Best Online Accounting Software For Small Business Canada

Starting a business is a huge amount of work. The hardest part is getting organized. There’s so much to do, and usually it feels like there aren’t enough hours in the day to get it all done. You’ve got to be on top of your game, and you need all the help you can get.

In today’s business world, there are many different software programs you can use to make your life easier as a small business owner. A lot of these are cloud-based, meaning you don’t have to have them installed on your computer or worry about updating them manually. You get access to them through web browsers.

You may think that accounting software is just for big businesses or even just accountants, but in fact, it’s incredibly helpful for any size company! You’ll want something that’s easy enough for your employees to use while still offering all the features they need like invoicing and expense tracking capabilities—and if it’s free? Well then we call that icing on top![End intro]

In this post, we’ll go over some of the best online accounting software options available today and how they’re used by small businesses across Canada. We’ll also talk about what features make each one unique so you

Best Online Accounting Software For Small Business Canada

Intuit QuickBooks Online

QuickBooks is one of the most comprehensive accounting software packages on the market, so it’s no surprise that it ranks #1 on our list. It has numerous features that make it an excellent choice for both small and large business operations.

Developed by Intuit, a leading Canadian software company specializing in financial software, QuickBooks Online is a cloud-based accounting system you can access through a mobile app or web browser.

Small business owners and accounting professionals commonly use this software because of its fluid and efficient accounting features. In addition, you can conveniently access all of its featured accounting tools in one central dashboard.

Quickbooks offers a 30-day free trial and three subscription options. They are as follows:

• EasyStart at $20 per month
• Essentials at $40 per month
• Plus, at $60 per month

Most of our clients use Quickbooks online Essential package.

Pros:

• QuickBooks is the most comprehensive accounting package available.
• It has a user-friendly interface that’s great for novice users.
• Allows you to track job expenses efficiently.
• Accept payments online (Visa, Mastercard, ApplePay, Discover)
• Best payroll features (Direct deposits, Automated tax filing, Employee portal)

Cons:

• The software is a bit pricey compared to other options on the market.
• The payroll addon is extra $20/mo +$3/employee/mo
• After subscription cancellation, you can access your records only for a year

Wave Accounting 

Wave is an invoicing and accounting software founded in 2009 in Toronto, Canada. They offer small businesses free accounting and invoicing services. Wave Accounting is one of the most affordable accounting software out there, and it comes with numerous features that make it a competitive option for small businesses. It offers a user-friendly interface and is simple to use with just a few simple clicks. 

It’s easy to set up, and even employees with no prior accounting experience can learn and manage it. Wave accounting helps you to charge your clients online and process Mastercard/Visa/American Express payments. However, they charge a small fee per transaction. In addition, growing companies with employees have to pay for the Payroll package, which is an extra addon.  

Pros:

• Wave Accounting is free software.
• Perfect for small businesses with no employees
• It’s easy to set up and use, which means less frustration if you’re new to an accounting software package. 
• It’s very user-friendly and has several helpful features like report templates, reminders, and invoicing options.

Cons:

• Payroll is a paid addon. 
• Credit card processing fees.
• No time tracking option 
• Lacks inventory management

Sage Business Cloud Accounting

If you’re looking for a solution that’s simple to set up and use, then Sage Business Cloud Accounting might be the right choice for you. The software comes with two options: desktop with cloud storage and online software. It makes it ideal for accounting professionals who regularly travel and do not always have internet access, and they can access their data without an internet connection. The software has a standard set of accounting features, such as invoicing, payroll, payments. Furthermore, it integrates with the Microsoft 365 platform, so if you are already using Microsoft 365, you may get extra benefits from choosing Sage 50cloud Accounting.

Because this accounting software has all the capabilities of QuickBooks Online, but for the half price, it might be worth checking out as well. 

Pros:

• A cloud-based system makes setup easy with no installation required.
• Sage Business Cloud Accounting is user-friendly and allows you to create invoices and invoice customers quickly.
• You get 24/7 support from Sage.
• College students who study business accounting learn Sage, so find an accountant with Sage Accounting experience would be easy.
• It is a more affordable option comparing to Quickbooks. 

