Accounting software can be a blessing or a curse, and it all depends on choosing the right program for your needs.
As a small business owner, freelancer, or entrepreneur, your most precious resources are time and money. In fact, spending time managing money is probably something you do a lot. There are always invoices to be sent, bills to be paid, time to be tracked, and reconciliation to be done.
The days of relying on Excel spreadsheets, invoices in Word, and notes for recording time are, thankfully, becoming a thing of the past. Online accounting software is on the rise, making it much faster and easier to track and manage everything to do with your money.
Four of the most popular online accounting apps are FreshBooks, QuickBooks, Xero, and Zipbooks.
These accounting packages feature integrations with other apps, including payment gateways and providers. We’ll briefly explore the main features of accounting software before focusing on the big four and how they take payment, process money, integrate with payment gateways, and how much client payments will cost you.
- Common Features of Accounting Software
- Project Management Features
- Why use an accounting app?
- Comparing Accounting Programs
- Integrating Payments
- Fees for Taking Payments
- Mobile Payments and Management
- Try Accounting Software Before You Buy
Common Features of Accounting Software
FreshBooks, QuickBooks, ZipBooks, and Xero have payment/billing features and project management features as standard. For payment and billing, you can expect:
- Quotes and Estimates
Produce and send quotes and estimates for your customers. If they accept the quote, you can easily convert it into an invoice for payment.
Quickly and easily produce and send customized invoices to your clients. You can also track overdue and paid invoices. This is one of the areas where you’ll save most time using an online accounting app.
- Bills and Expenses
Record and capture all of your business expenses, including one-off and recurring bills and expenses.
- Time Tracking
Track the time you spend on various projects and tasks, including hourly rates. Easily add time to your invoices and bill people quickly.
- Reconciliation – Reconcile all of your invoicing, expenses, payments, and more with your bank account. This keeps everything in sync and will really help when it comes to managing your money and taxes.
Managing the money is only one side of your business management tasks, but robust accounting software can offer additional features.
Related Article: How to Send Electronic Invoices
Project Management Features
In addition to the financial aspects you’d expect from accounting software, the four companies mentioned offer project management capabilities, including:
- Contact Details
Capture the contact details for your clients; see what you invoiced to each client and when.
- Projects and Tasks
Create, manage, and track all of your projects and tasks and add in one-off and timed charges.
Get balance sheets and profit / loss reports to understand how your business is doing and prepare your tax return.
- Mobile Apps
Access your accounting software on-the-go, or even accept credit cards while you’re on the road. The only accounting app that doesn’t have a mobile app (yet) is ZipBooks.
Related Article: Beginner’s Guide to Profit and Loss Statements (P&Ls)
Why use an accounting app?
I use an accounting app extensively, and it’s been great for many reasons. It saves a huge amount of time. Invoicing, expenses and reconciliation used to take about 2 – 3 days a month. Now I can get everything done in half a day.
Plus, everything is in one place. I don’t need to look across multiple apps or documents to learn about billing, invoicing, or projects. It also consolidates all my reporting, so I know exactly how much money I’ve got going in and coming out at any point.
It also makes it easier to manage my business finances. I can make more informed decisions. It gives me confidence on how much I can take out of the business each month. I can stay on top of everything by chasing late invoices, following up on quotes, and managing my bills and expenses more easily.
Comparing Accounting Programs
We’ll go into detail below on how the accounting apps compare to each other, but here’s a quick side-by-side comparison.
Accounting Software Costs
A big part of which accounting package you choose may be how much it costs. Most of the apps have tiered pricing plans, depending on the features you want. I’ve excluded the cheapest plans as these limit clients and invoices.
Xero costs between $30 and $70 a month.
FreshBooks costs between $25 and $40 a month.
QuickBooks costs between $27 and $40 a month.
ZipBooks is free; they make their money on credit and debit card processing fees.
Many accounting apps integrate directly with certain payment providers and gateways. That doesn’t mean it’s the only way you can take payment, but integration makes it much easier for your clients to pay you. This is most often through providing a direct link on the invoice that customers can click on and pay.
FreshBooks Payment Integrations
FreshBooks offers its own payment processing through WePay. It also has built-in integrations with PayPal, Stripe, and Authorize.net. With FreshBooks, customers pay their invoice directly through FreshBooks using a debit or credit card. You can also get integrations with Braintree and more through their third-party apps.
ZipBooks Payment Integrations
ZipBooks integrates with WePay and Stripe, and functions much in the same way as other options. Your customers can pay with debit or credit card.
QuickBooks Payment Integrations
QuickBooks accepts credit and debit card payments from customers directly. It also integrates with the Shopify and BigCommerce ecommerce solutions, making it easier to take payment through an online shop. It offers integration with Stripe and Authorize.net through third-party apps.
Xero Payment Integrations
Xero integrates with PayPal, GoCardless, Stripe, Eway, and DPS Payment Express. It also integrates with many other payment providers through third-party apps.
You can still take payment by other means, but you’ll need to manually send out payment details and reconcile payments yourself.
Fees for Taking Payments
You will be charged a transaction fee by the payment processor. This varies according to the online accounting app you use. The four services detailed here charge the following rates and fees:
ZipBooks (through Stripe and WePay) will cost 2.9% of the total amount plus a 30 cent fee per transaction.
QuickBooks charges 3.4% of the total amount plus a 25 cent fee per transaction.
You can also pay $19.95 a month to reduce that to 3.2% plus 25 cents. That makes sense if you regularly invoice more than $10,000 a month. However, be aware that QuickBooks has a history of expensive or additional hidden charges.
FreshBooks charges 2.9% of the total amount plus a 30 cent fee per transaction for Visa and Mastercard.
It charges 3.5% of the total amount plus a 30 cent fee for AMEX.
Freshbooks offers discounts if you bill more than $10,000 a month.
Xero payment fees depend on the service you integrate with – PayPal or Stripe being the most popular.
Almost all of the available Xero third-party payment providers (including PayPal, Stripe, Braintree, and Authorize.net) charge 2.9% of the total transaction amount plus a 30 fee per transaction. Additional fees may apply.
Related Article: QuickBooks for Credit Card Processing = Very Expensive.
Mobile Payments and Management
FreshBooks, Xero, and QuickBooks have apps that allow you to track and manage your accounting and invoicing from anywhere. Additionally, with QuickBooks and FreshBooks, you can choose to utilize point of sale (POS) apps and card swipers so you can take in-person payment anywhere with a mobile device. QuickBooks offers the Intuit GoPayment solution, while FreshBooks offers FreshBooks mobile. This article GoPayment vs. FreshBooks Mobile goes over the differences between the two.
Xero supports POS via third party apps. ZipBooks currently doesn’t offer mobile POS options.
Try Accounting Software Before You Buy
Accounting software comparisons are a great start in your research, but the best way to decide if you’re purchasing the right solution is to try before you buy. All of the accounting programs discussed in this article offer free trials. If you’re interested in Xero and QuickBooks, why not try both? You’ll be able to narrow it down further once you’ve had an opportunity to dive in and use the software yourself.
I’m not exaggerating when I say a good accounting app can revolutionize how you do business. You can use the time you save to bill more hours, create new products and services, or simply manage your business better. Take the programs for a test drive and decide which one you like best. Check for features that you need, and see if the program is easy to use. You can even give customer service a call to get a feel for what you can expect support-wise if you need assistance.
What do you use for accounting at your small business? What are the pros and cons of the program? Let us (and other businesses!) know in the comments section.