How to choose accounting software for a small business
The right accounting software saves hours every month. Here is how to choose.
- List what you need. Invoicing, expenses, payroll, inventory — note your must-haves.
- Count your users. Some tools charge per user; others (like Xero) include unlimited.
- Check integrations. Your bank, payment processor and other apps should connect.
- Compare tiers and price. Make sure the features you need are not locked to an expensive plan.
- Try free trials. Most offer 30 days — test the workflow before committing.
Start with your business size
The right tool depends on where you are. Sole traders and freelancers mainly need clean invoicing and expense tracking; growing businesses need reporting, payroll, inventory and multiple users. Buy for where you are heading in a year, not just today — migrating later is possible but a hassle.
The features that matter most
- Invoicing & time tracking if you bill clients — the core for service businesses.
- Bank feeds & reconciliation to import transactions automatically and save hours.
- User limits — some tools charge per seat; Xero includes unlimited users.
- Payroll & inventory if you have staff or sell products.
- Accountant support — pick what your accountant already uses.
Try before you commit
Every major tool offers a free trial, and QuickBooks often runs steep introductory discounts. Set up a couple of real invoices, connect your bank and run a report during the trial — that tells you far more than a feature list.
FAQ
What is the best accounting software for a small business?
QuickBooks Online is the safe all-round pick; Xero is the strongest alternative, especially for teams. See our best accounting software guide.
Is free accounting software any good?
For sole traders, yes — Wave offers genuinely free invoicing and bookkeeping. You only pay when you add payments or payroll.