a calculator and a computer with accounting software on screen

In this article, we’ll compare three different accounting software packages that cover the spectrum of small business needs—from the best option for basic small and micro-businesses to the mid-range package that can scale along with a growing business to one of the most robust, feature-packed options on the market. To level the playing field a bit, note that all three options are cloud-based, double-entry packages with mobile app support.

As you weigh your options, it’s helpful to know what you need from your accounting software so you’re not choosing something you’ll outgrow, or paying too much for features you’ll never use.

Intuit QuickBooks Online

QuickBooks (and QuickBooks Online, which we’ll be looking at specifically in this comparison) is one of the most robust options on the market. Its features and flexibility make it usable for enterprise organizations down to small, growing businesses—and likewise accounting beginners as well as experienced CPAs. The beauty is in its ability to scale with you without any growing pains.

You can start small with basic double-entry accounting functions, linked bank accounts, invoicing, expenses, payment processing, and tracking income, then scale up with advanced features like inventory and purchase orders. Note that with plenty of features comes a bit of complexity—it’s not unheard of to hire a QuickBooks pro to help you get up and running.

QuickBooks really excels in the dashboard and add-on departments. It’s able to sync all of your business’s finances into its dashboard for a complete view of your financial profile. From there you can generate 40+ financial reports that deliver valuable insights into your business. QuickBooks also provides access to plenty of third-party features you can integrate with for more functionality. Check out all its plans and their features here, which include:

  • Simple Start: $7/month
  • Essentials: $17/month, with all of Simple Start’s features plus multiple user access and time tracking.
  • Plus: $25/month, with all of Essentials’ features plus 1099 independent contractor preparation and tracking.
  • Advanced payroll options are add-ons for an additional cost

Go here for a more in-depth look at different plans and features.

Xero: Super Robust for Growing Businesses

Xero’s flexible plans (which you can move between when you need to) make it a great fit for anyone from freelancers to other small businesses to bigger businesses. Xero is all about the add-ons and user-friendly interface, like QuickBooks Online, which makes it an excellent flexible option for small businesses who want to start with some basic features then grow from there. It’s also got 24/7 live support, which is great for accounting beginners.

Xero is big on integrations—more than 600 of them, in fact. Check out the Xero app marketplace to see what’s available, with integrations like Stripe, Square and Paypal; ADP and other payroll services; e-commerce platforms like Shopify and BigCommerce, and more.

If your business uses Mac, Xero is a great option—it fully integrates, giving you a native desktop-like experience within the Mac interface. It’s also just as robust as QuickBooks Online, with payroll, financial reporting, invoicing, inventory, and a balance sheet module for double-entry accounting functionality.

Xero plans are generally tailored to the number of employees you’ll need payroll services for, except for the most basic Starter package which doesn’t include payroll.

  • Starter: $9/month, with 5 invoices, 5 bills, and a limited number of transaction reconciliations.
  • Standard: $30/month, with unlimited invoices and bills and payroll functionality for up to five employees.
  • Premium: $70/month, with payroll for up to 10 employees, which can be adjusted to accommodate more.


Wave is going to be the most basic option of the three insofar that it’s best-suited for less complex businesses with tight budgets—think freelancers, independent contractors, and businesses with fewer than ten employees. It’s also the only one of the three to offer a free version.

Wave may be basic, but out of all the freemium packages for basic accounting needs, it’s one of the most comprehensive. In that free version, you get unlimited access to accounting, invoicing, and receipt scanning. Most of the advanced features you’ll find in other options aren’t included but are pay-as-you-go. If you expect more complicated cash transactions or have a large inventory that’s tricky to organize, you might find you’re better off with QuickBooks or Xero.

Wave’s mobile app lets you scan receipts and invoice on the go and is available for iOS and Android. Also, check out how Zapier can integrate Wave with the other apps you use here.

Now, let’s do a side-by-side comparison of a few features—you’ll see they pretty much stack up on all fronts, with the exception of some features being built-in vs. add-ons.

QuickBooks Online Xero Wave
Best for Small to medium businesses (SMBs) SMBs (with payroll best suited for < 10 employees) Small businesses (1-9 employees), sole proprietors, freelancers
Linked bank accounts Yes (B of A, Chase, Wells Fargo) Yes (Capital One cards, Wells Fargo, Silicon Valley Bank, City National) Yes
Expense tracking Yes Yes Yes
Payment processing Yes ($) Add-on Yes ($)
Invoicing Yes Yes Yes
Balance sheet Yes Yes Yes
Profit/loss sheets Yes Yes Yes
Financial reporting Yes Yes Yes
Time tracking Yes Add-on 3rd party
Payroll Yes ($) Yes Yes ($)
Multiuser access with Essentials and Plus plans Yes Yes (Collaborators)
Tax preparation Yes Yes Yes
Inventory with Plus plan Yes No

Want to learn about some other small business accounting options? Check out our comparison article here.