Cons:

• It may be a little more complicated to use and less intuitive
• You may spend more time learning this software comparing with other options.

Xero

Suppose you’re looking for cloud-based software to aid you in managing your business accounts. In that case, Xero is the accounting software for you. Xero software revolutionizes the daunting process of accounting by designing a super simple and easy tool to use. 

Perfect for micro-businesses, the software has a straightforward interface making it easy to set up and navigate. Headquartered in New Zealand, Xero has become a favoured accounting software in the UK, US, Australia, and Canada.

Xero quickly gained ground by offering reliability, ease to use, and powerful features at a reasonable price. The company targets small business owners or companies that require critical accounting functions and doesn’t include many advanced features; for example, the payroll feature is minimal. As a result, Xero can be great if you need an accounting package that works well on its own without any extra bells and whistles.

Pros:

• Flexible pricing plans make this software accessible for businesses with smaller budgets.
• Xero has received numerous awards and an “A+” rating from the Better Business Bureau, so you can be sure that it’s reliable and safe to use.
• Its simple interface is handy for both novice and experienced users.
• Designed for users without an accounting background, so it is one of the most user-friendly software.

Cons:

• Xero isn’t the best package if you’re looking for a comprehensive accounting system. 

Freshbooks

Founded in Toronto, Canada, in 2003, Freshbooks has successfully become a vital accounting tool for service-based businesses. This Canadian accounting software offers a more customized invoicing feature compared with other accounting SaaS (software as a service). 

Although it mainly facilitates quick and easy invoicing, the software is also great for basic bookkeeping, billing, expense tracking, and time tracking. In addition, it has a user-friendly interface and is relatively affordable too. 

Freshbooks has three different plans you can choose from depending on the size of your business and its accounting needs.

Freshbooks’ unique feature is that you can customize your invoices to complement the look and feel of your branding, and it is one of the software’s best-selling points. In addition, Freshbooks integrates with a massive number of 3rd party software, such as Shopify and Stripe, so if you have a sizeable online presence, it makes sense to look into Freshbooks offerings.

However, it’s not the most comprehensive accounting package, so don’t expect to perform payroll or taxes directly from FreshBooks.

Pros:

• Easy to set up and affordable; 
• FreshBooks is very user-friendly.
• Best software for creating invoices

Cons:

• Accounting features are pretty limited.

Zoho Books

Zoho Books is an exceptional business accounting tool that appeals to small and growing businesses. After all, it’s a cloud-based tool dedicated to integrating online productivity apps.

Zoho’s primary advantage is its ecosystem, where many other Zoho applications can be integrated and managed from the same account. 

Besides accounting software, Zoho provides Mail, CRM, Marketing and other business tools. 

It features automated processes such as payment reminders, notifications for certain transactions and workflows, and report scheduling. 

Pros:

• Zoho Books is very affordable and easy to set up. 
• Other Zoho software has integration with Zoho Books.

Cons:

• Zoho is not a Canadian company, so it may need extra customization for Canada, for example, setting up correct taxes

best small business accounting software

•  Best Overall: QuickBooks Online
•  Best for Micro-Business Owners: Xero
•  Best for Service-Based Businesses: FreshBooks
•  Best for Part-Time Freelancers: QuickBooks Self-Employed
•  Best Free Software: Wave

BEST OVERALLQuickBooks Online

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QuickBooks Online is the best overall accounting software for small businesses of those reviewed. Not only do the majority of small business accounting professionals use QuickBooks Online, but there are also endless online training resources and forums to get support when needed. All accounting features can be conveniently accessed on one main dashboard, making bookkeeping more fluid and efficient.Pros

• Scalable
• Commonly used by accounting professionals
• Integration with third-party applications
• Cloud-based
• Mobile app

Cons

• Upgrade required for more users
• Occasional syncing problems with banks and credit cards

Intuit’s QuickBooks Online has been one of the most common accounting softwares used by small businesses and their bookkeeping and tax professionals. The software is cloud-based and can be accessed through a web browser or through the mobile app.

