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Top 5 Accounting Software for Startups

Professionals doing accounting for startups.
Professionals doing accounting for a startup. (Photo by Scott Graham on Unsplash)

The top 5 accounting and bookkeeping software products available for startups were selected based on whether they provided the accounting services needed by startups, and the level of difficulty associated with using them. Most of the software listed is a great choice for individuals, startups, and small companies. 

The top 5 accounting software products are: 

  1. Zoho Books
  2. FreshBooks
  3. QuikBooks Online
  4. Sage Business Cloud Accounting
  5. Netsuite ERP

Four of the five software products are best suited for small companies. There are startups that are mid-sized or large. They need software that can handle the financial data generated by their operations. In this guide, there is only one software product that is suitable for mid-sized and large enterprises, Netsuite ERP. 

Let’s briefly review the benefits of using each different software product.

Man and woman discussing accounting software options.
Startup owner and local advisor discussing accounting software options. (Photo by Matthew Henry from Burst)

Zoho Books

Zoho Books is part of Zoho Suite, a set of products that work well together and can be used independently. It’s great for freelancers, small businesses and medium-sized businesses. Zoho Books works well with Google Drive, Dropbox, PayPal, Braintree, and Temponia. In addition, its mobile apps can be used by phone with iOS and Android operating systems. 

It has a free plan for businesses that earn less than US$50,000 per year. The features included in the free plan are: invoice customization, tax management, recurring invoices, credit notes, manual journals, and client portals. A maximum of 1,000 invoices per month are allowed to businesses.

Zoho Books paid plans have more advanced accounting features. Those features include automated workflows, project management, sales approvals, bank reconciliation, inventory management, automatic bank feeds, purchase orders, and exhaustive reports.

QuikBooks Online

QuikBooks Online (QBO), also called Intuit QuikBooks, is part of a suite of financial accounting software that is designed to make financial accounting and report generation easy and efficient for startups, freelancers, and small businesses. Although there are several QuikBooks products that would be useful to startups (e.g., QuikBooks Self-Employed, QuikBooks Desktop), the best one, in general, for most startups, is QBO. 

QBO is cloud-based accounting software that is used by many professional accountants and bookkeepers. It even has a mobile app. Hence, it is easy for you to outsource your financial accounting if you use this software. Also, if you have any problems with it, there are lots of local people available to help you work through them. 

Local bookkeepers can set up the QBO system for you. They can set up your system to automatically perform different processes, link credit card and bank accounts, create reports, and more for about US$50. So if you really don’t have the time to set up your system and learn it by yourself, pay a local bookkeeper to do it and tutor you.  

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QBO is also great because if your business outgrows it, you can easily transition to Netsuite ERP. Netsuite ERP has a slew of sophisticated accounting features that accommodate mid-sized and large enterprises. 

Its features include invoice creation and management, bill management, payment management, customized invoices, check printing, balance sheet reporting, actionable insights, automatic tax calculations, banking and data synchronization, and a slew of automated transactions. It can also be used to track mileage. 

The software imports transaction details from credit card, debit card, PayPal, and Square accounts. It can also match photos of receipts with business expenses. Even better, it sorts your taxes on your transactions into different tax categories. The automated sorting of taxes makes it a lot easier and faster for startups to file and remit taxes to the tax authorities. 

For startups, QBO has two more benefits. It differentiates between business and personal expenses. Besides that, it syncs with TurboTax so that you can easily send all of your accounting records to them, and TurboTax do your business’ taxes. 

QBO may not be the best accounting software for you. However, it can reduce the amount of work you have to do. QBO makes it easier to outsource the work and get help with it. In the end, you have to weigh the pros and cons of each software product and select the one that best meets your needs.

FreshBooks

FreshBooks, cloud-based accounting software, is great for freelancers, startups, and small businesses. It has a comprehensive payment processing system that is easy to use. Customers can pay invoices using their credit cards and third-party payment service providers (e.g., Stripe, PayPal). The system is mobile-friendly (e.g., iOS, Android) too. Its popularity can be attributed to its attractive user interface, third-party integration apps, and advanced invoicing features. Plus, it’s budget-friendly. It has 4 different plans based on the number of clients billed and the types of specialized services available at each level of the plan.

Its features include creation of professional looking invoices, time tracking, expense tracking, project management, easy to use invoicing and billing, and report generation. 

The software allows its users to automate certain functions too. The functions that can be automated include: setting up recurring payments, sending reminders, charging late fees, and other billing- and invoice-related processes.

Sage Business Cloud Accounting

Sage Business Cloud Accounting is a great option for startups and small businesses. The software is easy to use, master, and set up. Plus, it is incredibly efficient and easily accessible for most businesses. 

This software can perform the following tasks:

  • Create, send, and track invoices
  • Generate customized quotes for customers
  • Capture data from receipts, bank statements, etc.
  • Organize financial information into the correct accounts
  • Automated functions reduce the time spent on tracking and organizing payments and payments
  • Embedding a play button into receipts that clients can use to send their payments via Stripe
  • Create and send recurring invoices

This software is excellent for startups and businesses planing to scale up as their revenue and customer base grows. Moreover, since it is easy to use, the business owner won’t have to spend a lot of time trying to figure it out and getting help to operate it.

Netsuite ERP

Netsuite ERP, cloud-based accounting software, streamlines a business’ financial accounting. It is chock-full of features that are useful to startups, especially mid-sized and large ones. 

Its features include payment processing, domestic and global tax management, real-time visibility of financial data, dynamic customizable ledger for different kinds of accounts, transactions, and reports. Other features included are: procure to pay, vendor management, inventory control, order to cash, and flexible payment processing. Moreover, its revenue recognition module makes it easy to produce timely financial reports and comply with industry and government reporting requirements.

In terms of automation, it allows businesses to automate workflows, transaction matching, and journal entry posting.

As you can see, it can be used by a large variety of mid-sized and large businesses. The financial services provided by this product are most likely more than what is needed by freelancers and small low-tech startups (e.g., Etsy, eBay, Shopify).  

Final Thoughts

Business owner making a checklist.
Business owner making a checklist. (Photo by  Anastasia  Shuraeva on Pexels)  

Before investing in financial accounting software, make sure of your needs and constraints. In other words, you must know what you need to operate your business and what things you cannot do when using the software. 

For example, if you have a simple business limited accounting experience, are not good with computers, and don’t have a lot of time to spend work learning accounting software, maybe QuikBooks Online is the best package for you because it gives you what you need and its is relatively easy and budget-friendly to get help with it and/or outsource it.

That said, you have 5 popular financial accounting software products that you can use for your startup. This can be the beginning of your accounting software review or you can accept that their market success is proof that they are what you need and limit your investigation of accounting software products to them. 

The best financial accounting software for you, is the one that works best for you and your business.  

For assistance with your business’ accounting and tax matters, contact the Free Cash Flow Agency. Its professional, experienced, and skilled staff can answer your questions and make sure that you get your financial filing submitted on-time. 

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