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Best accounting software for small businesses

Are you still handling your accounting manually? Thanks to the introduction of accounting software, you no longer need a pen, paper and calculator for your accounting. Accounting software can easily take care of long and complicated tasks, along with providing error-free results in a couple of seconds.

However, with hundreds of software available for small businesses in the market, it can be difficult to choose the one that suits your accounting needs the best. As a small business, you would not wish to spend money on a very expensive accounting tool.

So here in this guide, we have gathered some of the best accounting software, especially for small businesses in Australia. But before that, let us understand why you need accounting software.

Why do you need accounting software?

As a business owner, one of the most important tasks that demands daily attention from you is accounting. If you are doing this manually, it can be quite tiresome. This is where good accounting software can come to your rescue.

 accounting software for small businesses

From preparing invoices for customers to making detailed reports of taxes, accounting software can help a business to a great extent by doing it all. A huge number of people globally have benefited from such software.

With computerised accounting, prices have gone down. These software have become really easy to use, which makes it easier for people with little to no accounting knowledge to benefit from them.

The following are the benefits you can expect from accounting software:

Save your time

What else can be more important than ‘time’ for a business in its initial state? Time is equivalent to money when it comes to business, and optimising your accounting processes can significantly reduce your bookkeeping hours.

Using accounting software can simplify a lot of things for you and your business. As a result, you will end up saving a lot of time that can be invested in other sectors dedicated to the growth of the company.

It helps with taxes

Another benefit is that it lets you properly compile and export receipts and documents to your accountant without any hassle. Properly compiled records make it easier for your accountant when it comes to managing your taxes.

There are a lot of software that can also comply with tax office rules by formatting invoices automatically so you will not have to face troubles during tax season.

Business reports

You require your invoices, details of your stocks, history of business transactions or other parts of your total business report. It can be really tiring to sit down with papers to make the business report. An accounting system can get these reports ready for you.

Business reports

Cut costs

Here is another great benefit that compels a lot of people to shift towards using accounting software. Automating your accounting tasks will save you money in the long run.

Since you do not need to hire a bookkeeper or allot extra hours of your shift to handle all books, transactions and invoices, you will end up saving a huge amount of money. Moreover, the software offers subscription-based pricing models with low costs that you need to pay on a monthly basis or annually.

These subscriptions give you regular updates, tools and support that can assist you to focus on running your business.

Accuracy and speed

With the automation of data, you can enjoy a higher degree of accuracy and speed. Accounting software provides real-time data, which is helpful in streamlining business transactions.

Things you have to consider before choosing accounting software

With hundreds of accounting software flooding the market, it can be hard to choose the right software for small businesses. However, there are some things that you should consider before choosing the right software and package for your business.

First, you have to figure out the needs of your business through business evaluation. After that, pay attention to the following vital factors:


What makes one software better than another? Its features. So, the first thing that you should pay attention to is the type of features the software has to offer. You can reach out to an account that can help decide if the features of a certain software match your business needs or not.

Whether you need inventory management, payroll processing, or advanced reporting, ensure that the software can handle your demands.

Overall Value

When assessing accounting software, it’s essential to look beyond the price tag. After consideration of the features, you need to consider the overall value of the software based on the set of features and functionalities it has to offer.


You do not have the whole day to learn how the software works. Thus, you also need to consider how long it is going to take you to learn the software. Choosing user-friendly software is necessary to immediately implement the system.

User-friendly accounting software


As a business, your primary goal is growth, and your chosen software should be able to grow with you. Thus, you have to consider the scalability to make sure that the accounting software will grow with your increasing needs.

Scalability is vital to prevent the disruption and cost of switching to a new system as your requirements become more demanding.


To maximise the software’s functionality, look for a product that offers a strong marketplace of integrations. Such integrations can enhance the core capabilities of your accounting software.

Whether you need to connect with e-commerce platforms, CRM systems, or other business tools, having a wide range of integration options can help you tailor the software to your specific workflow.

What about Free accounting software?

If you have been searching for good accounting software, you must have come across a couple that claim to be free. But should you be using those free software?

Sadly, nothing in this world is free, so you must look for the reasons why you are being offered free accounting software in the first place.

Completely free software is somewhat okay for basic accounting tasks such as tracking sales, calculating sales tax and recording accounts receivable.

