The Best Accounting and Invoice-Generating Software for 2024

Accounting software digitizes the financial management functions of a business. It automates tasks like tracking income and expenses, generating financial reports, managing accounts payable and receivable, and reconciling bank records. By utilizing accounting software, small businesses can save time, reduce errors and make more informed financial decisions. Accounting software can provide valuable insights into a business’s financial health, as well as accurate records for tax preparation.

Properly managing your business’s finances is no small task. The right accounting software can take a lot of pain out of the process. Here are several key advantages to using accounting software:

Organized finances

An individual may be able to manage their personal finances on the fly, but recording transactions haphazardly and relying on bank statements won’t cut it for a business owner. But small businesses need to keep all their finances organized to prevent any negative surprises. Accounting software can help achieve that. It organizes and stores your financial data in one central location. Many time-consuming accounting processes can be automated, eliminating the likelihood of mistakes.

Cost-effective solutions

Accounting software doesn’t have to be one of your biggest expenses. There are several price points that meet the needs and budgets of small businesses. We’ve highlighted free solutions too. Many are easy to set up and don’t have a steep learning curve, which means you can learn the software quickly and start managing your business’s finances.

Compliance with tax laws

Trying to configure business taxes can be extremely overwhelming for small business owners. Accounting software takes the guesswork out of filing taxes. Many of these programs calculate sales tax and prepare and file a variety of tax forms. That frees you to concentrate on running your business.

Improved Internal Controls

Internal controls are the procedures and measures implemented by an organization to ensure the integrity of accounting and bookkeeping. Accounting software can help prevent and detect fraud by increasing the reliability of your controls. This can reduce the probability of theft and loss of assets.

Most accounting software programs offer an array of plans to fit your business’s needs and budget. The plans typically differ in price, features and number of users who can access the software.

• Subscription pricing: A subscription pricing model, which has become the industry standard, bills you monthly or annually for services. With this model, you have access to all the software’s updates as soon as they are released. Depending on the service plan you choose, subscriptions range from $5 to $60 per month.
• Fees: Occasionally hidden fees pop up in certain areas, such as accepting payments online, software integrations and technical support services. To avoid overpaying for features you don’t need, make a list of what you’re looking for in an accounting system. As with grocery shopping, creating a list will prevent you from overspending.
• Free options: Some accounting programs, such as Wave, are entirely free, whereas others, such as QuickBooks, offer basic free tiers. When searching for accounting software, take advantage of free trials and demos. This will help you see how easy the software is to use and how well it is suited for your company.

Selecting the optimal accounting software is crucial for a small business’s financial health. This step-by-step guide will help you make an informed decision.

1. Identify your business’s needs

Accounting software providers often specialize in different industries or functionalities. For example, FreshBooks excels at invoicing and helps service-based businesses, while Sage is widely used in the construction industry. Consider your industry, transaction volume and essential features like invoicing, expense tracking, payroll or inventory management. Also, ascertain that your accountant is familiar with your chosen software provider.

2. Compare different solutions

Research and compare different software. Explore their features, pricing and scalability. Look for a user-friendly interface that doesn’t require a huge learning curve. Additionally, consider how well the software integrates with other business apps that you use, including payroll software.

3. Test the software

Request demos from your top options and take advantage of free trials. Test the software’s functionality, assess its ease of use, and evaluate how it accommodates your data import and export needs.

4. Review user testimonials

Third-party user review sites, including Trustpilot and TrustRadius, contain feedback and ratings from actual customers. Use these insights to identify any strengths and weaknesses that could affect your business.

There are many aspects of accounting software that make it a useful tool. Most online accounting programs offer A/R, A/P, banking and reporting features. Some even include tools for inventory management, project management, time tracking and payroll. Here are some core elements of accounting software you should look for.

Bank Feed

This feature allows you to connect to your business bank and credit card accounts to receive a daily update of your transactions. This saves you the time it would take to manually upload statements into the system, and it gives you a daily overview of your accounts. This feature also assists with reconciliation, making it a small daily task rather than a monthly ordeal.

