7 Best Accounting Software for Startups

A startup is a company that is in the first stage of its operations to sell a product or provide a service. An entrepreneur who has an innovative business idea is responsible for the startup's formation and initial financial risk-taking.

Sure, it's pretty easy to run your company without an accounting system at first. All you have to do is keep track of your revenue and expenses on a sheet of paper or use a free or cheap online system like Excel or Wave.

But once your finances start getting complicated—and trust me, this happens faster than you'd think—you'll need startup business accounting software that's going to help you keep your books properly and prepare accurate financial statements.

In your search for the best startup business accounting software, you will definitely find different products. However, the best startup accounting software depends on your needs. Here are the top seven to consider (in no particular order):

QuickBooks offers four accounting software versions: Simple Start (USD 10 per month), Essentials (USD 17 per month), Plus (USD 27 per month), and Self-Employed (USD 10 per month). 

QuickBooks Online has two options according to their use: for self-employed users and for small businesses. 

Self-Employed is a separate set made for businesses that report their personal and business expenses from a single personal or business bank account. This allows them to view their business income and expenses by simply syncing their bank account, so they can take a serious look at their business.

When a user upgrades to QuickBooks small business software, it is easy to keep business and personal finances separate. 

Self-Employed does not include the feature that allows you to choose and connect your form of business and does not include last year's data reconstruction function. This version also does not include many of the transaction data functions, such as categorization by clicking.

Other QuickBooks plans are for small businesses looking for an accounting tool that connects to a variety of bookkeeping services. Each plan offers an ascending number of developed functions. As of now, QuickBooks has 2.5 million subscribers in total.

Only 5% of those are using the Enterprise plan. Also, 10% of them are using Self-Employed.

For many years, QuickBooks was the best accounting software for startups and small businesses with few staff and no particular industry. It's easy to use, and the task of accounting isn't renowned for its joys.

It's the over-functioning of QuickBooks that makes it stand out. However, it is not for everyone. QuickBooks has had serious competition in the past couple of years with the launch of Xero in both the USA and the UK, as we will explore a bit later. 

But more and more businesses are choosing the QuickBooks online platform rather than buying and installing it on their desktops.

QuickBooks is a system that keeps the basic principles of accounting practice but makes it much quicker and easier to use. You can fill out checks to send and print immediately, fill out quick invoices, and send them.

QuickBooks' paid online invoicing facility is all included. As well as simple tasks, QuickBooks can also support a budget, monitor stock, generate balance sheets with backups of loans, and predefined reports with the company submitted to loan the bank.

It is also possible to use QuickBooks on your iPad and iPhone, as well as on your Android devices. Saying that, with Xero, you can also reconcile your company bank account online worldwide.

NetSuite is an alterable and highly scalable application that serves as a full-service, cloud-based ERP system. The ability of NetSuite to amalgamate financial, marketing, and sales transactions renders it supremely desirable to both medium- and large-scale companies.

The abilities of the system embrace global service efforts, multi-site planning, and automation of financial accounts. Entrepreneurial resolutions provide forward-thinking planning, help improve the quality of records, and permit the fulfillment of prudent accounting allowances.

The user interface is neatly projected, customizable, and simple to explore. NetSuite can help clients of any size or domain enjoy superior transparency, examination, and influence over company data.

There are three pricing performance levels, aimed at, respectively, small firms (up to 100 employees), medium companies (100–500 employees), and large businesses (over 500 staff).

Once selected, the given price plan includes unique partnerships and a comprehensive set of related features. Pricing commences with the implementation of an initial payment, which is proportional to the chosen package, and a regular use fee (based on a price level).

Small enterprises are, on average, prepared to part with up to $1000 in just a few days. Given their customizable model, their advantages and scope of resource allocation are important features to explore.

A response is state-linked, including tax, NPO, or professional service aid. In addition to Solak, one of the key borders is the range of external solutions, such as EzyFlows, Inventory Valuation, and Planet E-commerce, made available by NetSuite.

FreshBooks is an online accounting software package that serves small businesses. It keeps things simple by accounting for only three core responsibilities: getting paid, tracking time, and working with your accountant. 