However, once your business starts evolving and growing or if you find yourself managing multiple businesses, you will require advanced features that free accounting software will not be able to provide.

Although you may believe that you will change the accounting software when the small business grows, you should not be too sure.

Free accounting software

One of the biggest threats to small businesses in Australia is operational debt. This refers to the accumulation of non-revenue-generating tasks that inevitably accumulate as your business grows.

Operational debt competes for your valuable time and attention among numerous other business priorities. Left unaddressed, it can suffocate your business, hampering its growth potential and causing operational chaos.

Investing in cloud-based software is one way to avoid being burdened by operational debt. So, choosing small business accounting software can help your business grow rapidly. Although it may add a monthly subscription, it will be worth it.

Best accounting software

Now, let us move on to some of the best accounting software for small businesses for you to choose from. Although some of these software packages are more suitable for specific businesses, these are quite general in nature and should be able to satisfy any small business owners.


MYOB is Australia’s one of the best accounting software for small businesses. It has been trusted by a lot of people for over ten years.

It provides convenient solutions for accounting tasks such as BAS reports, accounts payable, inventory and cash flow management.

Although MYOB originated in Australia, this IT company now belongs to an American private equity firm and, thus, is no longer listed on the ASX.

The following are included in MYOB’s product tiers:

  • Lite (It is best for sole traders, startups and individuals)
  • Pro (It is best for small to midsize businesses)
  • AccountRight Plus
  • AccountRight Premier
  • Payroll Only

MYOB Business Lite and Pro provide monthly payroll per employee. Both AccountRight plans already include unlimited payroll.


It easily supports multiple currencies, which makes it a great choice for companies that have international clients. MYOB is also cloud-based, and as a result, your team can access accounting data as soon as they connect to the internet.

Thanks to the several plans MYOB has to offer, it allows business owners to choose the features that can really enhance the business process. In this way, instead of paying for tools they do not need or advanced packages, the small business owners will pay for the needed services.

For instance, there is a payroll-only option offered by MYOB specifically for businesses that require a simple solution for paying their employees.

If you are only an employee or you are just starting up the cheapest plan, i.e., MYOB Business Lite can be an excellent option to start with online accounting software. You can easily upgrade your plan once your company starts growing. This will allow you to integrate more features as you need.

When it comes to software’s usability, it has a simple dashboard, which gives a quick overview of the necessary information, for instance, money in and out, transactions, invoices and bank accounts.

MYOB is a professional invoice management solution. It allows unlimited invoices and bills, which is the reason why it stands out among other software offering the same services. Thanks to its uncomplicated tier structure for payroll for small businesses, it lets you handle the payroll for unlimited employees without any additional payments.


Although MYOB is one of the very few accounting software companies that provide customer support via the phone, it is unable to offer a support experience that is as quick and hassle-free as other accounting software provider companies. So, if you wish to provide outstanding customer support, MYOB may not be the best option for you.

Other than this, another thing that bothers some people is the fact that this bookkeeping software is on the expensive side than other programs. Though it provides multiple tiers when compared to the plans of other accounting software, other options are cheaper on average.

However, a lot of people consider the higher price worthwhile due to the long-standing reputation of the company as a leading accounting software in Australia. So now it is up to you if you wish to go a little over the budget for the brand name or not.

The set process of MYOB is another con. If an accountant does not have extensive experience, implementing MYOB may be quite challenging. Setting up MYOB could be a lengthy process. In case you need to transfer data to it from another accounting system, be ready to sit in front of the screen for a while.


MYOB still remains an industry-leading business accounting software with many helpful features, such as expense tracking and tax management. MYOB’s advanced features can be challenging to learn, especially for those with no accounting training, but once you get the hang of it, there can’t be anything better than this.

MYOB is a good option for small and midsize businesses that have a turnover of less than $5 million.


If you are looking for accounting software other than MYOB that is widely recognised, look no further than Xero. It is an accounting tool from New Zealand that is internationally renowned.

Xero has all the needed features of good accounting software for small and midsize businesses, like:

  • Transaction management
  • Cash flow monitoring
  • Online payments
  • Automated bank feeds
  • Expense management
  • Integration with other tools
  • Inventory tracking
  • Payroll

And the list can go on.

