Key Takeaways
- QuickBooks Online: Most CPA-compatible. Best for businesses that work with accountants.
- Xero: Modern interface, strong for inventory and multi-currency operations.
- Wave: Free for basic needs, but limited scalability.
- FreshBooks: Best for freelancers and service businesses that invoice heavily.
- Growthy: AI-powered categorization. Strong for businesses with high transaction volume.
- Your choice should prioritize CPA compatibility. Software your accountant can’t access costs you money.
The software choice matters less than you think. What matters: Will you actually use it? Can your CPA access it?
Business owners spend hours researching the “best” bookkeeping software when the real question is simpler: Which one fits your situation?
This guide provides an honest assessment from CPAs who work with all of them. We see what happens when software choice goes right and when it creates problems. The goal is to help you pick something that works, not chase features you’ll never use.
Table of Contents
What to Look for in Bookkeeping Software
Before comparing specific products, understand what features actually matter.
Bank Feed Connections
This is non-negotiable. Your software should connect directly to your bank accounts and automatically import transactions.
Manual data entry for every transaction is a recipe for falling behind. Bank feeds eliminate most of that work.
CPA/Accountant Access
If you work with an accountant, they need access to your books. Some software makes this easy. Some makes it painful.
Ask yourself: Can my CPA log in and see what they need? Or will I be exporting files and emailing spreadsheets?
The answer affects how much you pay for tax preparation.
Invoice and Payment Features
If you bill clients, you need invoicing. Good software lets you:
- Create and send professional invoices
- Track what’s outstanding
- Accept payments electronically
- Send automated reminders
Expense Tracking and Receipts
Beyond bank feeds, can you:
- Attach receipts to transactions?
- Capture receipts via mobile app?
- Track mileage (if applicable)?
- Categorize with rules?
Financial Reporting
At minimum, you need:
- Profit & Loss statement
- Balance Sheet
- Accounts Receivable aging
- Accounts Payable aging
Better software adds cash flow statements, custom reports, and budget vs. actual comparisons.
Mobile App Functionality
Can you check your numbers, send an invoice, or capture a receipt from your phone? For many business owners, mobile access isn’t optional.
Integration Ecosystem
Does it connect to your other tools? Payment processors, payroll providers, e-commerce platforms, CRM systems. The more integrations, the less manual work.
Price vs. Feature Balance
Don’t pay for features you won’t use. A $235/month plan with advanced inventory doesn’t make sense for a service business.
QuickBooks Online
QuickBooks Online dominates small business accounting. Over 80% of small businesses use some version of QuickBooks, which means most CPAs are trained on it.
Overview
- Market position: Industry leader by far
- Owner: Intuit (also owns TurboTax)
- Ecosystem: Payroll, payments, time tracking, and tax all integrate natively
Pricing (2026)
| Plan | Monthly Cost | Key Features |
|---|---|---|
| Simple Start | $35 | 1 user, basic reports, invoicing |
| Essentials | $65 | 3 users, bill management, time tracking |
| Plus | $99 | 5 users, inventory, project profitability |
| Advanced | $235 | 25 users, custom roles, dedicated support |
Note: Intuit frequently runs promotions. Check current pricing.
Strengths
Universal CPA compatibility: Your accountant almost certainly knows QuickBooks. No learning curve, no file exports, no translation issues. This alone makes QuickBooks worth considering.
Extensive integration ecosystem: Hundreds of apps connect to QuickBooks. Payment processors, e-commerce platforms, payroll providers, CRM systems. Whatever you use probably integrates.
Strong payroll integration: QuickBooks Payroll works seamlessly with QuickBooks Online. Employee data syncs automatically. This matters if you have employees.
Solid reporting: Standard financial reports plus customization options. Most business owners get what they need without workarounds.
Large support community: Problems? Someone has already solved them. Forums, YouTube tutorials, and thousands of QuickBooks ProAdvisors are available.
Weaknesses
Price increases annually: Intuit raises prices regularly. The $35/month plan was $25 two years ago. Budget for increases.
