If you’ve been in the small business game for a while, chances are you have experienced some of the joys that only accounting and bookkeeping can bring:

There’s that burgeoning sense of dread as you approach tax season; the hollow feeling in the pit of your stomach when you realize that some key paperwork is missing; or just the daily headache of cash drawer reconciliation.

Most small business owners will admit, the number-crunching side of the business is just not the fun side. But (and there’s always a but), we all know how vital it is to keep this side of your affairs in good working order.

Enter QuickBooks. Or should I say: enter the accounting software of your choice. There are, after all, a range of providers available, including Xero, Sage 50, Wave, and more. But the reality is that Quickbooks holds a pretty dominant position in the small business accounting software world – with over 85% market share by one count.

How have they reached this level of dominance? Well, they entered the space early and grew a huge user base – and they became a go-to convenience for accountants looking to make managing their small business clients that much easier. As a result, Quickbooks is now recommended by over 75% of the accountants in America. So, whether you’re looking to do your own books or work with a local accountant, the odds are that the good people at Intuit are going to get your business.

We love Quickbooks here at ShopKeep, and our point of sale system even allows you to integrate directly with their accounting software via our partnership with Retail Intel. But there are alternatives, and as small business owner, it’s important to consider all of your options before making a software decision.

We’ve made a quick rundown of some of the options. Let’s start with the main competitor, QuickBooks.

Quickbooks

Probably the most mature of the available software providers, Quickbooks has multiple offerings and a range of add-ons and integrations that can augment the core functionality of the system. Their product line can get a little confusing but they’ve recently streamlined what’s available, so you can really focus on one of three offerings:  QuickBooks Online ($12.95 per month), QuickBooks Pro 2014 ($249.95 per year), QuickBooks Premiere 2014 ($399.95 per year).

Depending on your level of access, QuickBooks delivers a nice all-in-one view of customer, vendor and employee information and allows you to track income, sales and expenses to balance your books. The Company Snapshot view lets you choose the at-a-glance reports that are most important to your business so you can keep tabs on your business’ financial health. The program also lets you pay bills, run-off checks, manage your employee payroll and the associated taxes, as well as create invoices and forms. There’s some built-in document management functionality also, which can come in handy if you’re drowning in a sea of paper. Simply invest in a scanner and this tool could be a big help.

The calendar view is also a nice way to keep track of your schedule and timeline your to-do lists. If you’re interested in running a wholesale business or would like a version of QuickBooks that’s more tailored to your business type, you might want to check out the top-of-the-line QuickBooks Premier suite.

One final note on QuickBooks.  The fact that this is so widely used and understood in the small business community means it is much easier to find advice on this platform – be it online, from other small business owners, or even expert accountants – than it is for other accounting software.

Xero

As if having a name that makes it sound a bit like a Warrior Princess isn’t enough, Xero is also perhaps the most ‘people-friendly’ accounting software out there. They pride themselves on being approachable and nice – which in practice means unlimited email support and avoiding industry jargon, so instead of ‘receivables’ and ‘payables’ you get ‘money in’ and ‘money out’, etc. This fresh approach, coupled with a modern, user-friendly design has seen them steal a march on the other QuickBooks competitors out there.

What’s more, in the same vein as ShopKeep they are a ‘cloud-first’ company, so you get free upgrades as they constantly improve the software, and you get access anywhere – from an unlimited number of users. Prices start at only $9 per month but if you’re running a real business you’ll quickly scale up to their more expensive packages Standard ($30) or Premium 10 ($70). Features include: online accounting, bank reconciliation (with direct synch with most major bank accounts), invoicing and bill payments, and expense reporting, but the real benefit of Xero comes with the intuitive design – it really does feel easier to get a hold of what you’re looking for.

FreshBooks

One of the earlier cloud-based accounting software solutions to try and take the QuickBooks crown, Freshbooks operates with much of the same value proposition as Xero, offering a non-intimidating solution that is ‘accounting made for you, the non-accountant’.

However, with more of an emphasis on sole proprietors and service providers rather than brick and mortar merchants, FreshBooks is more about sending invoices and tracking payments than it is about tracking a full business. To be fair, that kind of receivables and payables tracking is really 90% of the game for a service oriented business, but for anyone using a point of sale system and putting through a lot of on-site sales, the functionality of this software may be a little limiting.