Since Xero is an online accounting software, it is accessible on any device. It also allows you to assign tasks, manage jobs and track time with Practice Manager Tool and other features. Thanks to it being an affordable online accounting software and has seamless accounting features, it is a perfect choice for small business owners with growing brands.

It has the three cost tiers:

  1. Early: It is perfect for individuals, startups and sole traders.
  2. Growing: It is made for small or developing businesses
  3. Established: This one is specifically for bigger brands


One of the biggest advantages of this small business accounting software is its ease of use. Xero’s user-friendliness highlights this software among its competitors. Along with this, it has numerous tools with simple-to-understand pricing plans, which attracts a lot of small businesses looking for the right accounting solution at affordable prices.

The cloud-based accounting software lets you access your financial reports, business transactions and other important data from anywhere. Even without any accounting expertise, you can manage your finances and books with Xero.

Another reason to use Xero is the feature of excellent integration with customer relationship management software as well as secure payment gateways. All you have to do is select what you require from the multiple add-ons like project management, inventory management or payroll options.

Xero automates numerous basic accounting processes like invoice reminders, which is the reason why a lot of small businesses in Australia prefer it.


Xero has all the necessary features small and midsize businesses may require to stay on top of their finances. Yet, it fails to offer advanced customisation features.

When it comes to financial reporting, it offers summaries of critical financial data only. With issues in integrating banking and third-party tools, the initial configuration can be a bit challenging.

This software may be the right choice for businesses that are smaller in size and are looking for a simple financial management solution. Businesses that are larger in size and have more complicated structures may find this software lacking.

Another problem that a lot of users have complained about is the lack of responsiveness from Xero’s customer support. Suppose you faced some issues logging in. In this case, you may have to wait for days to hear from their support team.

So, you might not find this accounting software helpful when it comes to processing outstanding payments or any time-sensitive accounting tasks.


There is absolutely no doubt that Xero does the standard accounting work incredibly well. With Xero, you can easily handle invoices and bank transactions and extract the needed financial reports that can help you monitor profits and losses. Since it is online accounting software, you can do all of this from anywhere.

Although the business reports provided by it are well-organised and easy to read, they lack the depth for more thorough insights. So, before choosing this software to cater for your accounting needs, consider all the pros and cons of this software.


If you have been actively looking for good accounting software, you must have come across QuickBooks. It is known as one of the best accounting software for Australian tradies.

The major reason for its popularity is the ease of use without accounting knowledge.

This online platform can help small businesses extract financial reports and also manage their income and expenses, accounting, payroll and more. The type of accounting services will depend upon the price tier of the package you choose. The following are the three plans QuickBooks offers:

  1. Simple Start: for self-employed individuals and emerging businesses
  2. Essentials: for businesses with some suppliers
  3. Plus: businesses with suppliers that need inventory management and project management.


QuickBooks has a strong brand awareness along with a high potential for longevity.

It offers a good range of features and add-ons. For some of you, having so many options may get overwhelming. This platform offers informative video tutorials that can assist you with the setup process and speedy implementation.

Some of the best features of QuickBooks Include:

  • Integrations with third-party software
  • Inventory management
  • Automated accounts payable and receivable
  • Invoice tracking
  • Cash flow and expense management

Another benefit of using QuickBooks is the automatic categorisation of transactions using the rules created by you. Its AI sorting process picks up how to categorise your data with the passing of time based on how you initially organise the financial transactions.

As a result, you can not only save time but also boost productivity with the help of this feature. QuickBooks also provides you access to multiple invoice templates, and you can customise them accordingly with a logo, fonts, colours and so on.

You can easily trailer quotes, emails and estimates as per your brand. By doing this, all your business’s correspondence will look more professional.

Just like the previous two accounting software, this software can be used on almost all devices, and it offers mobile apps. So you can scan as well as upload receipts on the go. Along with this, QuickBooks integrates with a good range of third-party applications such as document management tools or payment software.


Even good software, like QuickBooks, has some limitations. Firstly, the cheapest plan doesn’t offer recurring invoices. As a result, a company that needs to charge its clients monthly will need to pay more for a place that includes the said feature. Besides this, the basic plan also does not include bill management, user management and multiple currency support.

With QuickBooks online, you can only manage one company since it allows one company per account. So, if you are looking for software that allows the management of multiple companies, you will need to reconsider it.