Interface can be cluttered: Years of feature additions have made the interface busier than it needs to be. New users find it overwhelming.
Customer support varies: Support quality depends on who you get. Some experiences are excellent. Some are frustrating.
Feature creep: QuickBooks keeps adding features that most small businesses don’t need, making the product more complex.
Best For
- Any business working with a CPA
- Businesses needing payroll integration
- Companies wanting extensive third-party integrations
- Anyone who values “nobody got fired for choosing QuickBooks” safety
Xero
Xero is QuickBooks’ main competitor, especially popular in Australia, UK, and New Zealand. It’s gained US market share by being the “modern alternative.”
Overview
- Market position: Strong #2, growing in the US
- Origin: New Zealand-based
- Positioning: Modern design, international strength
Pricing (2026)
| Plan | Monthly Cost | Key Features |
|---|---|---|
| Early | $15 | 20 invoices, 5 bills, bank connections |
| Growing | $42 | Unlimited invoices/bills, bulk reconciliation |
| Established | $78 | Multi-currency, expenses, project tracking |
Strengths
Clean, modern interface: Xero looks better than QuickBooks. The design is cleaner, navigation is more intuitive, and new users learn faster.
Strong multi-currency support: If you do international business, Xero handles multiple currencies well. Better than QuickBooks in this area.
Good inventory features: Xero’s inventory tracking works well for product businesses. Not as deep as specialized inventory software, but solid.
Unlimited users on all plans: Unlike QuickBooks’ user limits, Xero lets you add unlimited users even on the lowest plan.
Strong API for integrations: Developers like building for Xero. The integration quality tends to be high.
Weaknesses
Fewer CPAs trained on Xero: While growing, Xero still has minority market share in the US. Your CPA might charge more to work with it or need training time.
US market support not as robust: Xero’s support is good, but US-specific features sometimes lag behind QuickBooks.
Payroll is add-on cost: Unlike QuickBooks’ integrated payroll, Xero payroll is a separate product with separate fees.
Fewer integration options: While growing, the integration ecosystem is smaller than QuickBooks’.
Best For
- Tech-savvy business owners who value modern design
- International operations with multi-currency needs
- Businesses with inventory
- Multi-location operations
- Owners who find QuickBooks overwhelming
Wave
Wave takes a different approach: the accounting software is free. They make money from optional payment processing and payroll.
Overview
- Market position: Leading free option
- Owner: H&R Block (acquired 2019)
- Model: Free accounting, paid payments/payroll
Pricing (2026)
| Product | Cost |
|---|---|
| Accounting | Free |
| Payments | 2.9% + $0.60 per transaction |
| Payroll | $40/month + $6/employee |
Strengths
Completely free accounting: No catches. The core accounting features cost nothing. For businesses watching every dollar, this matters.
Simple and easy to learn: Wave doesn’t try to do everything. The interface is clean, features are basic, and new users get productive quickly.
Good for very small businesses: If you have simple needs, Wave covers them without overwhelming you with features you won’t use.
Receipt scanning included: Wave offers receipt capture in the free tier. Most competitors charge extra for this.
Weaknesses
Limited CPA access options: Wave’s accountant access is more limited than QuickBooks or Xero. This can create friction with your CPA.
Basic reporting only: Standard financial statements are fine. Custom reports, budget comparisons, and advanced analysis are limited.
No inventory management: If you sell physical products and need to track inventory, Wave isn’t the answer.
Limited integrations: The ecosystem is much smaller than QuickBooks or Xero.
Customer support is minimal: Free product means limited support. Complex problems may not get resolved.
Best For
- Very small businesses (under $100,000 revenue)
- Freelancers just starting out
- Side businesses testing viability
- Budget-conscious owners with simple needs
FreshBooks
FreshBooks started as invoicing software and expanded into full bookkeeping. It’s still strongest for businesses that bill by invoice or hour.
