It can be tough to decide which small business accounting tool is best for your business. Do you go with the industry standard, Quickbooks? Or maybe you prefer the cloud-based Xero? What about Freshbooks or MYOB?Â
In this post, we’ll compare the features of these four tools to help you make a decision. Keep in mind that what’s best for one business may not be ideal for another, so weigh your options and choose the right tool.
When it comes to choosing the best small business accounting software, the options can be overwhelming. Do you go with Xero, Quickbooks, Freshbooks, or MYOB? Each program has its strengths and weaknesses, so how do you decide which one is right for your business?Â
Whether you’re just starting in business or operating for a while, keeping on top of your accounts is essential. But with so many different accounting tools available, it can be hard to decide which one is right for you, no matter what industry are you in — hospitality, trades, retail business, or working with cryptocurrencies. Cryptocurrency is especially hard in terms of accounting for those who are new to this sphere, so it is essential to pick the right crypto accounting services in order to be compliant with all regulations.
This post will compare four of the most popular small business accounting tools: Xero, Quickbooks, Freshbooks, and MYOB. Then, we’ll look at their features and pricing plans to help you decide which one is the best fit for your needs.
We’ll compare four of the most popular small business accounting tools: Xero, Quickbooks, Freshbooks, and MYOB. We’ll discuss the pros and cons of each tool and help you decide which one is best for you. So read on to learn more about the best small business accounting tools!
Figuring out the best small business accounting software can be overwhelming.
Do you go with Xero, Quickbooks, Freshbooks or MYOB? Each one has its pros and cons – so how do you decide?
If you’re a small business owner, you know that keeping your finances in order is essential to your success. But tracking expenses, income, and invoices can be time-consuming and complicated.
Fortunately, several great accounting tools are available that can make the process much easier.
In this article, we’ll compare Xero, Quickbooks, Freshbooks, and MYOB so you can decide which one is the best fit for your company. We’ll look at pricing, features, and usability to see which one best fits your business.
So, whether you’re just starting or ready to switch accounting software providers, read on to find out more!
Let’s get started!
QuickBooks Online
For more than 30 years, QuickBooks has been one of the most recognised brands in the accounting industry. It started out as a desktop application, but today there is an online version available over the cloud called QuickBooks Online.
QBO is a true double-entry accounting application that includes a robust chart of accounts and a wide variety of reporting options. In addition, it provides features like as inventory management, a tool for project management, invoicing, and payroll assistance, as well as an astonishing number of business apps and connectors (over 650).
It is important to point out that the programmes page is far harder to locate compared to the other software on our list. Nevertheless, when you access QuickBook Apps, you will be able to view App Collections (such as Free apps, Premium apps, Popular apps, and Trending apps) in addition to Categories (i.e. Calculate quotes, Manage customers, Sync data, Track inventory, etc.). Receipt Bank, Bill.com, TSheets Time Tracking, Fathom, Expensify, Fundbox, Transaction Pro, and Bulk Import Excel are examples of popular programmes.
It is essential, when operating a small business, to keep a firm grip on your financial situation and records.
The vast majority of bookkeepers and accountants will have some level of familiarity with the software known as QuickBooks. This ensures that when you grant access to a new team member or an outsourced partner, they will be able to rapidly get up to speed.
Having said that, QuickBooks is a generic software built for everyone, which means it is packed to the gills with a large number of features that you are quite unlikely to ever use.
For example, a significant portion of the software is devoted to inventory management, yet this feature is not applicable to online firms because they do not handle actual inventory.
And because it is still missing a lot of its functions, it can be difficult to use for users who are just starting out. In addition, unlike Xero, it does not offer a streamlined and straightforward process flow (unless you have accounting experience).
QuickBooks Online (QBO) is an option that is more budget-friendly for small enterprises. Out of the three, I find QBO to be the most difficult to navigate. On the other hand, they do offer help and training via the internet.
QBO is a system that is hosted in the cloud and offers a mobile app that enables you to manage your company while you are on the road. In addition, you will be able to take payments through credit card if you use the QB Merchant Account Service.
The website for QBO makes the claim that you will be paid twice as quickly if you use their service. I’m not sure how this stacks up against other available packages.
They also feature automatic payment reminders, which means that you do not have to manually pursue up those late payers; rather, QBO will do all of the leg work here for you.
One thing that QBO does that the other two solutions don’t appear to do is track time within projects, and I can’t see that happening with the other two. Businesses who charge by the hour or want to track key performance indicators (KPIs) related to time, such as employee productivity or labour percentages, may find this to be beneficial.
QBO has over 700 different integrations, which means it can grow with your company and fulfil the majority of your requirements.