Suppose you wish to manage three companies with QuickBooks. You will require three separate licenses. With QuickBooks Online, integrations may be tricky. Sometimes, a third-party application might glitch, or bank feeds lose connection, which might lead to errors that will take time to fix.

There is no doubt that QuickBooks is convenient, but maintaining business transactions might be risky. The system lets you edit past entries, which is helpful when it comes to correcting errors, but it would be difficult for an accountant to track those changes later.

The major concern for so many businesses is the pricing of QuickBooks. It has three tiers, and the more add-ons you choose, the higher the price goes. So, for those needing more than just the basic accounting software, managing the costs might be a struggle.


QuickBooks is widely known as a reliable accounting software that can be used by small businesses to manage financial transactions, track invoices, monitor cash flow and more.

Since it is a cloud-based software, QuickBooks is extremely convenient to be used anywhere. Along with this, you also get intuitive user access through it for external accounting firms or even your CPA.

Its pricing is a little too high to be considered a budget-friendly option. The lack of depth in data may cause an issue for larger companies that deal with extensive data.

You can easily automate and speed up tasks such as data entry, inventory tracking, bank reconciliation, and cash management. However, you will have to cope with the lack of advanced accounting capabilities.


The next one in the line is FreshBooks, which is cloud-based accounting software used by Australian business owners to create professional-looking invoices, handle online payments and streamline expense tracking.

This software is extremely popular among freelancers who wish to simplify receiving client payments. One reason for this is the pricing. Its pricing depends upon how many billable clients you have.

With the Lite version, you get access to unlimited invoices to five billable clients (at most). Thus, small businesses that have more clients and also require advanced features will need to opt for any of the two plans:

  1. Plus – maximum 50 clients
  2. Premium – unlimited customers with the introduction of accounts payable, project tracking and user accounts.


Although with FreshBooks, you will not have the same features as an all-in-one cloud ERP suite, it is extremely helpful to small businesses that require an organised and intuitive accounting system.

This software is a great option for self-employed workers thanks to its ability to track time on projects or tasks and bill clients accordingly.

The user interface of FreshBooks is well-designed and clean. As a result, it offers a very pleasant user experience. It does not matter if you are using your smartphone or desktop. You can easily monitor your cash flow, manage finances or create invoices.

FreshBooks has been in use for designing personalised and on-brand invoices for clients. As a result, your brand will look extremely professional with very little effort. Besides this, Automated reminders, as well as seamless integration with payment gateways, bring great benefits such as saving your time and offering convenience to the customer.

FreshBooks is able to get consistently good feedback from users thanks to its responsiveness to their support team. Its straightforward user interface, paired with the amazing customer service for assistance, makes things extremely easy for you to manage your finances.


If you are looking for accounting software that provides detailed reports, you may have to consider software other than FreshBooks. It does not have features to provide in-depth insights into a business’s finances and operations. Finding comprehensive details on sales trends or cash flow is not possible.

Along with this, there is no inventory management system that can help you keep track of items. The integration options for third-party tools are also limited.

Since it is invoice-focused accounting software, its integration options are payment tools. This could be a problem for companies that are already using other programs and wish to connect to the accounting software.

Since this is basic accounting software, it offers fewer options when it comes to user customisation. You will also not be able to sync the banking transactions with this.

As the complexities of your businesses increase, these inconveniences increase as well. When it comes to project accounting, it is easier to track time for invoices. However, it does not offer other helpful features for analysis or tracking. Thus, small businesses that have long-term projects may find it inadequate for their needs.


FreshBooks is a software that keeps things simpler. So it could be the perfect solution if you are looking for basic accounting features like:

  • Customisable invoices
  • Automated payment reminders
  • Expense tracking
  • Time tracking
  • Standard reporting
  • recurring payments

If you are just starting your business or working with an outdated accounting process, FreshBooks is an easy and convenient option.

Key Takeaways

Outdated accounting practices can cost your business a lot in the long run. Instead, with so many great options available in the market, you need to streamline your operations.

We have mentioned some of the accounting software that we believe is good. However, you should keep in mind that there is no such software that suits every business. While a business might consider software as a saviour, the other may not have had the same experience. This is the reason why you have to consider the features of the software and if they are exactly what you need.

In case your accounting needs have become too much for you to handle on your own or you need professional advice on your tax matters, reach out to Clear Tax Accountants today.

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