Dashboard

When you log in to your account, you’ll be greeted by a dashboard with an overview of your account activity and key metrics, such as cash flow, P&L, account balances, expenses, A/P, A/R and sales. Some software lets you customize what you see first by rearranging the information.

Online Invoicing

If your business sends invoices, the ability to email them and accept online payments can help you get paid faster. Some accounting programs integrate with third-party payment processors, whereas other vendors require you to use their in-house processing services.

Recurring Invoices

With this feature, you can schedule the software to generate and send invoices for recurring charges automatically, such as subscriptions. You can choose how frequently invoices are sent – daily, weekly, monthly or annually – and indicate whether there’s an end date to the billing. Many accounting software providers don’t have recurring invoice functionality (we’ve noted in our reviews which ones do).

Automatic Payment Reminders

This feature reminds your customers about upcoming and past-due payments. Some have sample email text you can use as is or customize. You can then choose when you want the reminders to be sent. Some programs also give you the option of sending thank-you emails to customers after you receive their payments.

Bank Reconciliation

Smart reconciliation tools identify potential matches between your bank transactions and the bills and invoices you’ve entered into the software, saving you the hours it would take to sift through records. You can then approve or deny the suggested matches. The best products we reviewed suggest potential matches as you reconcile your accounts, and a few also include a reconciliation feature on their mobile apps.

Bank reconciliation is a key productivity tool offered by most accounting software. Source: QuickBooks

Financial Reporting

Every accounting program generates financial reports. Some are more basic than others, and some require you to subscribe to a higher plan for advanced reporting. If you need specific types of financial reports, make sure they’re included in the program and plan you choose. Detailed reports can help you interpret your financial data to make informed business decisions.

Integrations

The ability to connect your accounting software to the other business programs you use saves you the time of manually transferring data from one system to another. Highly rated payroll services, payment processing platforms, top point-of-sale systems and customer relationship management software are some popular types of integrations you may want to look for. Integration with systems you already use also cuts down on training time for employees.

Tracking for Billable Hours

If you’re a consultant or your business is an agency that bills clients by the hour, you want accounting software that allows you to track and bill your time or integrates with the time-tracking program you already use. This is an especially important feature for freelancers.

Inventory Management

If you have a retail or distribution business, you’ll want accounting software that tracks inventory and helps with purchase ordering. You may need to subscribe to a top-tier plan to get this feature. If you need more advanced inventory features, the best inventory software options feature a dedicated inventory management system.

Mobile Apps

Not every accounting and invoicing program has mobile apps, but the best ones do. However, there is quite a bit of variance in app capabilities. Some can capture receipts for expense tracking only, several allow you to create and send invoices, and others have almost every feature the web-based software does. As mobile work becomes increasingly convenient, it’s worth verifying that a company offers a mobile app with its software.

Mobile apps allow you to perform accounting functions on the go. Source: Xero

Project-Based Billing

Firms, freelancers and consultants who work with clients on projects or jobs should look for accounting software that helps them track tasks and budgets. The software should allow you to invoice customers for tracked time and rebill them for project expenses.

Support for Multiple Businesses

Several programs we reviewed allow you to add more than one business to your account, though some of them charge extra for this convenience.

While both accounting and payroll software are essential for managing your business finances, they serve distinct purposes.

Accounting software is a broader tool that tracks your overall financial health. It records income and expenses, and generates financial reports such as income statements and balance sheets. Accounting software also manages accounts payables and receivables.

The best payroll software is specifically designed to manage employee compensation. It calculates salaries, wages, taxes and deductions. It also generates pay stubs, handles direct deposits and often interfaces with tax agencies.

Many businesses find it beneficial to integrate their accounting and payroll software. This can streamline processes, reduce errors and provide a more comprehensive financial overview. Some accounting software packages offer built-in payroll features, while others allow integration with third-party payroll providers.

Zoho Books

Small business owners must contend with a long to-do list, which is why automating financial processes makes life much easier. We like that Zoho includes a smorgasbord of automation features, including tools for workflow, invoice reminders, in-app notifications and a scripting language to create custom functions. That emphasis, as well as the strong slate of standard accounting and bookkeeping tools, makes Zoho our best pick for automating processes.

