Best Cloud-Based Accounting Software for SMBs in 2024

In today’s fast-paced business world, Best Cloud-Based Accounting Software for SMBs are increasingly adopting cloud-based solutions to streamline operations, improve efficiency, and reduce overhead costs. Accounting is one of the core functions that greatly benefit from the cloud. Traditional accounting software that required costly installations and regular updates is being replaced by more flexible, accessible, and user-friendly cloud-based accounting platforms.

For SMBs, choosing the right cloud accounting software is crucial as it can impact financial management, tax filing, cash flow tracking, and even business growth. Here’s a breakdown of the best cloud-based accounting software tailored for SMBs in 2024.

QuickBooks Online Best Cloud-Based Accounting Software for SMBs

Best For: Overall functionality, scalability, and integrations

QuickBooks Online (QBO) is one of the most popular accounting software platforms for SMBs, thanks to its robust features and intuitive user interface. QBO offers everything a small business might need—from basic invoicing and expense tracking to more advanced features like payroll management, inventory tracking, and financial reporting.

Key Features:

Easy-to-use dashboard and mobile app for on-the-go access.
Comprehensive invoicing and payment management.
Integration with more than 650 apps, including payment systems, CRM software, and e-commerce platforms.
Advanced reporting tools, including customizable profit-and-loss statements and balance sheets.
Multiple user access and role-based permissions.

Pricing: QuickBooks Online offers several pricing tiers, with plans starting from $25/month for self-employed individuals to $180/month for larger businesses needing more advanced features.

Why It’s Great for SMBs: QuickBooks Online provides scalability, making it ideal for businesses looking to grow without switching to new software. It also offers seamless integration with a wide range of other tools and accounting apps.

Xero

Best For: Small businesses with international needs

Xero is another top contender in the cloud-based accounting space, known for its user-friendly interface and global reach. Xero is highly regarded for its international capabilities, offering multi-currency support and tax settings for different countries. It’s a great choice for SMBs that deal with international clients or have plans to expand abroad.

Key Features:

Automated bank feeds and reconciliation tools.
Strong invoicing, billing, and payroll capabilities.
Detailed reporting features, including a cash flow overview.
Excellent mobile app for managing finances on the go.
Multi-currency support and tax management for international businesses.
Extensive third-party integrations, including payment processors and CRM software.

Pricing: Xero offers three pricing tiers, with plans starting from $13/month for the Starter plan up to $70/month for the Premium plan that includes more advanced features and unlimited users.

Why It’s Great for SMBs: Xero’s global functionality makes it especially beneficial for SMBs with a wider reach. Its intuitive interface and scalable features also ensure it’s a great choice for growing businesses.

FreshBooks

Best For: Freelancers and service-based SMBs

FreshBooks is designed specifically with small businesses and freelancers in mind. It’s perfect for service-based businesses that need easy invoicing, time tracking, and simple financial management. The software’s focus on ease of use and customer support sets it apart, making it a great option for non-accountants.

Key Features:

Simple invoicing and expense tracking.
Time tracking feature for service-based businesses.
Client portal for easy communication and file sharing.
Automated payment reminders and late fee features.
Strong project management and collaboration tools.
Mobile app with full functionality for invoicing and managing expenses.

Pricing: FreshBooks has four pricing tiers, starting from $15/month for the Lite plan and going up to $50/month for the Premium plan with additional features like unlimited invoices and team members.

Why It’s Great for SMBs: FreshBooks offers a highly intuitive interface that requires little to no accounting knowledge, making it perfect for small service-based businesses and freelancers.

Wave Accounting

Best For: Free accounting for small businesses with basic needs

Wave Accounting is a standout option for SMBs on a tight budget. It offers many features for free, including invoicing, expense tracking, and basic accounting reports. For businesses that only need basic accounting features and are looking for a free solution, Wave is an excellent choice.

Key Features:

Free accounting software with invoicing, expense tracking, and reporting.
Easy-to-use interface for business owners with no accounting experience.
Integrates with a range of payment processors for online payments.
Receipt scanning tool for easy expense entry.
Payroll and accounting services available for an additional fee.

Pricing: The core accounting and invoicing features are completely free, while advanced features like payroll management and credit card processing incur additional fees.

Why It’s Great for SMBs: Wave is perfect for SMBs that are just starting out or don’t have complex accounting needs. The free version provides a solid foundation for financial management without the need for a hefty investment in software.