After the 30-day free trial, the four options for subscription plans include: Simple Start at $25 per month, Essentials at $50 per month, Plus at $80 per month, and Advanced at $180 per month. Typically there is a significant discount offered for the first few months, and some accountants are able to offer wholesale pricing to small businesses, as well. 

The monthly subscription for this software can be upgraded as a business grows, and there are many customization options with the mobile app that can be used to receive payments, review reports, capture an image of a receipt, and track business mileage. For businesses looking for a payroll solution, QuickBooks Payroll fully integrates with QuickBooks Online.

Each plan offers more advanced features like inventory management, time tracking, additional users, and budgeting. Most service-based small businesses will find that Simple Start meets all of their needs. For product-based small businesses, Essentials or Plus will have more options for inventory and customizations. The Advanced subscription is a new offering and provides robust financial reporting that is powered by Fathom. Fathom is an elite online financial report analysis tool used by many large companies all over the world.

All plans allow integration with third-party apps such as Stripe or PayPal. QuickBooks Online’s app store breaks down all of their apps by function and provides helpful examples of the benefits of each app.

BEST FOR MICRO-BUSINESS OWNERSXero

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Xero is the best in our review for micro-businesses that are looking for very simple accounting software. This software has a clean interface and also fully integrates with a third-party payroll service. Businesses can collect payment online from customers through Xero’s integration with Stripe and GoCardless.Pros

• Cloud-based
• Mobile app
• Payroll integration with Gusto
• Third-party app marketplace
• Simple inventory management

Cons

• Limited reporting
• Fees charged for ACH payments
• Limited customer service

Xero was founded in 2006 in New Zealand and now has over 3 million subscribers worldwide. This accounting software is popular in New Zealand, Australia, and the United Kingdom. Xero has over 4,000 employees and is growing rapidly in the U.S., as well.

Xero offers three monthly subscription options and a full-service payroll add-on: Early at $12 per month, Growing at $34 per month, and Established at $65 per month. The full-service payroll option is offered through Gusto and is an additional $39 per month, plus $6 per employee. The company offers a 30-day free trial. 

The Early plan limits usage and only allows entry for 20 invoices or quotes and five bills per month. This limited plan may be suitable for a micro-business with high-ticket transactions, but only a few per month, such as a consulting or small service provider. Both the Growing and Established plans offer unlimited invoices and bills. The only difference between the two is that the Established plan has additional features like multi-currency, expense management, and project costing. All three plans offer Hubdoc, a bill and receipt capture solution.

BEST FOR SERVICE-BASED BUSINESSESFreshBooks

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The most crucial accounting need for most service-based businesses is invoicing. FreshBooks offers more customizations for invoicing compared to other accounting software. Its primary function is to send, receive, print, and pay invoices, but it can also take care of a business’ basic bookkeeping needs as well. This accounting software makes it easier for service-based businesses to send proposals and , track time on projects, and receive payments.Pros

• Cloud-based
• User-friendly interface
• Third-party app integration
• Affordable
• Advanced invoicing features

Cons

• No payroll service
• Mobile app has limitations

Founded in 2003 in Toronto, FreshBooks started as just an invoicing software. Over time, more features have been added and FreshBooks now has over 500 employees. There are four different plans, and businesses can get a 10% discount if they choose to pay yearly, rather than monthly. Additionally, FreshBooks offers a 60% off discount per month for six months. The four plans are: Lite at $6 per month, Plus at $10 per month, Premium at $20 per month, and Select, which is a custom service with custom pricing.

The main difference between the four plans is the number of different clients that are allowed to be billed per month. In the Lite plan, up to five clients can be billed per month. In the Plus plan, up to 50 clients can be billed per month. In the Premium plan, unlimited clients can be billed per month. The Select plan also does not have a limitation on the number of clients that can be billed per month, but adds unique features. It costs an additional $10 per month for multiple team members to use the accounting software and it costs an additional $20 per month for the advanced payment feature, which allows users to charge a credit card in real-time or set up a recurring credit card charge for a client.

