Accounting can be a time-consuming chore for small business owners, but a necessary one in order to track, manage, and optimize your business' growth over time.
Sooner or later (and the sooner, the better), you’ll need to invest in a small business accounting software and system to manage your cash flow and prepare for tax time.
From bookkeeping to invoicing to tracking expenses, there are a lot of different things to consider when choosing the right software for your needs—and it's an important choice, because it can seriously simplify your small business finances.
That's why we’ve put together this list of popular small business accounting tools and Shopify apps to help you pick the right accounting system for you. Looking for help with product design instead? Check out our list of the best prototyping tools.
Brush up on the accounting basics with Small Business Accounting 101: Ten Steps to Get Your Startup On the Right Track.
Choosing Accounting Software For Your Small Business
Intuit Quickbooks Online is considered the standard when it comes to small business accounting and bookkeeping software, offering many of the features and bookkeeping functionality most types of businesses need with the added benefit that your accountant is probably already familiar with it.
Quickbooks makes it easy to select and pay for the features you need for your specific purposes, from:
- Managing bills from vendors and suppliers.
- Expense tracking (including the ability to snap and save receipts through the app)
- Inventory tracking
By connecting your bank account to Quickbooks Online, your account activity gets downloaded and categorized in Quickbooks, saving you the time it would take to reconcile and compare your records with your actual account activity.
You can take Quickbooks online for a test drive with a mock business to see it in action.
Price: $15 to $40 per month
Freshbooks is a popular invoicing solution with built-in expense management and time-tracking features, as well as the ability to accept payments from clients.
Naturally, this makes it great for freelancers, agencies, and other service-based businesses with the ability to automate late payment reminders to customers, manage your different clients and projects with pricing that's based on the number of active clients you have at a time.
Freshbooks is known for being user-friendly and providing stellar customer support when you need it, and is an easy choice if you sell services rather than products.
Price: $15 to $50 per month
Xero offers a wide breadth of accounting tools that include everything from bookkeeping to paperless expense management and the ability to get paid in over 160 currencies with automatic conversions and exchange rates updated hourly.
Xero lets you send invoices and quotes, as well as automatically reconcile your accounts, as you'd expect from a good accounting software. But the availability of inventory tracking and the ability to make purchase orders to your supplier on affordable plans makes it a good option if you are selling products online or offline.
Xero also offers you a directory of "Xero Champions" to work with—accountants and bookkeepers that specialize in different industries from retail to wholesale to professional services and more.
Price: $9 to $70 per month
4. Zoho Books
Zoho Books is part of the Zoho collection of business software that also includes a CRM, help desk and, in this case, bookkeeping applications. So if you are already using or plan to use other Zoho tools, particularly their CRM, it might make sense to use their business finance software too.
You get most of the features you'd come to expect from a bookkeeping software, plus time-tracking and other features that are perfect for selling services and not just products.
Price: $9 to $29 per month
Accounting Apps For Your Shopify Store
If you are a Shopify merchant, you might be manually copying over sales and customer data from your store to another bookkeeping software or a spreadsheet.
However, there are apps that can automate the flow of data, give you access to important inventory, financial, and customer data, and free up time that you can then spend growing your business.
5. Connector Apps
Getting your various software solutions to "speak" to one another can save you a lot of time and help you automate the transfer of data from one application to another or from you to one of your business partners.
That's where "connectors" or integration apps come in.
The following connector apps let you seamlessly export product, payment, tax, and customer data with a single click, saving you from the monotony of manual data entry.
There are connector apps for:
- Xero ($5 a month)
- Quickbooks (Free)
- Zapier (Free to $125 a month depending on your usage)
- OneSaaS ($29 to $99 a month, depending on the volume of your business).
Integration cloud solutions like Zapier and OneSaaS offer a good alternative if you're stumped to find a way to connect your different software or automatically update data in your spreadsheets.
Plus, you can also use the service to automate other workflows across your business.
Without accounting for the cost of goods sold (COGS), you won't be able to track the real profit you net from each sale or the true value of your inventory.
SimplyCost is a simple and affordable Shopify app that lets you generate profit-based reports based on cost of goods sold.
You can set the cost of your goods for specific variants and even time frames within your sales history to paint an accurate picture of your actual profit.
Price: $4.99 per month
Profiteer is another Shopify app that can help track COGS of your products and variants. It doesn't integrate with accounting software directly but you can export a CSV report that shows the total cost of your inventory or even profits within a certain time frame.
You can even apply your cost pricing to your previous sales history.
It accounts for currency fluctuations as well, so that you have an accurate idea of your true profit at any given time if you don't sell in USD.
Price: $15 to $30 per month
Xporter isn’t an accounting tool specifically, but it is a great way to create almost any kind of report you want by exporting your store’s data into an Excel file. It can also give you data and fields that you wouldn't have access to in your store by default.
You can automate these reports to be emailed to yourself, your supplier, your accountant or anyone else who's involved with your business on an ongoing basis.
In the words of one user:
“This app helps me generate reports any which way that I like. By date, country, fulfilled or not, product, and so much more. It is 100% customizable. I can use the Excel file (or CSV) to send to my supplier, or use reports for my own benefit."
Price: $7 to $45 per month
Find an Accounting System That Works For You
Factors ranging from the size of your business, your industry, your employees, whether you sell products or services or both, among others, are important to consider when choosing an accounting system that works for your business and your budget.
If you don't need all the extra features, such as payroll management, then you can choose a simpler solution that gets the job done. On the flip side, you might also want to consider software that's able to scale with your business as you plan for growth.
As always, when investing in any software as part of your business' technology ecosystem, it's important to do your due diligence and know exactly what you're paying for.