If you’re a service business looking for an easy solution that lets you track billable hours and get the basics done quickly, this is definitely worth looking into. There are also a wide range of integrations available with many of your other small business tools, such as MailChimp, Salesforce.com, ExpenseCloud, etc.

You can get up and running on the platform for free but again, for serious small businesses serving a large number of clients, you’ll find yourself needing to quickly move to the premium services. These start at $19.95 per month.

Sage 50 Accounting Software

Sage is another one of the more fully-featured solutions on the market. It is probably one of Quickbook’s closest competitors. It is also, however, a desktop solution that doesn’t operate in the cloud, so for any small business owners who find themselves on the go a lot and who place a premium on mobile access, this might not be the right solution.

In a similar vein to QuickBooks, Sage 50 operates a tiered pricing model with three entry points: Sage 50 Pro ($269), Sage 50 Premium ($359), and Sage 50 Quantum ($2399). For a small business with only 1-5 individuals requiring access to the software, the Premium option should be more than sufficient, so don’t be too put off by the astronomical price tag on the Quantum offering.

The design of the service feels a lot less modern compared to Xero but the application is highly customizable, allowing you to create shortcuts for your most commonly performed tasks. For anyone familiar with ShopKeep, the intuitive breakout of inventory, customers, employees, reporting, etc. will also feel very familiar. Another potential plus in the Xero column here is the extra price you’ll have to pay for your payroll needs.

In many ways, Sage seems like it employs the old-fashioned approach to software – you can choose from a range of add-on services but these are all in-house. So you accept mobile payments with Sage, or use their email marketing service but most consumers now prefer to choose best-in-class software that integrates with their preferred provider in each niche. I’d rather work with the experts in each field so, a Xero and MailChimp, or a QuickBooks and ConstantContact, rather than settle for whatever happens to have been developed in-house by Sage.

AccountEdge

AccountEdge is accounting software for small businesses built exclusively for Mac. The company bills itself as a challenger brand that ‘spends less on advertising than our competitors do on stationery’. It has nonetheless put together a relatively complete suite of tools – basic accounting, inventory, payroll, banking, document management and payment processing. Again, it’s nice to not have to pay separately for payroll functionality. They also have a personal friendly approach to customer service, which goes a long way.

Also, for anyone familiar with ShopKeep, you’ll also appreciate that this is a dynamic and growing product, so new features are regularly added.

The range of integrations leaves something to be desired, which leaves them shy of some functionality that is fundamental for many small businesses. For example, there are no integrations for printing out FedEx or UPS labels.

Wave Accounting

A relative newcomer to the increasingly competitive world of small business accounting software, Wave is a mission-driven company, with a goal to create software that is genuinely designed for actual small businesses, i.e. those with less than 10 employees. And get this, they do it for FREE.

Now let’s not get carried away here – the company does have paid products that they hope to see their free customers upgrade to and the functionality is limited compared to some of the more established competitors, but what do you expect? It’s free. In general, I’d advise this for only very small businesses who are just starting out. The fact that you can’t access phone support at this free tier is a bad sign and a possible reason for you to move towards their full software solution.

The full solution offers invoicing, accounting, payments, payroll, and more, so it’s worth exploring. Again the company is constantly updating their software and releasing new functionality, so they are one to watch. There are however, only limited integrations available including: Stripe, PayPal, Etsy, amd Shoeboxed.At the end of the day, the right accounting software will greatly reduce the time and energy you spend tracking your numbers – and make you a smarter small business owner, so it’s worth investing some time finding the right solution.  We hope this primer helps you make the right decision for your business.

At the end of the day, the right accounting software will greatly reduce the time and energy you spend tracking your numbers – and make you a smarter small business owner, so it’s worth investing some time finding the right solution.  We hope this primer helps you make the right decision for your business.

About the Author

Paul Nugent is a small business advocate, and Head of Marketing at ShopKeep point of sale’s UK headquarters. Paul uses his background in the startup space, along with his POS system expertise, to allow small business owners to make informed decisions within their specific budgets.