FreshBooks aims to make you look professional when sending invoices to clients or when you follow up on outstanding invoices. It has a simple, user-friendly template to put on your company's letterhead and a hosted payment portal.

FreshBooks has the only TBA comparison test that will accommodate international customers. All paid global subscription plans can handle multiple languages by allowing each customer to choose a preferred language for things such as invoices and emails.

With regards to currency, you can select one of many popular ones (e.g., U.S. dollar, Euro, Pound sterling, etc.) to charge clients. However, if your home currency is not represented, FreshBooks claims you can charge clients using the "multi-currency" feature.

Non-paying users also have invoicing capabilities, but they cannot customize the template or remove the "sent by FreshBooks" credit. There is a FreshBooks Classic app available for app stores, but we focused on the web-based system.

Wave is a cloud-based, integrated set of small business tools. It is one of the few full-service cloud-based accounting services that is free. Wave is ad-supported.

Like the other services described so far, Wave cannot handle complicated larger businesses, but it is great for startups, freelancers, and very small businesses. 

Wave has many features found in much more expensive accounting services, including a general ledger, accounts payable, accounts receivable, banking, and financial reports such as income statements and balance sheets.

It also has built-in customer management features, including customer invoicing and payment. Its tax preparation tool is not as effective as the others because Wave is not configured as a tax portal.

To get started, you have to go to Wave and its accounting setup, suggest ways to optimize its functionality, and connect it to your bank accounts.

Specialty setup can be done through third-party integration, including customer card payments (and payroll), but it ultimately may require more redundancy as the company grows, causing a problem for larger businesses.

When it comes to invoicing, Wave offers a lot of flexibility. It allows users to install consistent templates and customer profiles to automate the process.

It currently schedules invoices monthly or until a specified date, but automatic payment has not yet been implemented. Therefore, this does not work well for larger customers, customers, or gatekeepers.

Xero is easy to get to grips with if you've used other accounting software, and we think it's an ideal introductory product for small businesses, particularly those that are new to accounting.

The software is designed to save you time, and it makes administration and paperwork quick and simple. We think that Xero offers an unbeatable way to keep track of your finances.

It's great for anyone who wants an easy life when it comes to accounting, and the cloud interface means you can deal with things right away, sorting out invoices and expenses and enjoying up-to-the-minute reports on how your business is doing.

Xero is approved by the Australian Taxation Office to record sales and purchases, manage GST, and prepare activity statements, as well as being an income tax and GST printable form partner.

Xero has many time-saving features like bank reconciliation, electronic GST, financial reporting, compliance, an invoicing system that is slick, and much more, which helps small businesses have up-to-date financial information.

Xero is easy to set up, with no installation, and it can be started right away, so you can be up and running in no time.

One of the most popular accounting solutions is Zoho Books. Due to its popularity, accounting software is listed in our analysis. This solution automates important business processes and helps with complex tax reporting and other accounting procedures.

Zoho Books is a solution that has automated the creation of professional invoices according to your corporate style with no special technical knowledge, as well as the management of suppliers, purchase orders, and expenses. 

Automation balances and tracks income and expenses in real time at the bottom line. With Zoho Books, it's simple and fast. The integration of your information into Zoho Books is automated.

You can submit on a schedule for a backup, and your transactions and tax codes will be classified automatically. The data from your transactions will already be in fields in Zoho Books for authorization.

Your application will be connected to all of your sales channels, such as e-commerce websites, POS, and a financial institution. You're all set. In addition to the highest security protocols, the Zoho Books atmosphere is protected.

Here are some things to keep in mind before purchasing accounting software for startups:

The seven accounting software for startups listed above promise different advantages and have a variety of features to suit the unique needs of various startups. However, there is no one-size-fits-all software for startups.

To decide which startup business accounting software is best for you, it is important to keep in mind some of the key factors that you should consider before making a choice.

Firstly, it is important to look at your budget and not only at what you can afford now but also what the costs for each software may be as the business grows.

Furthermore, startups should also look at the available integrations, its requirements, and the price of the software before setting up. Most of the startup business accounting software listed here offers a demo, so make sure that you use it to familiarize yourself with how the software works before making your decision.