Choosing the best accounting software for your small business: a complete guide (2025)

Running a business involves many moving parts like sales, marketing, operations, and accounting. Over time, most small business owners focus on revenue-driving activities and neglect the tedious, time-consuming task of manual bookkeeping. 

However, without clear financial oversight, cash flow problems creep in, sometimes when it’s already too late. This is where an accounting software proves invaluable. It not only saves time but also helps business owners stay in control of their finances without getting bogged down by the accounting tasks they dread.

What is an accounting software?

An accounting program is a tool that helps businesses record, track, and manage their financial transactions efficiently. From creating invoices and tracking payments to generating financial reports and preparing for tax season, these tools are designed to make financial management easier, faster, and more accurate. 

Why do small businesses need an accounting software

In 2024, SCORE reported that 82% of small business failures were linked to cash flow mismanagement. Most of those businesses didn’t start with bad ideas. They just didn’t have a clear view of their money. Invoicing delays, expense blind spots, and poor tax preparation continue to hurt owners who rely on spreadsheets or outdated systems.

Accounting software gives structure. It helps businesses monitor revenue and costs, anticipate cash shortfalls, prepare for tax season, and keep up with customer payments. For startup owners without finance backgrounds, it also simplifies reporting and reduces decision fatigue.

When should you get an accounting software?

The best time to invest in an accounting software is the moment you start your business. The second best time is now. According to various research, businesses that implement sound financial management early are more likely to survive their first five years than businesses that don’t. Financial management is not something to do later. 

Having the right tools in place helps you track expenses, stay organized, and make smarter decisions. Waiting too long can lead to disorganized records, missed tax deadlines, and cash flow problems that are harder to fix later.

Plus, if you're seeking a loan or investor funding to grow your business, having accurate, well-managed financial records through accounting software can greatly improve your chances of securing capital.

Accounting software vs accountant: Which is better?

This is a common question many small business owners ask—and the truth is, both options offer unique benefits. The better choice often depends on your business size, stage, budget, and your specific financial goals.

For most small businesses, a hybrid approach works best. Use an accounting software to manage day-to-day bookkeeping, such as tracking expenses, generating invoices, and monitoring cash flow. Then, involve an accountant for more complex tasks like tax filing, financial reporting, or strategic planning.

However, as your business grows, using both simultaneously becomes a powerful combo. Your software handles routine tasks and provides a cloud database for your records, your accountant provides personalized support

What are the factors to consider when choosing an accounting software

With many accounting programs with unique functionalities to choose from, picking the right one can be tough but a clear understanding of your business needs would guide you through. Here are key factors to help you make the right decision:

• Business size and type: tailor your choice to your structure (e.g., startup, retail or service-based, number of employees and stores, etc.)

• Budget: choose a solution that fits your financial capacity

• Scalability: pick software that can grow with your business

• Ease of Use: go for user-friendly tools that don’t require expert help

• Customer support: ensure timely and reliable assistance is available

• Deployment: cloud-based options offer better backup and access

• Features: look for essentials like invoicing, inventory management, customer and vendor management, automations, etc.

• Reports: choose software with insightful, and simplified reporting

• Accessibility: ensure you can access your data anytime, anywhere

• Security: confirm strong data protection and encryption

6 accounting software recommendations for small businesses

Cantant

Cantant is an emerging option in the accounting software space designed to serve small businesses that want a simple, mobile-friendly, and budget-conscious solution. It offers core features like inventory management, invoicing, expense monitoring, supplier and customer management, and team permissions, all wrapped in an intuitive, easy-to-use interface.

Its mobile-first design allows users to handle finances on the go, which is particularly useful for entrepreneurs in retail or field-based businesses. While it currently offers fewer integration capabilities than more established platforms like QuickBooks or Zoho Books, its ease of use and affordability make it a compelling option for startups and microbusinesses just getting started.

Cantant is best for small and micro businesses of any type that need a highly affordable, easy-to-use, all-in-one accounting solution they can manage on the go.

Want to see how Cantant compares directly to your current tools? Book a walkthrough or explore the free trial today.

Quickbooks Online

QuickBooks Online (QBO) by Intuit is one of the most recognized accounting software solutions globally. It offers a robust suite of advanced features to manage everything from invoicing and expense tracking to payroll, tax preparation, and detailed financial reporting.

Higher-tier plans allow business owners to add up to 25 users and track sales from multiple sources, making it ideal for businesses with complex operations. It also supports a rich ecosystem of integrations, including payroll, inventory, and tax compliance tools.

However, QuickBooks can feel overly complex for non-accountants. Many small business owners may require professional help to manage it effectively, which can lead to additional costs.

Quickbooks is best for midsize businesses with over 10 employees, a flexible budget and more advanced accounting needs like payroll

Xero

Xero is a cloud-based accounting software that covers all the essential tools small and medium-sized businesses need to understand and manage their finances. Beyond the basics, it offers useful features like automated bank reconciliation, expense categorization, receipt scanning, and more.

Xero’s pricing is generally more affordable than QuickBooks, making it a cost-effective choice for growing businesses. However, access to some advanced features may come at an additional cost.

Xero is best for midsize businesses on a smaller budget with advanced accounting needs like payroll 

FreshBooks

FreshBooks is another accounting software with customizable plans tailored to different business types ranging from freelancers and solo entrepreneurs to large teams. Its core strengths lie in invoicing, project tracking, client management, time tracking, and billing.

However, FreshBooks offers limited inventory management features, making it less suitable for product-based businesses. It’s best suited for service-based professionals and contractors who need simple, streamlined tools to manage their finances and client work.

FreshBooks is best for freelancers, consultants, and service-based businesses looking for easy invoicing, time tracking, and project management in one place.

Wave

Wave is a simple, easy-to-use, and affordable accounting software built for freelancers, solopreneurs. It offers essential tools for invoicing, expense tracking, and reporting.

One of Wave’s standout features is its professional, customizable invoicing, along with optional add-ons that allow business owners to accept online payments and run payroll (available in select regions). While it lacks advanced features like inventory or project management, it’s an excellent starting point for those with basic accounting needs.

Wave is best for freelancers and solo entrepreneurs who need a simple, reliable accounting solution to send professional invoices and get paid fast.

Zoho Books

Zoho Books is a powerful and affordable accounting software that offers a wide range of features suitable for small to mid-sized businesses. It covers everything from invoicing and expense tracking to inventory management, banking, project tracking, and tax compliance, making it one of the most well-rounded tools on the market.

The best part of Zoho books is its ecosystem, integrating seamlessly with other Zoho tools like Zoho CRM and Zoho Inventory, giving business owners an all-in-one platform for managing both finances and operations. Its pricing is competitive, and its clean, user-friendly interface makes it accessible even to those with minimal accounting experience.

Best for: Small to mid-sized businesses looking for an all-in-one accounting solution with a robust ecosystem of integrations.

Conclusion

Choosing the right accounting software is one of the smartest decisions you can make for your small business. It’s not just about saving time, it’s about gaining clarity, control, and confidence in your financial decisions. Whether you're just starting out or looking to upgrade from manual spreadsheets, there’s a solution that fits your needs and budget. From all-in-one platforms like Cantant and Zoho Books to specialized tools like FreshBooks and Wave, the options are there to help you work smarter. 

Take the time to evaluate your business size, goals, and operations, then choose a tool that grows with you. With the right software in place, your financial foundation will be stronger, and your business better positioned for long-term success.

Want to see how Cantant compares directly to your current tools? Book a walkthrough or explore the free trial today.