The best accounting and bookkeeping apps for small businesses
When it comes to balancing the books, many of us simply leave it to the professionals, with percentages, decimal points and formulas likely to end in mistakes and a headache. While many business owners and managers prefer to keep on top of every aspect of their business, the financial side can quickly get away from us, especially if your business grows quicker than expected.
While accountants and bookkeepers are useful for those pressed for time, or those who just prefer not to think about numbers, many small businesses are turning to accounting software to keep a closer eye on their operations and spending habits, as well as to find ways to bump up their profits. With numerous platforms available, finding one that’s both easy to use and affordable, almost requires an economics degree in itself. To offer a guide, Canstar Blue has crunched the numbers on Australia’s big accounting software providers, surveying more than 800 business owners and decision-makers to get the lowdown on their software of choice.
The idea is to give you as much information as possible about the compared providers, to help you make a better-informed decision about which service will best meet your needs and preferences. So, what did we find this year? Intuit QuickBooks climbed to the top of our ratings, after receiving top marks in almost every category.
Best Small Business Accounting and Bookkeeping Apps
Here is a list of the best small business accounting and bookkeeping apps for 2020:
XERO ACCOUNTING APP
It is one of the best accounting and bookkeeping tools in the market which is also quite cost-effective. It can be best utilised by businesses which need to include unlimited users without paying anything extra for them.
With the help of the Xero app, you can perform bank reconciliation, manage employee time, get receipts, add and edit customer details and conduct invoicing. Just like the software, the app is highly rated by users with a rating of 3.5 on Apple’s app store and 3.4 on Android. However, many users rated it below QuickBooks, which has higher ratings for user experience and functionality.
QUICKBOOKS ACCOUNTING APP
Although Xero scores high on the accounting software front, it lags behind QuickBooks on the app front. The divide is quite clear with the customer ratings for QuickBooks being 4.7 and 4.3 on the Apple app store and Google Play store, respectively.
The reason behind this is that the intuitive app seamlessly syncs data across devices and is capable of doing everything that the software can do. It can aid you in fetching over 50 reports and sharing them with stakeholders, sending invoices along with attached receipts, tracking expenses, accepting payments, transferring payments to bank accounts, creating estimates, etc.
The only downside is that it is costlier than the other apps, and you need to pay an additional amount for payroll. It works well with all types of businesses and is easy to operate and understand.
ZOHO BOOKS ACCOUNTING APP
Zoho Books accounting app works on all operating systems – Apple iOS, Windows and Android. It helps in automating the time-consuming and repetitive tasks which become tedious for the bookkeeper when performed manually.
It provides multiple automated workflow options which allow the automation of various accounting processes. It has a rating of 4.7 on the Apple app store, and it works effortlessly with Siri, Apple Maps and iMessage.
The Zoho app assists in sending invoices, quickly pulling up reports, capturing expenses, gathering insights from the dashboard, tracking time spent on projects, etc. The downside of the app is that it has no feature for payroll and does not integrate with other apps.
FRESH BOOKS ACCOUNTING APP
With the user rating of 4.8 on the Apple app store, it is a highly rated mobile app which helps you to stay connected with your customers and create invoices on the go. It makes capturing expenses a matter of a few minutes and allows you to respond to your clients using real-time conversations through the app.
The best part about this app is that it gives you the exact time when the client viewed an invoice. It is quite suitable for self-employed workers. The right bookkeeper will help you to understand if you need this app or an advanced one.
SAGE ACCOUNTING APP
As most bookkeepers would suggest, Sage offers a plethora of features including access to real-time data, quick invoicing and management of overdue invoices, tracking expenses and managing cash flow from anywhere.
The Sage app works with iOS and Android and enjoys a rating of 4.4 on the Apple app store. It has a chat feature for texting, taking pictures of receipts, checking balance, etc. It is reasonably priced with different pricing for different app capabilities.
WAVE ACCOUNTING APP
The Wave accounting app provides most of the features free, which makes it a suitable option for businesses with very few employees. It does not have detailed features but suffices for the basic needs of a self-employed individual.
You can track expenses and manage several businesses from the same account at no additional cost. It is primarily useful for invoicing and transaction management. If you need insightful features like project management, then you will have to look at the paid apps which come with several features.
GO DADDY BOOKKEEPING APP
Go Daddy Bookkeeping is the best accounting tool for entrepreneurs who utilise e-commerce platforms like Amazon and eBay for selling their products and services as it directly integrates with them.
Another advantage of this app is that it is cheaper than the other options in the market. It has a 3-star rating on the Apple app store and can be utilised for accepting payments, capturing receipts, sending invoices, adding expenses, etc.
