Updated: May 22, 2020
>>> One: Accounting / Bookkeeping
>>> Deep Dive: The Top 3 Accounting & Bookkeeping Systems [YOU ARE HERE]
>>> How-To: Setup Your Accounting & Bookkeeping Software [coming soon]
>>> Two: Invoicing / Billing / Point of Sale
>>> Three: Workload Management
>>> Four: Customer Management [coming soon]
>>> Five: Domain Name / Website / Social Media [coming soon]
QuickBooks is the dominant player in this space. Everyone thinks of QuickBooks when you say "small business accounting software". And there's a reason - it's been around the longest, and it's very good at the things it does.
QuickBooks is produced by Intuit - a Californian software company dating all the way back to 1983. So they've been around the block and have been building software for about as long as software existed. A version of QuickBooks has been on the market for over 20 years.
The system offers just about everything a small business owner needs to keep up with their money: managing income, managing expenses, tracking bills, tracking miles, invoicing customers, managing payments, paying contractors, paying employees, managing cash flows, tracking time, tracking inventory, calculating taxes - and the list goes on. All this in one system. Plus a large selection of pre-built reports so that you can easily see how your business is operating. no more calculator and spreadsheets!
There is one big con to QuickBooks: you will outgrow this system (eventually). Theoretically, all businesses are trying to grow to make as much money as possible. Assuming that is the case, there is no question about it - you will sooner or later have to replace this accounting system. And there is never a good time in your business to replace a mission critical piece of software, especially when you're trying to scale.
The primary reason a business will eventually outgrow QuickBooks is simple: the system is designed to handle the accounting needs of small businesses - and not just any small business, all small businesses. And that's the key. As a business develops, industry-specific needs crop up. You may have to track expenses against serialized inventory. You may need to know job cost amortized in some quirky way. Or you may have a system necessary to run your type of business that can't connect to QuickBooks.
Despite the con, QuickBooks is an excellent solution to keep track of your business in the growth, small and medium phases of the company. Don't let the fact that you'll outgrow the system scare you from using it. It's tailored to exactly what the small business owner needs, and no one stays on top of a software industry since the '80s if they're not good.
QuickBooks - starting at $12/mo
HOW-TO Set Up and Track Your Finances With QuickBooks [COMING SOON]
There are definitely reasons to look at options other than the giant in the room.
FreshBooks was created as part of a start up founded in the wake of the initial dot-com bubble burst (early 2000s). And as a result of their founding later than Intuit, they take a more unique approach than QuickBooks.
FreshBooks acknowledges they are not and cannot be the best at everything. Their angle is they make the platform exceedingly simple to connect with other systems and apps. FreshBooks started targeting services-based businesses and excelled early at time capture and customer invoicing.
While they have continued to add features to build out their own platform, FreshBooks has always made it very simple to connect to other leading apps to take care of things like taxes, expenses, etc.
In a similar vain, FreshBooks also has an extensive suite of content you can customize specific to your business. Via point-and-click configuration, you can add custom fields to track details about your company that may not be included in prepackaged software solutions.
In short - FreshBooks is a more flexible platform that will allow you to be more dynamic in how you run your business over time and adapt to growth. End users say the interface and learning curve are also less steep than QuickBooks.
However, there is no doubting that QuickBooks is a more complete, more robust system that will fulfill all your needs in a single piece of software (at least until you outgrow it), whereas FreshBooks will most likely have to be paired with other systems over time.
[shameless plug - that's where we come in to help! let us help connect the gaps in your systems and tell you what you need to run your business most efficiently - reach out today]
FreshBooks - starting at $8/mo
HOW-TO Set Up and Track Your Finances With FreshBooks [COMING SOON]
Wave is the baby of the group - the latest player to the game in our trio. The company was not founded until 2009, but is the only one of the group that offers a truly and 100% free version.
If you need a completely free way to handle accounting, invoices and receipts - this is your option. The Wave system is specifically targeted at businesses just starting out, between 1 and 9 employees specifically. And if you need it, you can pay competitive rates to add credit card processing and/or employee payroll onto the system as well.
Solopreneurs - this is for you. This is for anyone that doesn't need too much and isn't interested in paying the hundreds of dollars a year for one of the other systems. This is also a great system for independent retailers, freelancers, small services firms - any group just needing to keep up with the financial basics.
As you probably guessed, free does come with a cost. And that is lacking features and support.
While QuickBooks and FreshBooks have extensive communities with tutorials, guides, support - both online and via phone/email - Wave is a little bit lacking here. This can make it more difficult to figure out how to make the system work for your business. Additionally, Wave does not include as many robust and integrated accounting features included in the previously listed products.
And while Wave will definitely handle the basics, don't expect to scale the business with this platform - you will definitely have to upgrade down the road.
Wave Financial - free for basic
HOW-TO Set Up and Track Your Finances With Wave [COMING SOON]
Confused? Questions? Just ask! firstname.lastname@example.org.
Ready to move on to step 2? Check out our next deep dive: Invoicing / Billing / Point of Sale.