Overview
- Market position: Strong in service/freelance segment
- Origin: Toronto-based
- Positioning: Invoicing-first, designed for service businesses
Pricing (2026)
| Plan | Monthly Cost | Key Features |
|---|---|---|
| Lite | $19 | 5 clients, unlimited invoices |
| Plus | $33 | 50 clients, proposals, recurring billing |
| Premium | $60 | 500 clients, project profitability |
| Select | Custom | Unlimited, dedicated support |
Strengths
Excellent invoice features: If invoicing is a major part of your business, FreshBooks does it better than anyone. Beautiful invoices, easy customization, automatic reminders.
Time tracking built-in: Bill by the hour? FreshBooks tracks time and converts it to invoices automatically.
Client portal: Clients can view invoices, make payments, and communicate through a branded portal.
Strong mobile app: The FreshBooks mobile experience is consistently rated among the best.
Good for client-facing businesses: If your business is about serving clients and billing them, FreshBooks is designed for exactly that.
Weaknesses
Limited for product businesses: Inventory features are basic. If you sell products, look elsewhere.
Fewer CPA integrations: While accountant access exists, it’s not as smooth as QuickBooks.
Not ideal for complex accounting: FreshBooks prioritizes simplicity. If you need advanced accounting features, it may not scale.
Pricing per client can add up: The client-based tiers mean growing businesses hit plan limits.
Best For
- Freelancers and consultants
- Service-based businesses
- Businesses that invoice heavily
- Time-billing professionals (lawyers, consultants, designers)
- Anyone who prioritizes invoicing over accounting depth
Growthy
Growthy takes a different approach: AI-powered categorization that learns your patterns and reduces manual work.
Overview
- Market position: Newer entrant focused on efficiency
- Core feature: AI learns your transaction patterns
- Positioning: “Bookkeeping that gets faster over time”
Pricing (2026)
Contact for pricing. Includes AI categorization capabilities.
Strengths
AI learns your categorization patterns: The first time you categorize “STRIPE PAYMENTS,” Growthy might not know what it is. The hundredth time? It handles it automatically. The software gets smarter as you use it.
Reduces manual data entry: High-volume businesses spend hours categorizing transactions. Growthy’s AI handles recurring patterns, leaving you to deal with exceptions only.
High accuracy on recurring transactions: For transactions that happen regularly (subscriptions, regular vendors), accuracy is very high.
Built for scale: If you have 500+ transactions monthly, the time savings compound significantly.
CPA-friendly exports: While newer to the market, Growthy provides the exports CPAs need for tax preparation.
Weaknesses
Newer to market: Less track record than established players. Some business owners prefer proven products.
Smaller integration ecosystem: The integration library is growing but doesn’t match QuickBooks’ yet.
Less name recognition: Your CPA may not know Growthy yet, which could require explanation.
Fewer CPAs familiar with it: Training time may be needed for accountants who haven’t used it.
Best For
- High transaction volume businesses (500+ monthly)
- E-commerce with complex deposits (Stripe, PayPal, Shopify)
- Businesses tired of manual categorization
- Tech-forward companies that appreciate AI efficiency
- Owners who want their software to improve over time
Comparison Table
| Feature | QuickBooks | Xero | Wave | FreshBooks | Growthy |
|---|---|---|---|---|---|
| Starting Price | $35/mo | $15/mo | Free | $19/mo | Contact |
| Bank Feeds | ✓ | ✓ | ✓ | ✓ | ✓ |
| CPA Access | Excellent | Good | Limited | Good | Good |
| Invoicing | ✓ | ✓ | ✓ | Excellent | ✓ |
| Payroll | Add-on | Add-on | Add-on | Add-on | — |
| Inventory | ✓ | ✓ | — | Limited | — |
| AI Categorization | Basic | Basic | — | — | Advanced |
| Mobile App | ✓ | ✓ | ✓ | ✓ | ✓ |
| Multi-Currency | ✓ | Excellent | Limited | ✓ | ✓ |
| Integration Ecosystem | Extensive | Growing | Limited | Moderate | Growing |
What SDO Uses (And Why)
We work with clients using every platform mentioned above. Here’s our honest take.
Primary Recommendation: QuickBooks Online
For most clients, we recommend QuickBooks Online.