ZIPBOOKS ACCOUNTING APP
It is quite evident from the low ratings of ZipBooks on both the Apple app store and Google Play store that it is not highly functional. However, it is significantly beneficial for small businesses and freelancers operating.
It allows effortless invoicing, time tracking and project tracking. It does not have the advanced features of inventory tracking and payroll, but it fares well in the case of micro-businesses. Plus, it is extremely user-friendly.
KASHOO CLOUD ACCOUNTING APP
Offering a free trial, Kashoo is an easy-to-use online accounting app for simple bookkeeping methods. You can use it to generate invoices quickly, monitor your financial data at any time, track expenses and get insightful reports.
It is designed exclusively for Apple products and is quite popular among small business owners with limited needs.
Key considerations for choosing the best accounting software
Your Accountant’s / Bookkeeper’s software preference
- Are you delighted with your existing external Accountant / Tax Agent?
- If yes, go and ask them what software they’d recommend/prefer you use.
- If no, the first place to start (almost in business, let alone in choosing business software) is to work with a good external accountant. One that delights you, not just the one you know. The technology they use, *should* influence your decision whilst you are small.
- Do you use or do you intend to use a bookkeeper that delights you?
- If yes, go and ask them what software they’d recommend. My view is, the bookkeeper’s opinion/preference (due to regularity of use and intimate knowledge of your business) trumps the accountant’s.
- If no, see question 1.
Invariably, I would suggest more accountant’s and bookkeepers these days will prefer Xero, followed by MYOB and QuickBooks Online.
If you’re accountant or bookkeeper is an industry-focused (such as creatives or trades), they may favour the lesser-known products like Rounded or Freshbooks – but most will suggest one of the BIG 3.
Integration with operational software
There’s a world of software beyond Accounting & Bookkeeping systems
The bookkeeping software is often not the key operational tool these days. If you’re in retail or hospitality, you need a Point Of Sale System like Square, Vend, Kounta or Hike.
If you are a tradie, whilst you can probably get away with just using the bookkeeping apps on their own (particularly the mobile-friendly QuickBooks, Xero and Freshbooks), you might consider tradie specific apps like ServiceM8, Tradify, NextMinute and Simpro.
If you’re a yoga studio or gym, you need apps like Mindbody to book your appointments and manage your classes.
The point is that accounting/bookkeeping software is less important than key operational software. This means the key value of the bookkeeping software is its ability to integrate with these operational tools and the number of options that these integrations make available.
Xero wins hands down in Australia in this regard. Followed by QuickBooks (who’s add-ons suffer from different connections per region and so often good apps only connect with the US QBo). Then MYOB.
Whilst most offer integrations to best-of-breed 3rd party operational tools, Zoho probably deserves a special mention, with ZohoBooks being one small part of a comprehensive suite of products the company bundles under the ZohoOne offering. From accounting to reporting, inventory management to email marketing, CRM to project management and beyond… ZohoOne is marketed as “The Holistic Approach To Business Software”. It is impressive at the price point.
Best accounting software mobile apps
10 years ago, the concept of allocating bank statement transactions such as customer payments on a mobile device would have sounded ridiculous to me. The value the mobile capability of an app highly and think it shows a company who understands and keeps up with the technology and customer demands.
On this score, I rate QuickBooks (Online and Self-Employed) slightly ahead of Xero, as far as comprehensive solutions on mobile. ZohoBooks also scores well with a comprehensive mobile solution. Meanwhile, small Australian player Rounded aren’t as comprehensive with their mobile solution but rate very highly in the app stores for user satisfaction.
MYOB’s offering on mobile is disjointed and weak compared to its competitors.
Accounting Software Automation
If the last few years have been about the trend to mobile, then I believe beyond 2020 is about automation in the form of workflows and Artificial Intelligence.
The best systems offer functionality such as:
- Automated debtor reminders (Xero, MYOB Essentials, ZohoBooks);
- Recurring transactions such as invoices, bills and journal entries (QuickBooks Online, Xero, ZohoBooks)
- Auto-coding of banking transactions – evolving from customer-defined rules to suggestions driven by big data and AI (QuickBooks, MYOB, Xero)
- Automation of bill/expense entries, from pdf or image, to entered and coded (Xero, MYOB, QuickBooks and ZohoBooks)
All told, it takes large datasets and significant resources to build automation engines that work effectively.
Automation is the economic moat or barrier to a competition where global players have a massive competitive advantage. We already see the likes of Intuit (QuickBooks), Xero, Sage and Zoho deliver in this area and I can only see them accelerating away from smaller players because of their size, access to data and significant human capital to build such things.
Single-touch payroll is a requirement for any business with employees. If you have staff, you need a modern payroll software to give you compliance and ease of the process. If you’ve set up as a company, chances are you’ll be paying yourself as an employee and need a payroll system.
