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Helpful Accounting Tools for Small Businesses to Help You Keep Track of Your Finances as an Entrepreneur

There are all kinds of accounting tools for small businesses out there. But how will you know which one is right for your needs as an entrepreneur or freelancer? We'll help you find out in the article below.

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There are all kinds of accounting tools for small businesses out there. But how will you know which one is right for your needs as an entrepreneur or freelancer? We'll help you find out in the article below.


Do you own a small business? Are you a freelancer? Or perhaps you're simply wondering which are the best accounting tools for small businesses? Due to rapid technological advances, there are so many apps that you could choose from. But this presents a dilemma. How will you know which software to choose and prioritize?

You need to analyze your needs comprehensively and leverage the best software for you.

What to look for in accounting tools for small businesses

Here are some of the parameters you should consider when choosing accounting software:


  • The software should enable you to record what you have paid, what customers owe you, and what you owe vendors or suppliers.  It should also help you manage your accounts payable, receivable, and operating expenses.

  • Good software should help you keep track of all cash transactions by recording them using the cash accounting method.

  • An ideal accounting tool for small businesses should always have a good payment gateway that makes it easy for customers to make payments. You should offer multiple convenient payment options such as online bank transfers, mobile payments, and debit and credit cards. The software should also generate invoices and receipts as proof of payment.

  • Since bank reconciliation is also important for your accounting, the accounting software you use should be easily linked with your bank account to help you retrieve bank statements with ease.

  • Your software should also help you generate tax statements at any time. The software should help you be tax compliant all the time.

 The following are ideal examples of accounting tools for small businesses that you can use for your business depending on your needs and wants.


Quickbooks Online

 It’s one of the most famous accounting tools for small businesses. Most businesses use the software for accounting and there are endless online and training resources to help you learn how to use the software. It has one main dashboard where all accounting features can be conveniently accessed.

All QuickBooks plans include mileage and expense tracking, sales and tax reporting, and tools to manage contractors. You can also track inventory, support up to 25 individual users, and access a dedicated customer support manager.


  • Very common

  • Can be accessed on mobile

  • It is cloud-based

  • Can be scaled

  • Enables you to share information with your accountant easily

  • There’s a lot of information online on QuickBooks from different experts, articles, and tutorials.

  • Easy inventory management with QuickBooks Online Plus and Advanced

  • Double-entry accounting


  • Occasional syncing problems with banks and credit cards

  • Upgrade required

  • The different QuickBooks plans allow only a limited number of account users

  • Monthly plans are pricier than other accounting software options


QuickBooks Self-Employed

If you’re a freelancer or a part-time worker this is just the software for you. It helps them track their income and expenses for their tax returns.  It reduces the arduous task of keeping up with adding up their income and sorting through expenses annually. The software adds up all the business transactions automatically.


  • You can differentiate between business and personal expenses

  • Mobile app

  • Cloud-based

  • You’re able to track mileage.


  • Limited reporting

  • Data can’t be transferred to other accounting software



This software has a clean interface and it can be integrated with a third-party payroll service. Businesses can collect payment online from customers through Xero’s integration with Stripe and GoCardless.

It’s an intelligent accounting software for small businesses that allows multiple-device syncing and offers updates in real time. This gives business owners the latest information wherever they are.

Xero can also handle a range of accounting tasks, including payroll, expenses, billing and invoicing, sales tax calculation, and many other features.


  • Payroll integration with Gusto

  • Simple inventory management

  • Mobile app

  • Cloud-based


  • Limited customer service

  • Limited reporting

  • Fees charged for ACH payments



It gives you many options for invoicing especially for service-based businesses. You can customize your invoicing better than when you’re using other software. Primarily you can send, receive, print, and pay invoices and it helps you with other bookkeeping needs as well.  FreshBooks is a good partner for small service-based businesses to send proposals, track timelines on projects, and receive payments.

This is one of the accounting software for small businesses that automatically reconciles credit and debit amounts and can automatically import data from a range of sources. You can also access important financial statements for your businesses like cash flow statements, balance sheets, and income statements.


  • Advanced invoicing features

  • Third-party app integration

  • User-friendly interface

  • Cloud-based

  • Affordable


  • The mobile app has limitations

  • Low-tier plans don’t allow for bank reconciliation or accountant access

  • Doesn’t provide quarterly tax estimates



Wave helps small service-based businesses send simple invoices. It has lots of cool free features that can help freelancers and small businesses. As a bonus, the software helps you compile a comprehensive year-end report especially when you’re filing your tax returns.

Wave is available for Windows and macOS and with Android and iOS apps for invoicing and receipts. It’s one of the accounting software for small businesses that’s free. It makes it easier for companies that are just starting and don’t have a lot of capital.


  • Unlimited number of users

  • Free accounting, receipt scanning, and invoicing

  • Run multiple businesses in one account

  • No transaction or billing limits


  • No advanced accounting options

  • No phone support and live chat support is only available for paid add-ons (Wave Payments and Payroll)

  • No regular planned updates


Conclusion: Choose customizable accounting tools for small businesses

Assess your needs as a small business. Evaluate the different apps, the cost, capabilities, features, and most importantly how they can be customized for your business needs. If you can afford it then go for nothing less than the best. 

Written by

Wahome Ngatia

Peter Wahome Ngatia is an all rounded Marketing Specialist who deals in Graphic Design, Social Media, SEO and Content Writing. My passion is to use my skills and knowledge to help African businesses grow and thrive so that we can create employment for the youth. I also want to churn helpful content that inspires millennials to go hard after their dreams. Mantra: You learn more from failure than success.

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