In the old days, choosing your accounting software was easy. You bought a copy of QuickBooks, installed it on your PC or Mac, and you were off and running.

Nowadays there are more choices than ever before, and most of them are cloud-based. To help you cut through the chaos, we decided to write a quick review of the three systems that are widely regarded as the leading options for small businesses right now: QuickBooks Online, Xero, and FreshBooks.

QuickBooks Online (QBO)

  • The online successor to QuickBooks, the #1 selling accounting software of all time.

  • Made by Intuit, the largest and best-known company in the industry (i.e. the Microsoft of accounting).

  • QBO comes in four different versions that are designed to offer small businesses an increasing range of features and capabilities: Simple Start, Essentials, Plus, and Advanced.

  • One of QBO’s biggest strengths is that it integrates seamlessly with Intuit’s other products — including payroll, payment/merchant services, and tax preparation software. For small businesses that want to keep all their accounting tools under one roof, this is a big advantage.

  • To learn more about QBO, click here: QuickBooks Online.

Xero

  • The underdog from New Zealand. Xero was started by a group of really smart Kiwis in 2007, entered the U.S. in 2011, and is now regarded as the leading “QuickBooks challenger” in the small business accounting market.

  • Although much smaller than Intuit, Xero is the company that pioneered many of the breakthroughs in modern cloud accounting — including bank feeds, auto-coding rules, and the single unified ledger. The company has received numerous awards over the years and has been called “the Apple of accounting.”

  • While QuickBooks is still the market leader by a huge margin, Xero is very popular with progressive accountants and is regarded by many as the most innovative company in the industry.

  • To learn more about Xero, click here: Xero.

FreshBooks

  • The upstart from Canada. FreshBooks was created by a designer in Toronto who wanted an easy way to create professional-looking invoices and bill his customers online, so he built it himself.

  • FreshBooks’ claim to fame is that it’s ridiculously easy to use — and it is. Although FreshBooks isn’t a full-strength accounting program like QBO or Xero and can’t handle things like accounts payable, inventory, and financial statements, it is hands-down the simplest software for creating great-looking invoices and letting customers pay you online.

  • FreshBooks also has built-in features that help people track time, manage projects, and create proposals and estimates. As a result, it’s a very popular choice with freelancers, creative firms, and small service-based businesses.

  • To learn more about FreshBooks, click here: FreshBooks.

Additional Resources

If you want to read more about the fascinating world of small business accounting software, here’s a nice review from FitSmallBusiness.