The Best Accounting Software For Startups

The Best Accounting Software For Startups

I’m often asked what the best accounting tools for startups are. We almost always recommend QuickBooks to our clients, but there are several options to choose from. In my experience, the real question is what is the best accounting solution for your particular startup? The answer comes down to a few questions:

The answers to these, and of course your constraints in terms of how much you can afford to spend on a solution as well as how much ongoing support you’d like will help you narrow the options. Here’s a quick overview of the leading accounting software tools.

QuickBooks

An easy to use, feature-rich, inexpensive system that more than 80% of our clients use. The software comes in several versions: three desktop variants plus a stripped down online version. Pricing for QuickBooks Online starts at $12.95 a month for the entry level option and increases from there depending on whether you want to include other functionality: for instance, payroll, bill-paying, and tax filing capabilities.

There’s an initial learning curve, especially if you’ve never been exposed to accounting, but once you pick it up, it’s straightforward. QuickBooks also offers integration with a range of third-party software applications. It’s online version is good, but we prefer the more robust hosted version for our clients.

Another benefit of QuickBooks is that it scales. You can start with a basic version and then add more sophisticated products as your business gains in complexity.

Xero

A cloud-based solution for small to mid-sized businesses. With an emphasis on mobility, Xero Touch is available as an iOS app and on Android, and real-time data capture, Xero costs less than QuickBooks does, has good integration with a range of other applications (including payroll, invoicing and POS systems), seamless connectivity with your banking transactions, plus receipt uploads and mobile invoicing capabilities. Pricing can start as low as $9 a month, but expect to spend $30 for additional features like payroll and reconciliation of banking transactions.

Wave Accounting

A free, cloud-based tool for very small (fewer than 10 employees) startups, independent contractors, or sole proprietors. This is the simplest of the options. It offers basic accounting functionality (bookkeeping, double-entry accounting, and journal entries) and connects to your bank accounts for automatic transfer of transaction data.

This is definitely not an exhaustive list, and there are a bunch of other solutions available, but it’ll give you a sense of what to consider. Some things to keep in mind:

David Ehrenberg is the founder and CEO of Early Growth Financial Services, an outsourced financial services firm that provides early-stage companies with accounting, finance, tax, valuation, and corporate governance services and support. He’s a financial expert and startup mentor, whose passion is helping businesses focus on what they do best. Follow David @EarlyGrowthFS.

What software are you using and why? Tell us about it in the comments section below or contact Early Growth Financial Services for accounting and finance support.

Contact Us Button for CTA

Liked this post? Join our mailing list to get our posts on startups sent directly to your inbox.

Related Posts:

chatCONTACT US today for a free consultation to discuss the financial pain points of your business.