Why: Universal CPA compatibility makes everything easier. When your accountant already knows the software, there’s no learning curve, no export hassles, no translation errors. This reduces your tax prep cost and speeds up the entire process.
QuickBooks isn’t perfect. The interface is busy. Prices keep rising. But the ecosystem benefits outweigh these frustrations for most businesses.
When We Suggest Xero
- International clients with multi-currency needs
- Inventory-heavy businesses that find Xero’s tracking sufficient
- Tech-savvy clients who value modern design
- Clients who tried QuickBooks and found it overwhelming
When Wave Works
- Very small clients with simple needs
- Clients with severe budget constraints
- Side businesses testing whether they’ll continue
Growthy Consideration
- High-volume clients who spend significant time on categorization
- E-commerce clients with complex payment processor deposits
- Clients who want their bookkeeping to require less manual work over time
The Bottom Line
We tell clients: “The best software is the one you’ll actually use. Don’t overthink it.”
A business owner using Wave consistently is in better shape than one with unused QuickBooks subscription. Pick something that fits your situation, learn it well, and use it regularly.
Switching Software: Is It Worth It?
Sometimes clients ask about switching from one platform to another. Here’s when it makes sense and when it doesn’t.
When to Switch
Current software doesn’t scale with growth: You’ve outgrown Wave’s limitations. You need inventory features. Your transaction volume overwhelms your current system.
CPA can’t access your system: If your accountant can’t easily work with your data, you’re paying for workarounds every year.
Features you need don’t exist: Your business has specific requirements that your current software can’t handle.
Price is unreasonable for what you get: If you’re paying for features you don’t use, a cheaper option might make sense.
When to Stay
Everything works fine: “Works fine” is underrated. Switching for marginal improvements isn’t worth the disruption.
Minor complaints only: Every software has annoyances. Minor frustrations don’t justify switching costs.
Less than a year on current system: You haven’t learned it well enough yet. Give it time.
Cost of Switching
Switching bookkeeping software isn’t free.
CPA time: Data migration, historical record setup, and verification take professional hours. Budget $500-$2,000 depending on complexity.
Learning curve: You’ll be less efficient for 2-3 months while learning the new system.
Historical data gaps: Migrated data is never as clean as native data. You may lose report comparability.
Integration reconfiguration: Every connected tool needs to be reconnected.
Switch when the benefits clearly outweigh these costs. Otherwise, stick with what you have.
Frequently Asked Questions
What’s the best free bookkeeping software?
Wave is the best truly free option. The core accounting features cost nothing. You only pay if you use their payment processing or payroll services. For simple businesses with basic needs, Wave delivers real value at no cost.
Should I use QuickBooks or Xero?
QuickBooks if your CPA prefers it (most do) or you want maximum integration options. Xero if you do international business, prefer modern design, or need strong inventory features. Both work well. CPA preference often settles the question.
Can I switch bookkeeping software mid-year?
Yes, but January 1 is much easier. Mid-year switches require splitting data between systems, careful reconciliation of the transition period, and more CPA time at year-end. If possible, plan switches for the new year.
Do I need bookkeeping software if I have a bookkeeper?
Yes. Your bookkeeper needs software to work in. The question is who owns the subscription and data. Best practice: you own the subscription, give your bookkeeper access. This protects you if you change providers.
What bookkeeping software do CPAs prefer?
QuickBooks Online, by a significant margin. Most CPAs are trained on QuickBooks, have internal workflows built around it, and can work fastest in that environment. Using what your CPA prefers typically reduces your fees.
Next Steps
The best bookkeeping software is the one you’ll use consistently with the features you actually need.
For most small businesses working with accountants, QuickBooks Online is the safe choice. Universal compatibility matters.
For specific situations (international, heavy invoicing, extreme budget constraints, high transaction volume), other options make more sense.
If you’re unsure which software fits your situation, or if you’ve been meaning to set up bookkeeping software but keep putting it off, we can help. SDO CPA works with all major platforms. We’ll help you choose based on your specific needs and set it up correctly from the start.
Because clean books start with the right foundation. Learn more about our bookkeeping services.