platform like QuickBooks or Xero, there’s an option that fits your needs and budget.

Not all solutions are created equal, and simple doesn’t always mean limited. For example:

• Wave proves that free software can still be powerful enough for many small businesses. 
• Meanwhile, QuickBooks remains the go-to for those with complex reporting and payroll needs. But it isn’t automatically the best choice for every small business

Choosing the right fit comes down to your priorities: affordability, ease of use, integrations, or scalability. 

With so many options available, the best approach is to test free trials and see which one feels most intuitive for your workflow.

Ultimately, good bookkeeping software pays for itself in time saved and peace of mind gained.

FAQ: People also ask about bookkeeping software

What is the easiest bookkeeping software to use?

The easiest bookkeeping software to use is Wave or FreshBooks. Both are designed with simplicity in mind, featuring intuitive dashboards and minimal accounting jargon. They’re great choices if you want easy bookkeeping software for small businesses without the steep learning curve.

Is QuickBooks better than Excel for bookkeeping?

QuickBooks is better than Excel for bookkeeping because it automates tasks that spreadsheets can’t. While Excel can work for very small businesses, accounting and bookkeeping software for small businesses ensures accuracy, integrates with your bank, and simplifies reporting.

Is QuickBooks worth it for a small business?

QuickBooks is worth it for a small business if you need robust features like payroll, inventory, and detailed reporting. But, for startups or small teams, cheap bookkeeping software for small business like Wave or Zoho may be a better fit.

Can I use Excel as an accounting software?

You can use Excel as an accounting software, but it’s not ideal. Spreadsheets don’t offer the same automation, error reduction, or integrations that bookkeeping software for small business provides. Switching to even free bookkeeping software for small businesses is a smarter move.

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