Zoho Books

Best For: Integration with other Zoho apps

Zoho Books is part of the broader Zoho suite of business software, making it a great choice for SMBs already using other Zoho applications. Zoho Books is highly customizable, offering advanced automation and reporting tools, along with an easy-to-use interface for managing business finances.

Key Features:

Full-fledged accounting tools, including invoicing, expense tracking, and reporting.
Automates workflows such as invoice generation and payment reminders.
Integrates seamlessly with Zoho’s other tools, such as CRM, inventory management, and project management software.
Strong tax management, including VAT/GST support.
Multi-currency and multi-language support.

Pricing: Zoho Books offers three pricing plans, starting from $15/month for the Basic plan and going up to $70/month for the Premium plan.

Why It’s Great for SMBs: Zoho Books works well for businesses looking for a comprehensive accounting solution that integrates with other business management tools. Its scalability and customizability make it suitable for a wide range of SMBs.

Sage Business Cloud Accounting

Best For: SMBs in need of scalability and advanced features

Sage Business Cloud Accounting is an excellent cloud-based accounting solution for SMBs that require robust features without the complexity of larger ERP systems. It provides the scalability needed by growing businesses while maintaining an easy-to-use interface.

Key Features:

Invoice and payment management tools.
VAT, GST, and sales tax reporting.
Project and job costing for tracking expenses and revenue.
Time-tracking and employee management features.
Mobile access and integration with banks for real-time updates.
Customizable dashboards for financial insights.

Pricing: Sage Business Cloud Accounting offers two plans: the Start plan at $10/month and the Standard plan at $25/month, which includes more advanced features.

Why It’s Great for SMBs: Sage provides flexibility and scalability with strong reporting tools and accounting features, making it suitable for SMBs that anticipate growth and require more advanced functionality.

Selecting the best cloud-based accounting software for your SMB depends on your specific needs, industry, and budget. If you’re looking for a robust, scalable solution with extensive integrations, QuickBooks Online or Xero might be your best bet. For freelancers and service-based businesses, FreshBooks provides easy-to-use tools, while Wave Accounting offers excellent free options for businesses with simpler requirements.

Ultimately, the right choice will help you streamline your accounting processes, reduce manual errors, and enable you to focus more on growing your business rather than managing finances. Each of the platforms mentioned here is designed to simplify accounting tasks, and by carefully considering your business’s unique needs, you can choose the one that best fits your requirements.

FAQs on Cloud-Based Accounting Software for SMBs

1. What is cloud-based accounting software?

Cloud-based accounting software is an online platform that allows businesses to manage their financial operations, such as invoicing, expenses, payroll, and reporting, via the internet. Unlike traditional desktop accounting software, cloud-based solutions store data on remote servers, offering businesses the flexibility to access their financial information from anywhere with an internet connection.

2. How does cloud-based accounting software benefit SMBs?

Cloud-based accounting software offers several advantages for small and medium-sized businesses (SMBs):

Cost-effective: Many cloud platforms offer subscription-based pricing with lower upfront costs.
Accessibility: You can access financial data from anywhere, anytime, which is ideal for businesses with remote teams.
Scalability: As your business grows, cloud accounting software can easily scale to accommodate your changing needs.
Automatic updates: Cloud software is updated automatically, ensuring your system is always running the latest version with new features and security improvements.

3. Can cloud-based accounting software integrate with other business tools?

Yes, most cloud-based accounting software platforms offer integrations with a wide range of other business tools, such as Customer Relationship Management (CRM) systems, inventory management software, and e-commerce platforms. Popular integrations include payment processors (e.g., PayPal, Stripe), point-of-sale (POS) systems, and time tracking apps. This helps streamline business processes and data flow between systems.

4. Is cloud-based accounting software secure?

Yes, cloud-based accounting software is generally very secure. Reputable providers use advanced encryption methods to protect your data and store it in secure data centers. Additionally, most platforms offer multi-factor authentication (MFA) and frequent backups to enhance security. However, it’s important to choose a trustworthy provider with strong security protocols and ensure your business practices, like using strong passwords, are also secure.

5. How do I choose the right cloud accounting software for my SMB?

When selecting cloud accounting software, consider the following factors:

Business needs: Determine if you need basic accounting features or more advanced tools like inventory management, payroll, or project tracking.
Ease of use: The software should be user-friendly, especially if you don’t have an accounting background.
Pricing: Compare subscription fees and check for any hidden costs (e.g., additional fees for multiple users).
Integrations: Ensure the software integrates with other tools your business already uses.
Scalability: Choose software that can grow with your business.