If you are considering hiring a bookkeeper to help you manage your finances, you should consult with them before deciding which accounting programme to use.
This will ensure that you make the most informed decision possible. Every bookkeeper has a particular piece of software that they prefer to use and is likely to be more proficient in than other bookkeepers. As a result, they will be able to perform jobs in a more timely manner, which will result in cost savings for you.
QuickBooks Feature List
- Establish connections between numerous accounts.
- Keep an eye on the inventory as well as the cost of each item.
- Manage bills and merchants
- Take care of your customers’ accounts receivable and invoices.
- Create custom invoices
- Buttons labelled “Pay now” allow for immediate payments.
- Dashboard overview
- Clear and concise reporting
- Access must be shared with an accountant.
- Keeping track of receipts
- The payroll for the staff and the taxes
- Keep an eye on your revenue, expenditures, and payments.
- Mobile apps (use QuickBooks anywhere)
- A great number of integrations
- The profit and loss statements as well as the balance sheets
- Make payments electronically and print checks.
- Mobile receipt capture
- Create estimates
- The synchronisation of financial data
- Automatic tax computations
In addition, pricing for sole proprietors and consultants begins at $7.50 per month. And a monthly fee of $12 for plans suited for small businesses.
QuickBooks is an excellent product, but because it makes an effort to cater to the needs of all users, it is a more comprehensive programme than the vast majority of people actually want.
In addition, there is a lot of content within the app, which can make it difficult to locate the specific features that you require.
In addition, the help offered by Intuit leaves a great deal to be desired. Users have said that there are frequent technical faults, issues with updating, and support that is unresponsive.
MYOB
The Australian version of QuickBooks is known as MYOB, which is an abbreviation that stands for “Mind Your Own Business.” It comes with a variety of features that are suitable for use by companies of all sizes.
Because it is a Microsoft Gold Certified Partner, it is compatible with the vast majority of Microsoft’s offerings and ensures a pleasant user experience. Additionally, they are a partner with PayPal, which is an advantageous payment option for online enterprises.
Desktop application that runs on Windows and is known as MYOB. It includes all of the standard accounting capabilities, such as payroll, budgeting, and project management tools, as standard fare.
MYOB is not a cloud-based application out of the box; however, you may buy an add-on that gives you access to certain of the tool’s functions through any web browser regardless of where you are.
To get the most out of the tool, however, you will need to use the desktop version on a specific device rather than the cloud app because the cloud app leaves a lot to be desired.
The mobile dongle is a handy accessory that comes included with MYOB. Users are able to swipe credit cards and make EFTPOS payments in person by plugging the gadget into their Apple or Android smartphone or tablet.
You may also buy MYOB Kounta, which is a cloud-based point-of-sale add-on that is excellent for brick-and-mortar businesses, mobile salespeople, or event booths in tradeshows and similar events.
However, in contrast to other accounting software, the cloud edition of MYOB does not have a particularly large number of integrations.
In addition, the MYOB App Marketplace was developed to assist businesses in enhancing the capability of their MYOB software by integrating more than 300 applications developed by third parties. Users are able to look for a certain app or apps by using a search box. In addition, apps can be divided into the following three categories: tasks, products, and industries.
Apps such as Fathom, Lightyear, ServiceM8, KIM, Magento Connector, Calxa Express, Common Ledger, Receipt Bank, and Spotlight Reporting are among the most important ones that can be downloaded through the MYOB App Marketplace.
Pricing begins at ten dollars a month for the most basic option.
Due to the fact that MYOB has been around for such a long time, it has become a well-known brand of accounting software. At the university where I received my degree in accounting, MYOB was the software programme that students were instructed to use.
Due to the fact that it is unique in comparison to their Essentials platform, I shall concentrate exclusively on MYOB AccountRight for the time being.
Desktop-based and requiring a download of the MYOB software onto your personal computer, MYOB AccountRight is an accounting solution offered by MYOB. In addition, if there is a new version available for the software, it must be downloaded every time there is an update.
MYOB is in the process of migrating its AccountRight package to a cloud-based solution; however, this transition is not yet complete. If you use a desktop solution, you are responsible for creating backups of your data and saving them locally.
MYOB also offers a mobile app that you can use to manage your company when you are away from the office.
You may also check to see when invoices have been opened by utilising the MYOB invoicing feature, and using PayDirect enables immediate card payments to be made. A useful function for companies that accept payments via cash on delivery. This will also ensure that you won’t have to chase outstanding invoices, which will result in you getting paid more quickly and saving you time.
MYOB customers can get help over the phone seven days a week. On the other hand, it would be to your advantage if you were willing to wait on hold for a significant amount of time before speaking to someone.