Wave Financial

If you’re a freelancer or the owner of a small business that doesn’t store much inventory, we think that you should consider Wave as a free option. With Wave, there are no monthly or annual fees or software license, although add-on services cost extra. This gives you the flexibility to start using the software with no upfront cost and add features only as you need them. We found that Wave provides a solid slate of basic features and is easy to use, making it our choice as the best free accounting software

Wave Accounting is one of the few free accounting software providers. Source: Wave 

Melio

Some businesses just need a simple way to manage A/P and A/R. They don’t want an overly complicated or costly system. All they need is software to send and track invoices and ensure that they get paid. That’s why we included Melio and its free A/P software as our best pick for bill management. In our view, Melio may not be well suited for large companies, but it’s ideal for small businesses looking for a free payment management solution. During our testing, we found that adding vendors and scheduling payments from Melio’s network of 7,000 vendors was a breeze.Add integration with QuickBooks to the mix, and it’s easy to see why Melio is our best pick for bill management.

Plooto

To scale up your business, you need to spend less time on tedious tasks, such as A/P and A/R. Plooto is an all-in-one payment platform that provides greater financial control and simplicity by unifying payments, approvals, reconciliation and reporting. We appreciate that Plooto’s workflow automation reduces errors, expedites your A/P process and improves how vendors get paid. It also offers end-to-end A/P and A/R automation, which is why it’s our choice as the best accounting software for payments.

Neat

Neat is accounting software that provides all the bookkeeping and invoicing basics. Originally known for its text-parsing technology, Neat deftly incorporates financial document management into its accounting offerings. Despite the rise of electronic recordkeeping, some business owners – either by habit or necessity – may still deal with large amounts of physical paper. We love the software’s text-parsing technology, which matches up data from your bank records to the physical paper records, saving huge amounts of time and hassle from errors. In our view, Neat is the best choice for document scanning.

Striven

For businesses operating in global markets, Striven is a powerful accounting ally. We were impressed by its ability to handle multiple currencies, accommodate international tax complexities, and provide real-time financial data across borders. The software can seamlessly manage transactions in various currencies, eliminating the need for manual conversions or separate accounting systems for different regions. For a business that spans multiple countries, Striven simplifies operations and fosters collaboration between employees scattered across the globe. These robust capabilities make Striven our best pick for international businesses.

To determine the best accounting software on the market, our team of finance experts and software analysts evaluated an initial list of 306 platforms. After whittling our list down to 31, five accounting software programs were chosen as our top recommendations. Our experts and analysts studied each solution’s functionality and evaluated the products on more than 25 factors.

These factors were broken down into categories and were weighted differently in our overall conclusion. The weights were determined based on how much business owners prioritize these criteria when shopping for business software and services and making purchasing decisions.

• Pricing (30%): Our experts and analysts compared and contrasted each vendor’s plans, judging which packages offered the best bang for your buck. We took into account monthly subscription fees, extra charges and the costs of add-on services like additional users.
• Features (25%): We looked for standard accounting software functions like bank reconciliation, invoice creation and inventory tracking. We also assessed the available integrations and awarded extra points for advanced services, like AI-powered tools.
  
• Ease of Use (20%): We tried the software solutions ourselves, gauging each platform’s learning curve, user-friendliness and customization options. We also considered whether there was a fully featured mobile app for managing accounting tasks on the go.
  
• Customer Service (15%): We evaluated the range of customer service options, including whether phone assistance was provided with all package tiers. We also examined each vendor’s online resources for businesses interested in self-guided help.
  
• Expert Analysis (10%): Given that our finance experts know and understand accounting software better than anyone, their personal insights from years of experience and hands-on testing were also considered when deciding our best picks.

Based on these criteria, we not only determined which accounting software our readers could trust but also the ways in which each solution could best serve different business needs. Some platforms were better at certain tasks than others or more suited to a particular type of company. These takeaways informed the “Best for” use cases you see on this page.

To learn more about our methodology, see our full editorial process.