Tracking expenses, paying employees, staying compliant with IRS regulations—bookkeeping is essential to efficient business operations. When you have a good system set up, it’s easy to stay on top of your cash flow, profits, and more. Finding the best apps for bookkeeping is the key to hitting the ground running.
Small business owners just starting out might not know how to set up their own bookkeeping system. If you’re new to running a business, or have decided to start freelancing, it can be overwhelming. That’s why small business accounting and bookkeeping apps are so handy. No matter where you are, you can manage your financial details.
Why you need a small business accounting app
Owning a business means keeping an eye on your financial situation at all times. Your finances affect every decision you make, from whether you can afford certain supplies, to where to take your client for lunch. When you get established, it determines how many employees you have, whether you want to invest some of your surplus funds and how you might expand the company.
By keeping accurate, up-to-date financial records, you’ll have a clear snapshot of your company’s financial health. This is accomplished through traditional bookkeeping measures like income and cash flow statements, balance sheets, and more. Using a small business accounting app is an easy way to keep track of your finances—most come pre-programmed to generate common bookkeeping reports.
What to look for in small business accounting apps
When you’re looking for the best apps for bookkeeping, know that the answer depends on what kind of features you need. It’s worth sitting down and listing your main types of transactions. For example, do you pay yourself with a paycheck? Do you need to track assets and inventory? Will you require invoicing and payments, or submit your own quarterly taxes to the government?
Next, think about what kind of integration you’ll need. Most apps offer integration with popular software and business tools, to help track your finances in real time. On the other hand, if you’re simply keeping track of freelance jobs, you might not need to integrate with anything else. Many people try a few different apps to see what they need once they get started.
Best bookkeeping apps for small businesses
Here are some of the best bookkeeping apps for small businesses.
QuickBooks is a widely popular accounting program, and it now features an app. It’s suitable for everyone from freelancers to large-scale firms. Many people don’t need to look past QuickBooks, since its robust features can help manage just about any business.
Plans start at $30 per month for the “Simple” plan and go up to $200 per month for the “Advanced” plan. Even the most basic plan tracks income and expenses, invoices and payments, tax deductions, general reports, receipts, mileage tracking, cash flow, sales and sales tax, estimates, and contractor payments. Users can choose to use the Windows, Mac, or online apps.
This app is free, and has both online access as well as a smartphone app. There are some paid features, such as payroll, payment processing, and bookkeeping support—but the free features are usually enough to support most independent contractors and freelancers. Free features include live bank connections, income and expense tracking, invoicing, collaborators, and multiple business tracking.
If you need ACH and credit card processing, payroll or bookkeeping support, you’ll need to pay. The latter costs $149/month, while payroll and processing are on a per-transaction basis. These features are often pricier than competitors, so you might want to try another bookkeeping app instead.
InDinero offers full-service accounting and tax preparation services along with their software. The company asks business owners to reach out for a specific quote, although the “Essential” plan starts at $300 per month, and the “Growth” plan starts at $900 per month. While expensive, the cost of business taxes is included in the fees.
The most basic plan offers day-to-day bookkeeping services, financial reports, and cash basis accounting. Larger plans include accrual accounting, scalability, revenue recognition, budget analysis, and more. InDinero is best suited to established, sophisticated small businesses hoping to take their company to the next level.
FreshBooks is great for simple accounting for freelancers. The pricing starts at $15 per month—but if you have more than five clients, you’ll need to upgrade to the $30 per month Plus version, which handles up to 50 clients.
The app allows business owners to create client profiles and account statements, a client self-service portal, automated recurring invoices, unlimited estimates and invoices, and late payment reminders, as well as process online ACH transfers. It also tracks mileage, creates tax time and business health reports, and manages budgets and billing. This is a top pick for freelancers and sole proprietors—it’s reasonably priced, scalable and offers plenty of features. However, some users have reported being double-charged, with no resolution.
Xero is great for independent contractors. Plans start at $12 per month and go up to $65 per month. The cheapest plan allows users to enter five bills, send up to 20 invoices, track bills and receipts, and analyze their short-term cash flow and overall financial health. The mid-range plan allows unlimited quotes, invoices and bills. If you need payroll services, Xero allows you to add on Gusto at an extra $40 per month. Plus, the app has over 1,000 integrations available.
Keep in mind that Xero does not offer payroll tax support. Customers also report that the prices continue to increase—but because the plans are affordable, that may not be a drawback for many freelancers.
Bench is an accounting app and bookkeeper all in one—perfect for small business owners who need full-service accounting support. Plans range from $249 to $500 monthly, with discounts if you pay annually. This includes your very own human bookkeeper, which none of the other apps offer. The “Premium” plan also offers income tax support.
Keep in mind that Bench doesn’t include accounting services. It does, however, provide everything your accountant will need to prepare your taxes. Corporations will need to use the “Premium” plan, which is only available when you sign an annual contract. That’s the biggest downside to Bench—but if that’s not a concern, you’ll enjoy their plentiful, easy-to-use features.
Ultimately, all of these bookkeeping apps offer great features at reasonable prices. Most offer multiple plans, so your software can scale along with your business.
Get small business banking support with NorthOne
Now that you know all about the best apps for bookkeeping, open a business banking account with NorthOne today. We pride ourselves on offering the best banking for freelancers and other small business owners. Our app is great for small businesses, independent contractors and freelancers—whether you integrate with your new bookkeeping software or use it independently, it’s easy to track your business finances.