In my opinion, MYOB AccountRight is best suited for larger companies that make heavy use of task tracking and purchase orders and that are responsible for the management of significant amounts of inventory. In the vast majority of cases, these are the only conditions in which I would suggest MYOB to customers.
MYOB Feature List
- Functions both online and off.
- Compute and monitor your tax obligations.
- Keep track of your estimates, invoices, and statements.
- Accept payments
- Keeping tabs on and paying for expenses
- Take care of both your clients and your suppliers.
- Organise bank feeds
- Take care of the purchase orders.
- Utilise a number of different bank accounts.
- Pay employees and keep track of their leave time.
- Time worked by employees should be monitored.
- Estimating the costs of jobs and projects
- Make and keep a record of each each job.
- Take control of the actual inventory.
MYOB is a capable solution; nevertheless, it does come with a number of important restrictions. Because it does not support multiple users, you are unable to restrict access based on the role that a member of your team or an outsourcer plays.
If you share the login information to a member of your team, that person will have complete access to everything, including the information on your payroll and the bank account data of your employees.
Despite the usefulness of the payroll tool, there is no employee portal via which workers may view or print their paystubs, make requests for time off, or modify their banking information.
Having said that, the elements of MYOB that deal with project management are solid. You may, for instance, manage the profitability of your work more effectively with the help of the task costing and project costing capabilities. It is quite helpful for businesses like construction companies who have to balance a number of different expenditures for their projects, such as labour and materials.
Due to the fact that MYOB’s cloud platform lags well behind those of its competitors, our team does not suggest it for use by internet enterprises that are run remotely.
FreshBooks
Freshbooks is a helpful financial tool for freelancers and solopreneurs, despite the fact that it is not a comprehensive accounting software like the other items on this list. Because it is cloud-based, in the same way that other programmes are, you can use it and access your data from any location.
Users may generate invoices, keep tabs on their time and expenses, and organise the information related to their projects—all within the same platform.
Although there have been some complaints of difficulties in importing data, reviewers have generally agreed that FreshBooks is simple and straightforward to use.
The pricing is fair, starting at $15 per month for five customers and rising to $25 per month for fifty customers.
Although it promotes itself as an accounting tool, Freshbooks is not one (which is a bit misleading). It does not come with a balance sheet, and you cannot correct numerous accounts at the same time with it. If you just need an accountant’s help once or twice a year, you’ll want to utilise a different tool so that you can provide them with all of the relevant information when they come to visit you.
The most useful feature of FreshBooks is its adaptability in terms of both the creation and administration of invoices. You also have a lot of flexibility over the appearance of the invoice templates, which allows you to make them correspond to your company’s brand.
You have the ability to create fields that are pre-filled with different invoicing amounts and projects. You can specify each job type as an option in a drop-down menu.
For instance, if you charge $75 per hour for designing and a flat price of $200 for consulting, you can set each job type as an option. Then, all you have to do is select the option to quickly create the field. You can also set up monthly repeating bills, along with conditions that would incur late penalties for any invoices that are past due.
In addition, customers of FreshBooks have access to a variety of apps that were developed specifically to seamlessly interact with businesses. Collections (such as Top Picks, FreshBooks Tested, and Community Built) and Categories are used to arrange the apps on the FreshBooks platform (i.e. Analytics, Connector Tools, Marketing, Payments, Reviews, etc.). Shopify, Squarespace, Zoom, GSuite, Bench, and Gusto are some of the most important apps that are now available.
FreshBooks Feature List
- Personalised invoices (recurring, too)
- Specify due dates and notifications
- Add discounts and request deposits
- Automatic late fees
- Billing in many currencies
- Keeping tabs on and organising expenditures
- Please send in your bids and estimates.
- Request electronic signatures from your customers.
- Convert estimate to invoice
- Maintain a time log for yourself and your team.
- Time should be organised according to clients and projects.
- Work on the projects along with the team.
- Conversations and files can be shared.
- Accept credit cards (multiple currencies)
- Straightforward reporting on your control panel
- Integrations and add-ons are available.
- Apps for both the iPhone and Android
The cost of the service begins at $4.50 per month.
FreshBooks is an excellent tool for new businesses that have little requirements, but you shouldn’t use it if you plan to grow your company in the future.
Beginning with a simple accounting tool is a better strategy if you intend to extend your firm beyond 50 customers, increase the number of staff you employ, and increase the complexity of your accounting demands.
Additionally, the price of the more sophisticated accounting software is comparable, so begin with the one that will fulfil your requirements for the following year.
In addition, there is a learning curve associated with every tool for financial management. If you work with a straightforward instrument for a while, you might get used to it at the precise moment when it’s necessary to switch to another method. Therefore, it is more beneficial to spend your time learning the one that you will use for a longer period of time.
