The Top 5 Accounting Software for Startups: Keep Your Brand on Track in 2025

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What makes it better for startups than other desktop software is that it is affordable but doesn’t compromise in features. For example, it can effectively separate inventory costs into the COGS and the cost of inventory on hand—something that other low-cost desktop solutions don’t offer. Xero offers three subscription options, and all include unlimited users and a fixed asset manager. I’ve been keeping an eye on some interesting trends in accounting software for startups, and I think they say a lot about where things are headed.

A newcomer to the space, Campfire is finance and accounting software designed specifically for startups, offering intuitive tools to manage finances without the need for advanced accounting knowledge. With its focus on simplicity and collaboration, it’s perfect for small teams working in dynamic environments. Accounting software tools have become standard practice for most startups and businesses of all sizes, but there are a couple of alternative options as well. At the DIY end of the spectrum, there are those who swear by Excel and manually track their finances in spreadsheets.

QuickBooks is a good choice for freelancers and small businesses that need a simple way to track expenses, organize receipts and log mileage. It’s a safe bet that you didn’t launch a startup so you could spend more time invoicing. You can create a recurring profile in a few clicks and FreshBooks will automatically send the invoices for you, freeing up time for more important and fulfilling tasks. Choosing the right accounting software for your startup comes down to knowing your business’s unique needs, how much you can spend, and how it will factor into your current workflow. Here’s a breakdown of what to consider when selecting the right software for your startup. We like Wave Accounting because it’s free while letting you track your income and expenses and lets you do other very basic finance functions.

• QuickBooks Online, for instance, is a popular choice among accountants, simplifying the transition to professional accounting support, especially in the early stages of your business.
• Taxes are such an unloved part of being a good citizen that few founders think of turning the process into a game.
• In that case, check if it offers APIs or third-party connectors like Zapier, which can help bridge the gap.
• Introducing automation to your accounting workflows comes with many important advantages.
• This book offers practical advice on setting up your home office, marketing your services, and managing client relationships.
• These systems may offer accounts payable and accounts receivable aging, expense trend, profit margin analysis, and comparative reports.

Must-have accounting software features

Whether you want to do all the input yourself or leave everything to the bookkeeper, you’ll have no trouble finding a bookkeeper. The right accounting software won’t just meet your current needs—it’ll make your team more efficient and support your startup’s growth journey. Ensure accounting software for startups the individual authorizing spending is not also processing payments or reconciling accounts.

QuickBooks Plans and Scalability

Open a dedicated bank account for your startup to track business income and expenses clearly. This separation is crucial for tax purposes and provides a clearer picture of your startup’s financial performance. If you see accounts receivable (AR) and accounts payable (AP), then you’re likely using accrual accounting. These accounts represent money owed to you and money you owe to others, respectively, and they don’t appear in cash-based accounting.

How to Start an Accounting Firm Plus Business Plan

After clicking the “hourly project” option, I was taken to a new project template and prompted to enter a client, total hours worked, a project name, a project end date and the service rendered. I could also invite team members to join the project and assign and invite a client with just a couple of clicks. I clicked “edit dashboard” and was given the means to deselect reports I didn’t want to appear on the dashboard. The Forbes Advisor Small Business team is committed to bringing you unbiased rankings and information with full editorial independence.

QuickBooks Online: Best Overall Accounting Software for Startups

QuickBooks Online is a widely used accounting software for businesses of various sizes. It is known for its comprehensive feature set and extensive integrations. Inkle is a modern accounting solution designed specifically for startups. Visit FinOptimal for more insights and guidance tailored to your entrepreneurial journey. Puzzle.io is another option worth considering, especially if streamlining your financial data management is a top priority. Opt for software with an intuitive interface that simplifies complex financial tasks.

Mercury’s integrated approach to banking and accounting offers several advantages for startups. The platform simplifies financial management by consolidating key tasks into a single dashboard. Features like automated bookkeeping and streamlined payment flows reduce manual work and free up time for founders to focus on other aspects of their business. The ability to integrate with established accounting software like QuickBooks and Xero is another plus, ensuring data consistency and simplifying reporting. This streamlined approach can be particularly beneficial for early-stage companies navigating the complexities of financial management.

It is a form of tracking transactions as they occur in real-time, even if payment hasn’t yet been executed. You don’t actually have to receive or pay the funds in order to include them in your financial statements. By following these steps, you can systematically evaluate your options and choose accounting software that not only meets your current needs but also supports your business as it grows and evolves. If your business is expanding rapidly or requires more robust features, NetSuite might be worth considering. This software is often chosen by mid-sized businesses and larger startups that need advanced capabilities, especially in terms of customization, reporting, and scalability. Accounting costs vary widely based on complexity and service levels required.

Brex’s power is amplified by its ability to connect effortlessly with the most popular financial tools and software. Native integrations with top accounting platforms like QuickBooks Online and Xero ensure real-time data syncing, eliminating the need for manual data transfer and reducing errors. The platform extends beyond just accounting, integrating with productivity tools like Slack for fast approval notifications for lightning-fast reviews. Brex’s API access allows for custom integrations with your existing tech stack, ensuring that Brex enhances your current workflows rather than disrupts them.

Embarking on your startup journey with the right accounting solution is more than just a practical necessity—it’s a strategic move that sets the stage for financial success. By choosing software tailored to your specific needs, you’re not only ensuring smooth day-to-day operations but also paving the way for sustainable growth and informed decision-making. Choosing between cash and accrual accounting depends on your business model and growth plans. Cash accounting is straightforward—recording income when received and expenses when paid—making it ideal for smaller businesses focused on cash flow management.

Its integration capabilities and affordability make it an attractive option for small teams. Beyond payments, CRMs, and banking, consider integrations with tax software, payroll systems, e-commerce platforms, and expense management tools. The more connected your financial ecosystem, the easier it is to maintain accurate records and streamline operations as you scale. Invoices are documents that list products and services businesses provide to their clients. The client has an obligation to pay the business for services rendered or goods sold. In short, invoices are an important part of how small businesses make money.

• Overall, Xero offers a basic interface for completing key accounting tasks.
• However, there are still good reasons to be familiar with your accounting software.
• Accrual accounting is often the preferred method for VC-backed startups because it provides a more accurate and transparent view of the company’s financial health.
• Taking the time to understand accounting fundamentals is the first defence against your business failing due to running out of cash.
• Comprehending accounting and bookke­eping requireme­nts is paramount before delving into software­ recommendations for startups.

Otherwise, a lack of integration with essential tools could be a red flag, leading to more manual work and data silos. When I’m choosing accounting software for my startup, there are a few key factors I always consider. I look for a user-friendly interface, cost-effectiveness, and the ability to integrate with other tools I’m using. Plus, I can’t overlook the importance of strong reporting features and security measures to protect my financial data.

It’s a strong fit for companies already embedded in the Microsoft ecosystem that want to centralize finance, forecasting, and reporting across departments and regions. NetSuite is a good option for enterprises that need a fully integrated financial management system with room to scale. It’s especially strong for companies operating across multiple locations or entities that want a centralized, real-time view of their financial performance. SAP S/4HANA is best for large, multinational enterprises that need advanced automation, compliance, and real-time financial and operational visibility. It’s particularly strong for regulated industries with deep reporting and audit requirements across multiple business units. Numeric provides superior value for mid-to-large businesses involved in complicated accounting processes who also require unmatched data accuracy and prioritize audit readiness.