QuickBooks has partnered with KeyPay to bundle payroll as part of their Australian QuickBooks Online solutions. Ironically so too has Sage with Sage Business Cloud Financials. KeyPay as an embedded “best-of-breed” probably wins on this front.
Xero’s payroll is not its absolute strength. Still, it is more than decent and is definitely getting better and is light years ahead of the payroll dished up in MYOB (Essentials particularly).
Saasu and ReckonOne both offer OK integrated Payroll solutions included or at a small additional cost.
Can you just Google it?
We’re big fans of being able to find out how not just from the textbook.
Not sure how to do something? What’s the quickest way to work it out. Just Google it…
I think giving weighting to a product based on the availability of online content for a wide range of How-Tos, from wikis to community help, Facebook groups to Youtube… is a fair assessment point as it is the modern way people learn systems.
Logically the big players have more content online from themselves and their communities/partners. For mine, Xero is best in Australia for “just googling it”. QuickBooks Online has the most content but suffers from dominant American focus, where the product is slightly different. MYOB deserves an honourable mention for the volume of market-specific content, though there are multiple versions and you can get lost in which product, which version etc.
On customer feedback alone, Rounded probably scores the highest on support satisfaction. Its only fair to point out that customer support in software for small and micro businesses, is very difficult to scale well. I would suggest Rounded leads the way as they remain small and haven’t yet experienced the scaling problem, and their key directors are still very hands-on in supporting their clients.
QuickBooks scores well for support in Australia, probably ahead of the other BIG players by offering phone, email and live chat support. MYOB offer phone and other forms of support to a high level (though my experience is not as timely as QuickBooks). Xero cops a bit flack for not offering phone support (see this thread for example), but not everyone wants phone support in 2020, and general Xero do OK, given their size and their responsiveness to online queries.
For the price (free), Wave, owned by H&R Block since last year, is a decent solution. Though the old saying is, if you’re not paying for the product, then you ARE the product that is being sold. At present, after previously flirting with ads, they monetise based on customers using their very reasonably priced merchant facility. Similar to what Square does with POS.
I’ve accused QuickBooks of price dumping in the Australian market before (big US player looking to muscle Xero in their home market). I think there has been a noticeable shift away from this though in recent times, under a new CEO. They have increased their prices, but still under-cut the Xero and MYOB price for equivalent offerings.
Reckon has very aggressive pricing on ReckonOne using a modular approach and an entry point at just $7/month. Saasu is a good value for what you get, starting at just $15/month.
Freshbooks and ZohoBooks seem great value too, dislike how they use pricing per contact/customer, as even really small businesses can have loads of contacts.
I don’t think MYOB is the best accounting software as I believe they overprice their solutions for comparative functionality, relying on the goodwill of their long-standing brand and rusted on, boomer client base.
Xero price is relevant to their market-leadership and the premium offering they deliver. You’re unlikely to pick Xero on price alone, though it offers great value when all factors are considered.
How Accounting Tools Work
Accounting probably doesn’t make the list of things you like to do as a business owner; it can be complicated, and it needs to be done correctly. So, the makers of small business accounting tools have worked hard to present this discipline as simply and, well, pleasantly as possible. Some—including Intuit QuickBooks Online and Zoho Books—have been more successful at this than others.
If you have ever used a productivity app online, you shouldn’t have any trouble understanding these tools’ structure. They all divide their content into logical modules by providing toolbars and other navigation guides. Sales tasks are grouped as are purchase, inventory, reporting, and payroll activities. There’s always a Settings link that takes you to screens where you can specify preferences for the entire tool. These include your setup chores and settings you may need to modify at times, such as restricting additional users to specific areas.
A tool’s dashboard homepage provides a real-time overview of the financial information you need to see frequently, including charts comparing income and expenses, account balances, and invoices and bills that need immediate attention. There are often links to areas of the tool where you can take action.
You use standard web conventions to navigate around each tool and enter data. Along the way, you’ll encounter a lot of buttons and arrows, drop-down lists, and menus. Colour is sometimes used to signify related information, while graphics and fonts are well chosen to make the tools as aesthetically pleasing as possible.
Which accounting software is best for my business?
They may all appear the same to some people, but each accounting software platform is different, with all offering specific functions and features, as well as different levels of customer service. You could be tempted to jump into the cheapest package you find. Still, you may be sacrificing additional features that could streamline technical and difficult processes, which could ultimately save you time and money over time.
With plenty of options available for businesses to choose from, selecting the platform that best suits your day-to-day operation can prove a big decision. Ultimately the decision will come down to your requirements and budget, in addition to how you’d like to run your operation. With each brand offering additional features to help you reach your financial goals, setting aside some time to research what each has to offer will help you save both time, and frustration, down the line.