Freshbooks is an option to consider if you anticipate remaining a freelancer for the foreseeable future and are confident that your accounting requirements will not get more difficult.
Accounting Software for Small Businesses: Xero
Xero is an accounting solution that is designed to be used by people who are not accountants. It is constructed with only a single ledger.
The workflow is particularly distinct when compared to that of other accounting tools due to the fact that many bank accounts are imported into the software under separate account numbers. It is user-friendly and easy to understand.
Xero is one of the very few accounting programmes that offers free full-cycle payroll processing for a maximum of five employees. This makes it one of the most unique accounting solutions available.
You are able to process payroll checks, send payroll tax payments, and file your payroll tax forms, in contrast to its primary competitor, QuickBooks, which does not give you this capability.
Xero comes equipped with a plethora of capabilities for financial reporting, which is a very vital function for companies of all sizes. You have the ability to personalise, generate, and keep track of any report you might possibly desire.
In addition, Xero provides its customers with the Xero App Marketplace, which can be easily navigated thanks to the App Marketplace’s Featured Applications, New and Noteworthy Apps, Xero Apps, and Add-ons Collections, which are themselves categorised by Function and Industry. Some examples of useful tools and integrations are Stripe, ReceiptBank, Fathom, Figured, Hubdoc, Fluidly, Gusto, and Expensify WorkflowMax, AutoEntry.
In addition, Xero’s open application programming interface (API) is a strong suit of the software. If you use a service that is not integrated with Xero, you have the option of hiring a developer to construct the integration on your behalf. The documentation for Xero is available to the public and is quite comprehensive, which enables developers to link to other products.
In comparison to the other three programmes, Xero is, in my view, the one that is the easiest to use. In addition, Xero provides excellent online training and assistance, which makes it easier for customers to become familiar with the software and find their way around it. The fact that there is a brief help video at the top of each and every page that you click on is one of the reasons I appreciate Xero.
Because Xero is hosted in the cloud, it enables numerous people to be logged in at the same time. As a result, everyone sees the same data in real time, and there is no additional charge for more users.
The mobile app for Xero gives you the freedom to work whenever and wherever you choose. Because of this feature, it is possible to send bills to a customer before you even leave the job site, which is a huge benefit for enterprises that operate on the move, such as construction companies and handymen.
Regarding the billing process. Online invoicing using Xero enables you to receive payments more quickly, check to see if invoices have been opened, and automatically send reminders for invoices that are past due. Xero has been awarded certification from the Payment Card Industry (PCI), the Data Security Standards (DSS), and the SOC2 organisation.
Xero is designed to make your life simpler by connecting with over 500 different products, as well as providing support for enterprises that deal in many currencies.
Advisors using Xero have access to a locate and recode function at their disposal. You may be wondering why it is significant for those who run businesses. Because of this, your bookkeeper or accountant will be able to swiftly and easily recode transactions that you have erroneously coded, in bulk, rather than one-by-one, which might take hours instead of minutes when using Xero’s discover and recode feature. In other words, you are able to avoid spending money.
Xero Feature List
- Reconciliation of the bank
- Maintain a record of both your consumers and your vendors.
- Simple dashboard
- Keeping tabs on and organising expenditures
- Include supporting documentation with your financial records.
- Financial reporting
- Free and unrestricted support for email
- Control of stocks and supplies
- Invoices can be generated and sent out automatically.
- Applications for mobile devices (Android, iPhone/iPad)
- Multi-currency support
- The processing of payrolls (free up to five employees)
- Orders placed for purchase
- Expenses and bills must be paid.
- Observe and take charge of projects.
- Give out estimates and quotes
- Construct insightful financial reports.
- Accept payments
- Get your bills in an electronic format.
- Organise contacts into groups according to their previous purchases.
- Capitalised assets
- GST returns
Pricing begins at $9 per month for the cheapest plan.
When we think about accounting software, we often compare Xero to an iPhone and other tools to more basic Nokia phones. Although they are technically capable of the same things, the iPhone is more natural to use and requires less instruction. In addition, Xero already has quite a few automated functions pre-installed for your convenience.
Xero’s lack of a free base plan is the single significant drawback to using their software. However, they make up for this by providing free payroll solutions for small businesses and by allowing you to invite an unlimited number of users to access your data – all of which is done at no additional cost to you. This is how they make up for this.
Our Final Recommendation
Xero comes highly recommended by our team, which is not a secret. Some professionals recommend Xero to all of their customers because they believe it offers the optimal combination of features and advantages. However, we are aware of the possibility that this course of action is not the best choice for you. Pick the tool that caters to both your needs and your process the best.
