Best Online Accounting Software in 2024

Online accounting tools provide anytime, anywhere access to users and are affordable, too. Hence, they are preferable to on-premise systems especially if your company has multiple office locations and remote employees. However, how do you do informed comparisons to select the best online accounting software platform for your company needs given the surfeit of tools out there? To assist you, we have prepared this buyer’s guide which gives you valuable tips on the main features and factors you should focus on while evaluating the different software platforms and vendors.

An ideal way to start your search for the best online accounting software application is to register for the free trial or demo offered by leading online accounting software providers. This will enable you to check out each system’s main features and gauge if they are what you are looking for. Visit the websites of the following recommended platforms to check the possibility of a free trial: Xero, Freshbooks, QuickBooks, Sage Intacct, and KashFlow. These products have been given high rankings in our online accounting software reviews that you can browse to get a good comparison. 

• Freelancers, single accountants, and sole proprietors can check out the possibility of using a free online accounting software system for their basic needs.
• Small, medium-sized, and large businesses can invest in a quality paid platform to access advanced features.
• Companies in specialty sectors such as medical practice, banking, real estate, nonprofits, and others can try out tools that provide specific features for their particular needs.

• Xero: Use Xero to manage your company’s bookkeeping, bank reconciliation, invoicing, and more. This platform is designed to meet the needs of small businesses in any industry. Xero is based in New Zealand and has become a popular accounting software product in the US, UK, European, and Australian markets. The product offers robust financial reporting tools that summarize the impact of all your accounting activities.
• Freshbooks: A cloud-based accounting software for small businesses. You can accept credit cards, manage expenses and receipts, track time, and send invoices easily. Freelancers will find it easy to use this product to manage their clients, time, and income. The vendor offers a handy 30-day free trial to help you check out the features before you decide to invest your money.
• QuickBooks: QuickBooks Online is designed to work on your PC, Mac, smartphone, and tablet. You don’t have to pay extra for mobile access to your subscription. Use the tool to organize all your accounting tasks in one place. Record your sales and get paid faster by sending invoices that accept debit and credit cards.
• Sage Intacct: Provides online accounting software to small and medium-sized companies. The platform offers real-time operational and financial insights and enables you to automate key processes. Plus, you get to use core accounting modules, such as order management, cash management, accounts payable, accounts receivable, and general ledger. The software also includes multi-entity consolidations, revenue management, project accounting, and time and expense management tools, as well as built-in dashboards and reporting functionality.
• KashFlow: One of the leading bookkeeping and accounting software solutions in the UK. The product is easy to use and makes it simple to manage your small business accounts. It is cloud-based which means you get 24/7 access from anywhere. The best part is the platform is jargon-free and can be easily used even by non-accountants to track expenses and balance books.

The following are the main types of online accounting tools:

• Invoicing
• Expense
• Personal
• Enterprise
• Small business
• Micro-business

According to the latest market count, there are over 190 technologies in the accounting niche. Among the leading solutions are from well-known names like Intuit, Sage, and Xero.

Intuit dominates the market with a 58.22% share. No surprise there, as three of its products occupy the top 10.

• Invoicing. Get faster payments by sending online invoices that have online payment options.  
• Payroll. Pay your employees, send them paystubs, and run reports easily.
• Bank connections. Link to your bank so that transactions flow automatically into the accounting software each day.
• Bank reconciliation. Keep track of money flow with simple bank reconciliation and daily updates.
• Data security. Top online accounting software vendors use industry-standard security measures to protect your sensitive business data.
• Manage expenses. Effortlessly manage, claim, and record receipts and expenses online.
• Reporting. Generate smart financial reports to track the financial health of your organization.
• Accept payments. Get paid faster by accepting payments from online services like Stripe and PayPal.

• Info security. Leading online accounting software vendors utilize the latest security measures to protect your confidential business data. You don’t have to worry about on-premise crash or losing your data to theft or emergencies. Many online systems allow you to download your data locally if you wish to.
• Lower costs. You don’t have to shell out a large upfront fee, but only need to pay a small monthly or annual fee to access online accounting software.
• Less dependence on IT department. You don’t have to worry about whether the software you download works properly on your company’s systems and devices. On top of that, the cloud vendor handles all routine maintenance, upgrades, and backups. This means small businesses can save money and time spent on IT infrastructure.
• Facilitates better interaction. Top online accounting software products offer enhanced capabilities, such as employee portals and online payments. Your company’s staff can utilize the online employee portal for better collaboration and communication. In addition, online payments help to save time by integrating with the general ledger and accounts payable and receivable to automatically update your enterprise’s books.

• Electronic payments. Your company can save time and money by electronically paying invoices and collecting receipts. Therefore, top vendors are focusing on including electronic payment features in their online accounting software applications to make things easier for users.
• Customization. One of the best features of SaaS solutions is that you only need to pay for what you use. Therefore, if you wish to use only core accounting features and not bells and whistles like forecasting or grant management, the software will not include them or bill you for them.
• Automation. Even small businesses are taking advantage of automation capabilities offered by online accounting solutions. This is understandable, as automation leads to less paperwork. Plus, businesses can save on physical space since they can store most documents in the cloud or in digital drives.

• Costs add up. Though you don’t need to pay a large upfront amount, the costs can add up over the years when you continue to pay the subscription fee for your online accounting service. Therefore, in the long run, you may end up paying more for online software compared to an on-premise system that needs updates only after a few years.
• Data confidentiality. You are not sure where the cloud vendor will store your sensitive data. Their servers could be in the US, UK, Asia, or anywhere. This means other entities and governments could well browse and review your business data. Therefore, find out all details about the data security measures adopted by the cloud vendor before entrusting your precious business information with them.
• Integrations. Interfacing with third-party solutions is now a crucial requirement for platforms. Online accounting software is no different–it needs to connect with different solutions to create accurate records of customer transactions. You also need to integrate with HR and payroll to ensure that you can account for every employee-related expense. Without such an essential capability, you will have to resort to manual data entry, which is time-consuming and prone to errors.

Online accounting software is a more economical solution to on-premise accounting solutions. Since businesses can opt to pay on a monthly basis, it is easier on the pocket. On that note, organizations can expect to shell out as little as $2 or as much as $40+ per month. That, of course, depends on the pricing tier users select, which can vary depending on the features you want to unlock.

Additionally, some vendors offer free versions of their platforms, albeit with limited capabilities. This is beneficial to startups and organizations with little money to spare for a feature-rich web-based accounting tool.

There are online accounting software that also serve as a platform where a business can work with an external accountant. In this case, users can upload their financial records, such as receipts, invoices, and estimates to the system. Then, the service assigns a dedicated accountant to work on them.

Such tools also have communication features, which allow proprietors to get in touch with their accountants. This way, they can reconcile transactions and clear any confusion regarding account entries quickly.