There are many third-party app integrations available, such as Shopify, Gusto, Stripe, G Suite, and more. A unique feature of FreshBooks is that invoices can be highly stylized and customized for a professional look and feel. FreshBooks is a great tool for budgeting out projects, sending estimates or proposals, and collecting customer payments.

BEST FOR PART-TIME FREELANCERSQuickBooks Self-Employed

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QuickBooks Self-Employed accounting software is our top choice for part-time freelancers and independent contractors who primarily want to track their income and expenses for their tax return. This software is designed for business owners who file a Schedule C on their individual tax return. 

Without keeping up with business activity using a software like this, freelancers would need to dig through all of their bank and credit card statements to add up their income and expenses at the end of each year, which can be quite daunting. QuickBooks Self-Employed will total up all business transactions automatically.Pros

• Cloud-based
• Mobile app
• Track mileage
• Differentiate between business and personal expenses
• Syncs with TurboTax

Cons

• Data cannot be easily transferred to other accounting software
• Limited reporting
• Limited invoicing functionality and customization

QuickBooks Self-Employed is an Intuit product with a cloud-based online interface and a mobile app. This software was created to help freelancers stay organized each year for tax season. Features of QuickBooks Self-Employed include tracking mileage, sorting expenses, organizing receipts, sending invoices, and estimating and filing taxes seamlessly through TurboTax.

Users can choose between three plan options: Self-Employed at $15 per month, Self-Employed Tax Bundle at $25 per month, and Self-Employed Live Tax Bundle at $35 per month. There is a 50% discount for the first three months. The two tax bundles include a TurboTax subscription for income tax filing. The Self-Employed Live Tax Bundle also gives you access to a CPA to answer questions throughout the year and during tax season. The CPA will also perform a final review of your tax return in TurboTax prior to filing. 

The mobile app makes it easy to track mileage while driving and capture photos of receipts for business expenses. Most accounting software is not designed to separate business transactions from personal transactions, but a special feature of QuickBooks Self-Employed provides an option to mark each transaction as business or personal. This is helpful for freelancers who don’t have a separate bank account for their business activity.

BEST FREE SOFTWAREWave

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Wave is an ideal accounting software platform for a service-based small business that sends simple invoices and doesn’t need to run payroll. For many freelancers or service-based businesses, Wave’s free features will cover all of their accounting needs and is the best free software in our review. At year-end, accountants can pull the necessary reports from Wave to prepare a business’ tax return.Pros

• Free accounting, invoicing, and receipt scanning
• No transaction or billing limits
• Run multiple businesses in one account
• Unlimited number of users
• Mobile app

Cons

• Limited third-party app integrations
• Higher fees for credit cards and ACH payments
• Full-service payroll is limited to only 14 states

Wave was founded in 2010 and is based in Toronto. The company has over 250 employees and was purchased by H&R Block in 2019. The foundational accounting features that most small businesses need, such as income and expense tracking, financial reporting, invoicing, and scanning receipts, are all included with this free software. These features can be accessed online or on the mobile app. Customer payment processing and payroll are considered premium services that cost extra, but all of the bookkeeping, invoicing, and reporting features are completely free.

Wave makes its money on its payment gateway. To process payment from a customer, Wave charges 2.9% plus 30¢ per transaction for Visa, Mastercard, and Discover, and 3.4% plus 30¢ per transaction for American Express. These fees are slightly higher than other accounting software. Additionally, to process an ACH payment, rather than a credit card, Wave charges 1% per transaction with a $1 minimum fee. This is unique to Wave, as the majority of accounting software does not charge a fee for ACH payment processing. 

Wave offers two payroll plans as an add-on service. The first plan is $20 per month plus $6 per employee or contractor. In this plan, Wave will process payroll and prepare payroll tax calculations, but the user is responsible for manually completing payroll tax forms and submitting tax payments. The second plan is $35 per month plus $6 per employee or contractor. In this plan, payroll is full-service, which means that all tax filings and payments are completely managed by Wave. This full-service payroll option is only available in 14 states.

Conclusion

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